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Kuato
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quote:
Originally posted by Daruma28:
quote:
Originally posted by Kuato:
"they own us now, Kuato"

Yes, they do. But we can re-build. If we have access to capital it is like re-building your business if it went up in flames.

Start up equitable practices and .... next time, it'll be whole new problems!

Kuato, you're arguing for access to "capital." But what BOG (Bernanke/Obama/Geinther) are offering as "stimulus" is access to MORE DEBT.

The bubble burst because we had too many people living a debt-consumption lifestyle, and the "stimulus" is nothing more than trying to re-inflate the bubble of borrowing and spending.

In other words, the "stimulus" is simply encouraging Americans to continue the exact same behavior that got us here in the first place.

No, Daruma

They are offering us access to debt instruments. Those who say "we are going into debt" confuse the ideas of debt and debt instruments, and I blame Sean Hannity and Glenn Beck and Rush Limbaugh for that.

By their reckoning Mitt Romney -were he liquid- would be deeply in debt, having $250 Million debt instruments.

Taxes on production pay it off. It's like saying, here I'll give you a hotdog stand but then, every time you sell one and make a delta you have to give me a few cents. It isn't bad, Daruma, it is good. Why? Because they only take it back as a portion of your PROFIT. Why isn't this risky? Because, no matter where that dollar goes, someone will have earned it even if the first receivers of it totally lost it, and earners will keep making it, and over and over. It is at its very core a repayment to the Treasury in a small portion of production, which is perfect.

[ April 17, 2009, 07:48 PM: Message edited by: Kuato ]

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edgmatt
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Kuato, you say you want the government to print a dollar for everything that is produced, for a lot of reasons, one of which you said to me was "do you want to get paid?". How do you address the issue when those products are destroyed or consumed?

To simplify, a dollar is printed when I sell a cake for a dollar, when the cake is eaten, the dollar still exists. How does any part of your theory address this?

Products are eaten, some are recycled, some are disintegrated, some are changed into new products worth more, some are changed into less valuable ones. How can the government possibly keep track of all this and destroy/print more money?

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Pyrtolin
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quote:
Originally posted by edgmatt:
Kuato, you say you want the government to print a dollar for everything that is produced, for a lot of reasons, one of which you said to me was "do you want to get paid?". How do you address the issue when those products are destroyed or consumed?

To simplify, a dollar is printed when I sell a cake for a dollar, when the cake is eaten, the dollar still exists. How does any part of your theory address this?

Products are eaten, some are recycled, some are disintegrated, some are changed into new products worth more, some are changed into less valuable ones. How can the government possibly keep track of all this and destroy/print more money?

Easily. We've been doing it for years already through measures like the GDP. Properly applied statistics can account for all of that easily on such a large scale.
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Kuato
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in addition to Pyr's explanation,

let me add that the GDP has traditionally avoided accounting for:

services
value added
intellectual property
black market products (drugs, prostitution, non-taxed services)

and what that means is that all the currency removed from the pool through any of those transactions, which, if you think it through account for why there was a dot.com BUST and many other debacles, are not replaced at all by the FOMC because Greenspan et al in their wisdom decided to pretend that such things do not exist.

Nevermind that you and I need the currency, it's about principles.

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Kuato
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quote:
Originally posted by edgmatt:
Kuato,
To simplify, a dollar is printed when I sell a cake for a dollar, when the cake is eaten, the dollar still exists. How does any part of your theory address this?


Here's another question.

Your cake digested and was gone. Since the advent of automation and mass production, most of the dollar you paid was sent to the wealthy-hoarders ( a small amount goes to taxes and to COGS) so.... how does your theory account for the disappearance of most of the dollar from circulation?

[ April 18, 2009, 09:53 AM: Message edited by: Kuato ]

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JoshuaD
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quote:
Your cake digested and was gone. Since the advent of automation and mass production, most of the dollar you paid was sent to the wealthy-hoarders ( a small amount goes to taxes and to COGS) so.... how does your theory account for the disappearance of most of the dollar from circulation?
Munga, you're suggesting that we inflate savings away. I know you like to pretend like this won't happen, but it will. If the government prints more money, there will be inflation. This is simple cause and effect. There will be more money out there, so the value of each individual dollar will go down. Unless you're suggesting that the simple process of turning on a printer and letting it run for a while will encourage pepole to work more, inflation is an unavoidable reality of your plan.

