- 02 Nov 2019 03:01
#15046014
The current wildfires in Calif. demonstrate again that for the last 40 or so years America {and the other Western nations & Japan} have been misgoverned.
Many of you here blame the Baby Boomers for this. Well, I have news for you. For the 1st decade at least the 2 previous generations outnumbered the Baby Boomers at the polls. So, it wasn't just the Baby Boomers, or even mostly the Baby Boomers.
In fact, the problem wasn't the mass of the people. The problem is the current theory of economics that most everyone believes. And, this includes almost everyone here on this site. Economists attempt to prove their theories deductively because they can't do controlled experiments. The problem with *all* deductive proofs is hiding in the assumptions used. If even one of them is false the proof is useless. And, economists use obviously false assumptions and then make a claim that that the conclusions are good enough to make policy recommendations to politicians. Then, they ignore the evidence that after the policy was put in place the results were not at all what was predicted. This last thing is strong evidence that the Theory being used is not at all “good enough”.
The current economic theory being used by politicians has many flaws. I want to start with 2 of them.
1] It says the the US Gov. {and all like gov. which does not incl. those in the eurozone} is like a mom & pop corner store. That it must get dollars before it can spend dollars. It says that taxes fund the Gov. it says that running a surplus {the same as having a profit for the store} is a good thing.***
2] It says that that the US national debt must be paid back some day. It says the only way to do this is to collect more from taxes than the Gov. spends, “you can't borrow your way out of debt”. Therefore, we can't let the national debt grow too large.****
Based on your postings here on this site, you-all mostly agree with both of those claims. If those clims are false then you are just as much to blame for the misgovernment of America as the Baby Boomers you hate, because the problem is that most people have been brainwashed into believing those claims.
. . . This is so, because those claims have starved the American economy of sufficient income for 40 years. This is so, because *all* deficit spending automatically becomes someone's income and when he spends it someone else's income, etc., etc. Income gets spent or saved. If it is spent it adds the the GDP. If it is saved it is a drag on future increases in the GDP. This is why the US Gov. must deficit spend every year to replace what people save {and other leakages} or else the GDP suffers. If the GDP suffers then tax receipts decline.
The current wildfires in Calif. illustrate the $4T in deferred infrastructure improvements or repairs that the US as a whole has not made over the last 40years. This was caused by the prevailing economic theory making the voters resist taxes and deficit spending. This has not only been a problem for the infrastructure but it has also denied the people of additional income to make their lives better.
. . . The current economic theory has 2 other faults. It says the anti-trust laws are too limiting on big business and if they are reaxed then everyone will benefit. This has not turned out to be true.
. . . The 2nd one is that policies have been put in place for labor law that have resulted in real after inflation wages being flat since 1975. And, inflation has not been compute d correctly either. For most people it has been higher than the Gov. office has claimed. So, most people who live on wages have been squeezed between the actual inflation and their flat wages.
All this was not necessary. TINA is a lie. There Is an Alternative. It has not been used because the media has brainwashed the population with a false economic theory. If you still believe this theory, despite my and other's efforts, then you are as much to blame for the current mess America is in as everyone else.
.** . I can make a long list of examples where the predicted result didn't occur.
1] Trump's recent tax cuts were supposed to result in 6% GDP growth, which didn't come close to happening.
2] All the Repud tax cuts for the last 35 years fall in this category.
3] The austerity in Europe was supposed to being back prosperity, it hasn't. The EU is in a long term recession.
4] Japan has deficit spent for 25 to 30 years and its current national debt stands at 236% of GDP, the highest ratio in the world. The theory predicted that this would lead to high inflation, to high interest rates when gov. borrowing crowed out private borrowing, and soon lead the Japanese gov. to be insolvent. NONE of these results have occurred over the 25+ years of their deficit spending, and the Banj of Japan actually buys most of the bonds sold so it is the same as simply spending the cash into the economy. The theory says that this is going to result in hyperinflation very soon, but inflation is almost 0%.
