When is Reality more important than your Political Ideology? With graphs.

I'm curious how you've digested our nation's credit rating drop. Do you think that doesn't matter either?

A follow up question: Is there any real world scenario that could occur that would give you pause as whether this theory was true or not?

 

For some inexplicable reason, Republicans support any policy that will inflict pain on the non-rich.

 

It doesn't matter at all

I'm never 100% sure about anything, but I am confident that there is no real world scenario that could surprise me because it's mathematically and operationally based and there is no other way it could work.

And keep in mind this is macroeconomics. I can't determine when the housing market is going to collapse or credit default swaps going to bankrupt giant financial companies. But I can show what that effect does to balance sheets and what the Fed does in response to prevent a depression.

 

The thing that amazes me as the wealthier get richer and richer they defend them more and more and they blame the non-rich for everything. Absolutely hilarious.

 

Of course there is a correlation between slow growth and low interest rates. That is the reason why we get low interest rates.

 

I thought you might say this and I think it the ultimate free market response to your conjectures.

As our credit rating slips, gold value increases. Ironically (actually not ironically at all), the higher the price of gold, the more likely we will be to go back to the gold standard. The more likely we are to go back to the gold standard the less likely the federal reserve will exist at all, and thus these conjectures. Write that down and use the paper you wrote it on to wipe the tears away when the federal reserves conjectures lead to its own demise.

 

We are never going back to the gold standard and gold prices mean absolutely nothing.

People have been saying this for decades. You guys are always wrong.

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And the funniest thing is the purpose of credit ratings is for a risk assessment. And as our credit rating dropped yields on our debt became the lowest in history. You are just a conservative, the reason why I made this OP. You guys will never drop your crazy ideology.

 

I figured you'd say that as well, anything that doesn't fit your theory doesn't seem to matter.

Right now there are already grumblings of going back to the gold standard, double the price of gold and it becomes a dull roar, double it again and it happens. It won't matter how much you argue about growth or velocity or inflation, it will happen. Your arguments basically expose the federal reserve for the house of cards that it is.

 

I'm just being realistic.

There's been grumblings for decades. You guys are wrong every single decade. We will never go back to a gold standard, just like no other country in the world has a gold standard. It's not even on the table for educated economists.

You are what this thread was meant for. An ideologue that simply can't let go.

 

When the tables shift, the same will be said of you.

 

I wish that were true. If it was, I'd be rich, and you'd be fertilizer. A perfect world.

 

Lol, I'm starting to smell some Ron Paul on you. Keep collecting that magical gold, hahaha!! Embarrassing.

 

How much gold do you have? Hmmm?

 

Absolutely none. Not a big fan of useless metals.

 

Something that sell for over $1000 an ounce isn't useless, Bub.

Just saying...

 

Picassos sell for much more than that. What purpose do they serve?

 

Ask the people that buy them. "Purpose" is subjective, you see. What purpose does your internet connection serve? It doesn't help you to look like this much of an idiot, does it? So why are you paying for it?!?

 

http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

$370,357,407,288.46

That is what we spent on just covering the interest of the national debt for 2013 and not including paying down any principle. Don't (*)(*)(*)(*) on me and tell me its raining and don't tell me that having high debt doesn't matter. That is $370 billion dollars just to pay for loans and what did we get in return for those huge loans.............not much so far. In fact taking that same $370 billion dollars and simply handing it out to people in the form of rebates would have done a hell of a lot more for the economy than bailing out GM and the banks. Taxpayers lost $26 billion on the GM deal and GM is still floundering compared to Ford and other automakers. Banks were spared any serious repercussions and now think that they can do pretty much whatever they want because Uncle Sam will always be their to bail them out if they are irresponsible with money again.

One of are best periods of growth was in the 90s under Clinton administration and during that period we ended up with a balanced budget. Debt does not create wealth, anyone that says that is a blithering idiot. The ONLY thing that creates wealth is growth, nothing else creates wealth. If you take on debt and grow faster than the debt then you are OK, the problem is that when your rate of growth is slower than your uptake of debt as it is currently now then you keep adding principle to your outstanding debt and you still have to pay the interest on those loans every month which is the same taking that money and giving it to financial insitutions and bond holders anyways. Why not just simply cut out the middle man of treasury bonds and international banks and just give the rebates to the people (and keep it all in the US economy instead of sending some of it abroad) and grow the economy that way? The way they are trying to grow the economy now isn't working and its just ass backwards.

http://www.usgovernmentrevenue.com/fed_revenue_2013US

Government revenue for 2013 was $2.71 trillion and for 2012 it was $2.45 trillion which means that revenue went up only $260 billion dollars at yet we spent $370 billion dollars in interest payments on the debt. That is a negative debt ratio, that is bad.......not good. We borrowed money to supposedly grow the economy but the interest that we paid on that loan is greater than the increase in revenue from the growth. It doesn't get any simpler than that.

 

Internet connection allows me to communicate, purchase items, and learn. What a horrible analogy. Much more useful than a useless lump of metal.

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Lol, embarrassing post.

 

http://www.usgovernmentrevenue.com/fed_revenue_2013US

Government revenue for 2013 was $2.71 trillion and for 2012 it was $2.45 trillion which means that revenue went up only $260 billion dollars at yet we spent $370 billion dollars in interest payments on the debt. That is a negative debt ratio, that is bad.......not good. We borrowed money to supposedly grow the economy but the interest that we paid on that loan is greater than the increase in revenue from the growth. It doesn't get any simpler than that.

Only embarrassing to you because apparently you don't understand the most basic concepts of economics. You try and hide behind a lot of terminology from textbooks and professors like I had but you don't even get the most basic theories correct.

If all you have is some stupid response without any actual factual basis there is no helping you. You are literally the Paul Krugman of this forum.

 

What's embarrassing is you don't even know the difference between net and gross interest payments or understand why that matters. This thread is meant for people like you. I appreciate you being a perfect case study!

 

"Wal-Mart Memo Suggests Ways to Cut Employee Benefit Costs " 2005

http://www.nytimes.com/2005/10/26/business/26walmart.ready.html?pagewanted=all

"Wal-Mart executives said the memo was part of an effort to rein in benefit costs, which to Wall Street's dismay have soared by 15 percent a year on average since 2002. Like much of corporate America, Wal-Mart has been squeezed by soaring health costs. The proposed plan, if approved, would save the company more than $1 billion a year by 2011."

"Ms. Chambers acknowledged that 46 percent of the children of Wal-Mart's 1.33 million United States employees were uninsured or on Medicaid."

an interesting Article, Walmart claims Healthcare raising by 15% a year back in 2005 under complete republican control...

 

The $370 billion in interest is paid directly to either foreign governments, banks or bond holders. Very little of that is returned in the form of taxes because foreign governments and banks are not paying their taxes to the US government and bond holders are often exempt from taxes. What is so hard to understand about that. If you are going to end up giving all that money to those people then it would be cheaper to just give them the the money right up front. Your way of massively increasing the debt IS NOT WORKING. We had a balanced budget at the end of the 90s and one of the best economies ever, we have spent trillions of dollars and are making the same exact mistakes they did during the New Deal. Even the architect of the New Deal Henry Morgenthaul Jr. said that it was a failure in 1939, and half the economists today agree with the principle author of the New Deal that it was a failure.

http://econlog.econlib.org/archives/2012/07/alan_blinder_ba.html

The amount of revenue that is collected from banks on taxes on returned interest is peanuts compared to what is paid out in interest.

 

Embarrassing!!

 

You keep saying that and yet I don't hear a specific response or repudiation. Post some links showing that what I am saying is wrong. Prove it.