When you cause inflation to erode the savings of the "wealth-hoarders" you are participating in class warfare. Maybe you like this effect, most of us don't. What's worse is your process is a tumultuous one where some people get left behind as their wages don't rise in time to keep up with the inflation that will occur.

At the core of your position is a big "should". You don't think people should need to run up big debts to be able to buy what want. Well that's fine, but it has hardly anything to do with reality. We can talk about what people "should" do as much as we'd like, it's never going to change what they will do. They won't stop living beyond their means simply because you think they should. People could get by just fine without running up big debts. Turn off your cable TV. Stop buying $100 shoes. Stop going on $1000 trips to the Caribbean. Stop going on massive shopping sprees for clothes you'll only wear once. Get rid of all of these luxuries and you can still live better than practically any person has in the history of mankind.

The fact is Americans, even the poorest of us, live an extravagant lifestyle, and then balk at the cost of this excess. Most of us don't produce nearly enough to justify the lives we lead.

Your solution seems to be that if we print more money, everyone can live life like this. I'm sorry, it simply doesn't work that way. There are real costs associated with this lifestyle, and if you're not producing enough to support it, you're necessarily going to have to go into debt or curb your spending.

I live a life of extravagance at 22k a year. At the same time I am paying down the last of my school debt. Tell me, why do you want to inflate the value of my salary away when I know my company won't adjust it accordingly? You say your plan benefits the poor; well here I am, and I'm asking that you please leave my money alone.

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edgmatt
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quote:
Easily. We've been doing it for years already through measures like the GDP. Properly applied statistics can account for all of that easily on such a large scale.
The government keeps track of the value and amount of everything eaten, recycled, reused, decomposed, regrown or burned? Thats absurd. I just ate a cough drop, the government in Kuatos world printed 1.99 when I bought the cough drops, so now they are able to destroy 3 cents to balance it?

I have a compost heap in my backyard, is the government keeping track of how many banana peels and onion rinds Im throwing in there and compensating? And then when I use that compost to grow my own onions next year....how are they going to put a value on that? How much money should they print for those onions coming into existence?

My gripe is with the ridiculousness of Kuato's ( who ive been told is Munga? ) entire basis of reasoning on this subject. Its not only economically backwards to do what he suggests, its simply not possible.

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Kuato
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Joshua, as the govt prints more money, there will be more money. that is inflation in terms of money are you saying that if I have a dollar in my pocket, it will cause your dollar in your pocket to lose value? Answer- not unless you are trading currencies. the value is worth the same, ask anyone who posts prices at the grocery store, and those prices are held down by competition, and the products all need money or Mr. Grocer can't sell anything to me.

The injection doesn't mean a dollar means any less to anyone else. That is what you're failing to understand. Mitt's 250 Million will still be 250 Million because the value of each dollar can be constant- worth the same amount, and we have the production to pull it out.

Are you objecting to the idea that many people could no longer be groveling and lack the basics of life?

Hm. Well, that is true, and I think that's a great and wonderful side-effect of an equitable economy.

Are you concerned because you don't like people being able to buy things they want- like cable and shoes? Why not? Let me assure you that Mr. Shoemaker and Mr. Cable producer would really like you to value what they have done and be willing to consume it so they can feed their families and all the workers can be paid. They will try to make the best thing they can (competition) so that you choose THEIR products to consume.

Again, your 22k value life wouldn't be affected except that when you get moving and out of school, there will be someone to employ you because employers are making products that people can buy. Or better, you will be able to go out and start your own business because people will have money to buy from you. Then you will have money. You will be performing an honest job and making your own nest egg (see how important new injection is- even the average man plans to hoard if he can) and why would you want a system in which that is not possible, or in which the employers can pay you much less than you are worth (such as today - highly trained and valuable people working for less and less- though all the student loan payments stay the same) because there is no money, making the value of you as a worker very low?