5] From 2000 through 2006 Mainstream economists were saying that the policies that they had recommended and had gotten put in place had ended the business cycle and there would not be another crash. That if there was a problem it was with the “huge” US national debt. Then came the GFC/2008 and proved that the theory was false. The crash was not caused by th national debt, it was caused by private debt getting so high that too many of the borrowers could not make the next payment.
.*** . The US Gov. is not like a small store because the Gov. can and often does create more dollars whenever it needs them. In 2008 & 2009 the Gov. and/or Fed. Res. created {according to a reply to a FOIA request} $27T {yes $27T} dollars and lent or gave them to US banks, foreign banks, and other people. I have no knowledge of how much of that has been paid back. I assume it is over half and maybe close to 90%, but I know it isn;t 100%. See below for another huge difference.
.**** . The US national debt is not going to be paid off, ever. It can't be paid off. It doen't need to be paid off. The US can roll the bonds over or pay them with magic dollars as they come due because it can create dollars whenever it needs them. Doing this IS FAR LESS DAMAGING to the world's economy than not paying them when they come due.
. . . What the so called national debt IS REALLY is all the dollars of deficit spending that the US Gov. has spent and not taxed back yet. It is currently {look at it from the POV of the holder, now} the assets of the holder's. Using the taxing power to take these assets of the holder's away directly or indirectly is going to have the same macroeconomic effect as defaulting on the debt.
. . . Note, here I'm referring to the damage it would cause to the American and the world's economy, not the effects on each bond holder. The damage would occur because of macroeconomic forces or effects. Sucking $21T {an estimate of the current natl' debt} out of the world's economy in one day or over 50 years would destroy the world's economy, any way it is done.
Another data point I will point out is ---
I have posted a blob post by Prof. Bill Mitchell that Presidents of several Central Banks {BOJ, ECB, RBA, NZ res. bank, BOE, etc.} have said repeatedly that in a next economic downturn the gov. of their nations need to use fiscal stimului because monetary stimulus will be ineffective because interest rates are already near 0%.
. . . What this data point says is that monetary control of the economies has not actually worked that well and certainly will not work when interest rates are already at 0%.
Many of you here blame the Baby Boomers for this. Well, I have news for you. For the 1st decade at least the 2 previous generations outnumbered the Baby Boomers at the polls. So, it wasn't just the Baby Boomers, or even mostly the Baby Boomers.
In fact, the problem wasn't the mass of the people. The problem is the current theory of economics that most everyone believes. And, this includes almost everyone here on this site. Economists attempt to prove their theories deductively because they can't do controlled experiments. The problem with *all* deductive proofs is hiding in the assumptions used. If even one of them is false the proof is useless. And, economists use obviously false assumptions and then make a claim that that the conclusions are good enough to make policy recommendations to politicians. Then, they ignore the evidence that after the policy was put in place the results were not at all what was predicted. This last thing is strong evidence that the Theory being used is not at all “good enough”.
The current economic theory being used by politicians has many flaws. I want to start with 2 of them.
1] It says the the US Gov. {and all like gov. which does not incl. those in the eurozone} is like a mom & pop corner store. That it must get dollars before it can spend dollars. It says that taxes fund the Gov. it says that running a surplus {the same as having a profit for the store} is a good thing.***
2] It says that that the US national debt must be paid back some day. It says the only way to do this is to collect more from taxes than the Gov. spends, “you can't borrow your way out of debt”. Therefore, we can't let the national debt grow too large.****
Based on your postings here on this site, you-all mostly agree with both of those claims. If those clims are false then you are just as much to blame for the misgovernment of America as the Baby Boomers you hate, because the problem is that most people have been brainwashed into believing those claims.
. . . This is so, because those claims have starved the American economy of sufficient income for 40 years. This is so, because *all* deficit spending automatically becomes someone's income and when he spends it someone else's income, etc., etc. Income gets spent or saved. If it is spent it adds the the GDP. If it is saved it is a drag on future increases in the GDP. This is why the US Gov. must deficit spend every year to replace what people save {and other leakages} or else the GDP suffers. If the GDP suffers then tax receipts decline.