Look guys, I am a capitalist.

Capitalism is defined as the release of capital for production (goods and services) that then compete in the free market. Failure to release the capital upon additional production makes a faux economy- one in which the goods and services must flow to the few owners of capital, or in other words, an economy in which producers are slaves to those with capital.


[ April 18, 2009, 03:24 PM: Message edited by: Kuato ]

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Kuato
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quote:
Originally posted by edgmatt:
quote:
Easily. We've been doing it for years already through measures like the GDP. Properly applied statistics can account for all of that easily on such a large scale.
The government keeps track of the value and amount of everything eaten, recycled, reused, decomposed, regrown or burned? Thats absurd. I just ate a cough drop, the government in Kuatos world printed 1.99 when I bought the cough drops, so now they are able to destroy 3 cents to balance it?

I have a compost heap in my backyard, is the government keeping track of how many banana peels and onion rinds Im throwing in there and compensating? And then when I use that compost to grow my own onions next year....how are they going to put a value on that? How much money should they print for those onions coming into existence?

My gripe is with the ridiculousness of Kuato's ( who ive been told is Munga? ) entire basis of reasoning on this subject. Its not only economically backwards to do what he suggests, its simply not possible.

Edg, you haven't been keeping up.

I know it is not possible for the govt to follow us around with a clipboard. Kindly read the post in which I addressed that. http://www.ornery.org/cgi-bin/ubbcgi/ultimatebb.cgi?ubb=get_topic;f=6;t=013034;p=3&r=nfx

[ April 18, 2009, 03:20 PM: Message edited by: Kuato ]

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Kuato
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quote:
Originally posted by Kuato:
Kid,

No, there isn't much money/ paper or otherwise/ out there.

That's what was divulged- there is only 5k in circulation - paper or otherwise- for each of 3,500 Million Americans.


sorry folks, off by factor of 10x. same dif, though.

[ April 18, 2009, 03:37 PM: Message edited by: Kuato ]

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Kuato
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Also, edg

On your cough drop example, you seem to think that just because you consumed the drops, you think that the currency that you paid to the producer should be destroyed.

Really?

Just because a producer makes a consumable you think they shouldn't be able to keep the proceeds?

Services "disappear" - hotel rooms need re-cleaning and clothes need re-washing... should those who perform those services be paid only once, and then, be expected to perform for nothing? Or, since the value "disappears" why not have the credit disappear from all their accounts, as quickly as the service?

Do you also think that, just because a producer makes a consumable rather than a durable good (believe me, durables don't really exist) that those producers should be forbidden to hoard (become wealthy) and should be forced to inject all the money back into circulation?

What is your theory on this?

[ April 18, 2009, 04:15 PM: Message edited by: Kuato ]

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edgmatt
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I dont think that at all, they way you've been talking, it MUST follow in your theory that IF the government MUST create money when something is bought or sold, then that same money must be destroyed if that same product is consumed or what have you.

quote:
Services "disappear" - hotel rooms need re-cleaning and clothes need re-washing... should those who perform those services be paid only once, and then, be expected to perform for nothing?
Not even close to the same page I'm talking about.

You seem to have a knack for changing subjects, with lots of words and weird descriptions about things completely irrelevant when you are asked to clarify a point you have made. Ill try again.

You claim that if the government printed money every time there was a transaction i.e. a cake being sold, this would balance the amount of currency with products, and that this is good. Lets assume I agree with that for the moment. So at one point there is equal amount of money per product. Lets use an extreme to illustrate. In all existence there is the government with the ability to print money, one cake which sold for 10$, and Me. The 10$ exists, I exist, and the government exists. I eat the cake. At that moment there is now an imbalance of money to product ( 10$ exists, a cake does not ). Can you not see how your theory breaks down at this point?

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Kuato
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and edg

your compost heap is only of interest to the federal reserve currency-monitors only if someone is going to be buying it for a lot of money, and you are capable of hoarding the currency you receive in exchange.

Remember, the question for the currency monitors: How much money is in circulation to represent our goods and services? This is why the indicator to inject currency is the indicator of product-price inflation: That phenomenon only occurs from lack of sufficient capital such that base-industries are factoring their long term investment grade credit rated contracts at banks (unless there is a material shortage, force majeure, or labor uprising, which is not the case here) or foreign manipulation/speculation/which is why we gotta get our energy off forward-priced and optioned BTU sources.

you peter'd out edg, and we were having a good chat, too....

[ April 18, 2009, 11:37 PM: Message edited by: Kuato ]

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Kuato
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quote:
Originally posted by edgmatt:


You claim that if the government printed money every time there was a transaction i.e. a cake being sold, this would balance the amount of currency with products, and that this is good. Lets assume I agree with that for the moment. So at one point there is equal amount of money per product. Lets use an extreme to illustrate. In all existence there is the government with the ability to print money, one cake which sold for 10$, and Me. The 10$ exists, I exist, and the government exists. I eat the cake. At that moment there is now an imbalance of money to product ( 10$ exists, a cake does not ). Can you not see how your theory breaks down at this point?

Well, again.....

I'm not sure you are understanding me. I do not use weird words, in fact I use the accepted vocabulary in my field which IS finance.

"Release the money" is a short-cut way to say "release sufficient currency for production" - and I've never said it is an endless injection- like leaves on trees.

The balance- the titration- is to measure production (all goods and services) against currency available (how much is left after hoarding and how much additional is needed considering that more people and more products and more goods are almost always needed/produced than yesterday simply due to more people needing and producing them).

Again, the indicator is product price inflation. This is the only mechanism of which I am aware that looks at availablity of currency at base-production (which is like looking at the most sturdy industries - energy, wheat, sugar....) and when buyers start paying them in IOUs (City of Houston gives Southern Company an IOU on energy sales rather than a money-wire) it is a "tell" that works.

Like a canary in the mine, when it drops dead there isn't enough of something.

Does the fed res ever know why? No, they never will and it doesn't not ****ing matter if they ever figure out that currency got taking in ________ because it is not the business of the fed res to really measure every good or service.

so is the injection endless? practically. but the point of the dollar is to hold its value steady, and the point of the fed res is to create dollars for our products for our economic development, and the point of capitalism is to release capital to represent our production so that it can compete in the free market.

You are probably not rich, ergo the question of the ten dollars comes to naught- because you couldn't hoard it. It is as though the transaction never happened. However, you have to get the economy fluid again, in balance, before that judgment is possible. It's like saying, "who is watching my ten-dollar canary?" when people are looking at the trillion-dollar canaries dead on the bottom of the mine. All the alarms are going off, but the reflexes to answer this problem are very very slow and many have been schooled-badly- I can whup many CPA's butts but it doesn't endear me to them and they are never glad to be corrected. How do you think the money-specialists feel today when somehow the primary safety which is "don't do anything without the cash on tap" has somehow and to their utter incredulity translated to "all the production got made anyway" (they were thinking, how could these producers be so irresponsible as to keep planting crops when there isn't any money for anyone to pay them for their bread and don't they know this is risky but what can the money-brains do but dismiss the dumb farmers because to them, everything's a seed???) (the production continued because Americans needed the goods/services and people needed to sell the so we operated upon the fumes of securities created to fill the void but which securities, like all instruments, faced a day of judgment as no IOU can really be paid with another IOU- eventually the credit/cash had to be found and it didn't even EXIST in circulation) with lack of liquidity crashing all the instruments at once?

Our economy has been very constipated for a long time and a lot of fluidity is needed before our base-manufacturers are able to be paid in cash/credit and not in IOUs (they haven't seen actual cash/credit in a VERY long time, they have been SLEEPING with the bankers to keep themselves afloat- notice how prices have increased? the banks usually don't GIVE that many loans upon base-production) and so.... when that happens and we are fluid that ten bucks won't "appear" on the screen until such time as it disappears from circulation (is hoarded sufficiently that the base-manufacturers cannot be paid in cash/credit) and injection is again required.