The current wildfires in Calif. illustrate the $4T in deferred infrastructure improvements or repairs that the US as a whole has not made over the last 40years. This was caused by the prevailing economic theory making the voters resist taxes and deficit spending. This has not only been a problem for the infrastructure but it has also denied the people of additional income to make their lives better.
. . . The current economic theory has 2 other faults. It says the anti-trust laws are too limiting on big business and if they are reaxed then everyone will benefit. This has not turned out to be true.
. . . The 2nd one is that policies have been put in place for labor law that have resulted in real after inflation wages being flat since 1975. And, inflation has not been compute d correctly either. For most people it has been higher than the Gov. office has claimed. So, most people who live on wages have been squeezed between the actual inflation and their flat wages.
All this was not necessary. TINA is a lie. There Is an Alternative. It has not been used because the media has brainwashed the population with a false economic theory. If you still believe this theory, despite my and other's efforts, then you are as much to blame for the current mess America is in as everyone else.
.** . I can make a long list of examples where the predicted result didn't occur.
1] Trump's recent tax cuts were supposed to result in 6% GDP growth, which didn't come close to happening.
2] All the Repud tax cuts for the last 35 years fall in this category.
3] The austerity in Europe was supposed to being back prosperity, it hasn't. The EU is in a long term recession.
4] Japan has deficit spent for 25 to 30 years and its current national debt stands at 236% of GDP, the highest ratio in the world. The theory predicted that this would lead to high inflation, to high interest rates when gov. borrowing crowed out private borrowing, and soon lead the Japanese gov. to be insolvent. NONE of these results have occurred over the 25+ years of their deficit spending, and the Banj of Japan actually buys most of the bonds sold so it is the same as simply spending the cash into the economy. The theory says that this is going to result in hyperinflation very soon, but inflation is almost 0%.
5] From 2000 through 2006 Mainstream economists were saying that the policies that they had recommended and had gotten put in place had ended the business cycle and there would not be another crash. That if there was a problem it was with the “huge” US national debt. Then came the GFC/2008 and proved that the theory was false. The crash was not caused by th national debt, it was caused by private debt getting so high that too many of the borrowers could not make the next payment.
.*** . The US Gov. is not like a small store because the Gov. can and often does create more dollars whenever it needs them. In 2008 & 2009 the Gov. and/or Fed. Res. created {according to a reply to a FOIA request} $27T {yes $27T} dollars and lent or gave them to US banks, foreign banks, and other people. I have no knowledge of how much of that has been paid back. I assume it is over half and maybe close to 90%, but I know it isn;t 100%. See below for another huge difference.
.**** . The US national debt is not going to be paid off, ever. It can't be paid off. It doen't need to be paid off. The US can roll the bonds over or pay them with magic dollars as they come due because it can create dollars whenever it needs them. Doing this IS FAR LESS DAMAGING to the world's economy than not paying them when they come due.
. . . What the so called national debt IS REALLY is all the dollars of deficit spending that the US Gov. has spent and not taxed back yet. It is currently {look at it from the POV of the holder, now} the assets of the holder's. Using the taxing power to take these assets of the holder's away directly or indirectly is going to have the same macroeconomic effect as defaulting on the debt.
. . . Note, here I'm referring to the damage it would cause to the American and the world's economy, not the effects on each bond holder. The damage would occur because of macroeconomic forces or effects. Sucking $21T {an estimate of the current natl' debt} out of the world's economy in one day or over 50 years would destroy the world's economy, any way it is done.
Another data point I will point out is ---
I have posted a blob post by Prof. Bill Mitchell that Presidents of several Central Banks {BOJ, ECB, RBA, NZ res. bank, BOE, etc.} have said repeatedly that in a next economic downturn the gov. of their nations need to use fiscal stimului because monetary stimulus will be ineffective because interest rates are already near 0%.
. . . What this data point says is that monetary control of the economies has not actually worked that well and certainly will not work when interest rates are already at 0%.
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