Your ten dollars and your cake only matter if the ten dollars if removed from circulation which is the straw that breaks some camel's back and instead of paying cash/credit to a base-producer there isn't sufficient liquidity and the payer must resort to IOUs, which the payee takes to the bank for factoring (forefaiting, blah blah)... and balance that against the fact that ALL base-industries are being paid in IOUs and the govt is helping them make payroll. Do you see what I mean about the size of the canary?

[ April 19, 2009, 12:21 AM: Message edited by: Kuato ]

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JoshuaD
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quote:
Originally posted by Kuato:
Joshua, as the govt prints more money, there will be more money. that is inflation in terms of money are you saying that if I have a dollar in my pocket, it will cause your dollar in your pocket to lose value? Answer- not unless you are trading currencies. the value is worth the same, ask anyone who posts prices at the grocery store, and those prices are held down by competition, and the products all need money or Mr. Grocer can't sell anything to me.

Money's value is subject to supply and demand just like any other commodity, from gold to sugar cane to computers. If you increase the supply of money without increasing the demand, the value of money will go down. If the value of money goes down, the dollar price of goods will necessarily go up. This is because the real cost of production of a good or service doesn't change simply because you print more money - it still requires the same manpower and the same resources.

Imagine for a minute in your scenario the grocer and you were bartering with each other. Instead of having money, you had sugar to trade for his groceries. You have been previously able to trade a pound of sugar for a pound of beans. Now a large company discovers an easy way to double the production of sugar for half the cost. Do you expect you'll still be able to trade a pound of sugar for a pound of beans for very long? Of course not. So why do you imagine money works any differently?

If you inflate the money supply by an "injection of liquidity" savings are now worth less than they previously were. Yes, in your example Mitt Romney still has his 3.5 million dollars, but that 3.5 million no longer possesses the buying power that it previously had. The amount of money will have stayed the same, but the value of the money will have gone down. Just like if the market is suddenly flooded with sugar, the value of anything traded goes down as it becomes more common.

It's important to realize that the only way to increase the demand of money is to increase the production of a country. This is a one way process; you cannot increase production by increasing supply, you can only increase demand by increasing production. Injecting liquidity will not drive people to work harder. Your plan will only cause instability in the market place.

A healthy economy is one that has a slow and steady rate of inflation. This will encourage people to invest their money back into the economy rather than to stuff it into their mattress and hoard it. This reinvestment keeps the money liquid while at the same time allowing a person to save the dividends of his hard work for a future date. This will also release liquidity that allows for the natural growth of a healthy economy. This is the most effective way to motivate people to work hard while at the same time keeping the money supply liquid.

For all the background you profess to have in finance, I'm starting to think you don't have a familiarity with basic economics. I urge you to read these three articles before continuing to debate this topic.

If you can't concede this point - that the value of money goes down as it's supply increases faster than it's demand - then we can't discuss this much further.

[ April 19, 2009, 12:50 AM: Message edited by: JoshuaD ]

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cherrypoptart
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Okay, let me ask it this way.

If there is some elderly couple who are doing okay, a million in the bank making 4.5% after taxes in interest, are they going to be able to live comfortably 5 years from now off of that interest?

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flydye45
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Not to put words into her mouth, but I would guess her answer to that might be that there has been years of pent up demand which hasn't been addressed.

However, this answer doesn't particularly satisfy. Our economy, save for the occasional 18 month hiccup (it's a FEATURE, folks), has been doing pretty well.

One could just as easily point to the payroll tax, fed tax, sales, tax, property tax creep as people vote themselves more stuff (or have them gifted it by a (D)etermined party who RUN ADS to get the programs used) and it's pernicious effects on their money supply.

Considering the thrift of the averagae American, it's a wonder that anyone would lend them something.

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kenmeer livermaile
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(Homer Simpson voice): "Mmm, compost, mmmm."

Well, my plants love it.

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Kuato
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quote:
Originally posted by cherrypoptart:
Okay, let me ask it this way.

If there is some elderly couple who are doing okay, a million in the bank making 4.5% after taxes in interest, are they going to be able to live comfortably 5 years from now off of that interest?

Of course. Better than ever.
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kenmeer livermaile
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Incidentally, inflation itself often increases motivation for entrepreneurs to produce.

[ April 19, 2009, 10:02 AM: Message edited by: kenmeer livermaile ]

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Kuato
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Joshua,

"the value of money goes down when there is more of it"

Yes-

It terms of the delta that can be realized upon rental of capital to others

(supply and demand operating upon scarcity of currency ---- credit cards going from 5 to 30% interest rates)

No-

In terms of what you can buy for a dollar (purchasing power), if there is more production to match the additional currency.

(and Americans have got billions on our shelves and trillions in services wishing to be given to each other)


______________________________________________

The value of the dollar can be "held still" by titration of the liquidity against production- "value" to be determined against average dollar value in....... how many? .....1000 products?

[ April 19, 2009, 10:15 AM: Message edited by: Kuato ]

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Kuato
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quote:
Originally posted by kenmeer livermaile:
Incidentally, inflation itself often increases motivation for entrepreneurs to produce.

ya mean I might go out and build/make/invent something and try to produce for the world, if I think there be money in them thar hills?
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0rnery
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Sorry to drag this back on topic, but I just saw a glimmer of hope from the administration:

Tax Relief For Small Business Will Be Part Of Obama's Plan

I attended a tiny, local Tax Tea Party on Wednesday, because the current direction of our government seems absurd. I thought it was common knowledge you simply don't raise taxes, especially the taxes of entrepreneurs and employers, during a recession. Even Christina Romer used to espouse that thinking.

Our local paper thought it was worthy of note. The rest of the media will not be able to ignore this groundswell for long. With any luck, and perhaps a lot more screaming, Obama will pursue more tax relief programs across the board.

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Kuato
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Ornery,

You are very correct- ya don't raise taxes during a recession. I do have some fun insight on that process, though.

I recently talked to a Senator's lead aide and she admitted that they were getting no work on any topic done this last three weeks because all programs had to turn in their budgets.

The reason they weren't able to turn in their budgets is because each program, due to the new legislation, called for more spending than the program took in. So, even though the legislation made a command of it, they were refusing to perform because they wanted their program budgets to be net neutral at the worst. I said, "but all that spending will increase the taxes and thus, pay for the additional injection over and over" and she said, "well, nobody gets that, so they are trying to recoup it all in state taxes. Arnold (CA) has in particular determined to instigate draconian taxes in order to pull the money right back out, such as is going in through the injection." I said, "He'll never accomplish it anyway, there is far more going out than EXISTS in the currency pool." She said, "He can try."

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Everard
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"The rest of the media will not be able to ignore this groundswell for long. With any luck, and perhaps a lot more screaming, Obama will pursue more tax relief programs across the board. "

"Sixty-two percent of Americans responding to a CNN/Opinion Research Corp. poll last month said they approved of how Obama is handling taxes."

Seems like a very large majority of american's aren't going to get involved with the "groundswell," so its unlikely Obama will decide that the upper 2% should pay even less taxes than they already are.

On the other hand, small business tax cuts, tax cuts for most americans, elimination of programs not doing their jobs, and tax benefits for people trying to get a better education, have been a part of Obama's tax plan since before the election.

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JoshuaD
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quote:
Originally posted by Kuato:
Joshua,

"the value of money goes down when there is more of it"

Yes-

It terms of the delta that can be realized upon rental of capital to others

(supply and demand operating upon scarcity of currency ---- credit cards going from 5 to 30% interest rates)

No-

In terms of what you can buy for a dollar (purchasing power), if there is more production to match the additional currency.

(and Americans have got billions on our shelves and trillions in services wishing to be given to each other)

Alright. Well I know this is what you believe. Everyone on this forum knows this is what you believe. Will you substantiate it in a single post for us all? Half of that post is incomprehensible.
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Kuato
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Josh,

Which point would you like me to address? I've gone over each item many times and put them altogether in many posts, separately in many posts, and I cannot think that I am using incomprehensible words in that post.

Please let me know which word needs definition and I'll be glad to provide it.

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JoshuaD
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Lol, alright. I give up. If you can misconstrue what I said as a request for word definitions while simultaneously ignoring the bulk of the refutations I provided, I have to conclude that you're not capable of discussing this topic rationally.

edit: If you go back and address some of the points I raised in my two long posts I will continue to discuss this with you, but I have yet to see you do so. I have no problem with the words you use, I simply require that you string them together in such a fashion that they both form coherent ideas and address the points that have been raised.

[ April 19, 2009, 12:52 PM: Message edited by: JoshuaD ]

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0rnery
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“How many more things can the people who make over $250,000 pay for?”

“The businesses that are most likely to be hit by this tax increase employ about a quarter of the U.S. work force,” said Bill Rys, tax counsel for the National Federation of Independent Business.

I'd rather see more private sector jobs created without the increased taxes, than wasting money on pork and public "jobs". I wasn't happy when Bush & company were on a spending binge. Still not convinced we needed his bailout or Obama's, but I do know taxes of any kind, at this point, make no sense.

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kenmeer livermaile
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Depends on what you're buying. If you're buying bridges that don't fall and similar traditional guv-funded projects, taxes make sense.
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flydye45
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If cash is scarce, as Kuato Munga contends, then it seems an excellect indicator of value to control production. One doesn't need to make enough cash to pay for every last hot dog. Instead, the manufacturer needs to use his profits to gauge if he's doing the right thing.

If people can't pay for every little thing, that isn't a problem. It's economics.

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Lobo
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I probably missed this, but why is Munga now Kuato?
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Pyrtolin
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quote:
Originally posted by 0rnery:
“How many more things can the people who make over $250,000 pay for?”

Then why don't they pay for them and take the deductions?

If they're sitting on the cash rather than putting it into business expenses, then they're not actually buying stuff with it to begin with.

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Pyrtolin
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quote:
Originally posted by JoshuaD:
If you can't concede this point - that the value of money goes down as it's supply increases faster than it's demand - then we can't discuss this much further.

That point is accepted and not what's being asserted. The claim on the table is that right now the demand for money far, far exceeds what's available (especially with the huge amount that has been destroyed by falling markets in the past year) O

The claim is that our production capacity right now is high enough that demand is highly elastic. We'd have to reverse all the layoffs of the past year and then some before we came near to pushing up against the limits on our ability to produce. And before that we've got huge inventories gathering dust because of the degree of overproduction that we've been funding for the past decade.

The demand for cash exists in spades. We have the production capacity to meat the rise in consumer demand it would cause. Those are the core points that Kuato is making.

Don't forget that an increasing number of products that we're making (IP stuff- software and other media) have trivial production costs. Right now those markets are rife with piracy and lots income potential because of how much the demand exceeds the ability of people to pay for the products.

We simply don't meed the conditions required for cash injection to cause hyperinflation. To the contrary, now that credit is sparse, we're actively fighting deflation caused by a lack of access to capital.

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Pyrtolin
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quote:
Originally posted by Lobo:
I probably missed this, but why is <...> now Kuato?

Trying to keep her searchable life a bit more separate from her passtimes. It probably would help to avoid putting linking the names together as much, even if there's not much of a barn of horse left to make trying to close the door a meaningful consideration.
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kenmeer livermaile
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"Will you substantiate it in a single post for us all? Half of that post is incomprehensible. "

Aye, more and more shades of grey: "incomprehensible". Not meaning that Dey nor munga communicate incomprehensibly, but that persons who really wish to comprehend ask specifics, such as:

What does this word mean? What do you mean by this phrase? et cetera.

Otherwise it is a) making Sisyphus climb up the hill all over when a few chocks under the rock would suffice, and b) often a poorly disguised contemptuous dismissal.

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kenmeer livermaile
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Wow. What a brain fart. "Shades of grey" should be Shades of Dey.
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JoshuaD
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quote:
Pyrtolin: That point is accepted and not what's being asserted. The claim on the table is that right now the demand for money far, far exceeds what's available (especially with the huge amount that has been destroyed by falling markets in the past year)
Well, yes and no. The amount of value lost in the stock market isn't equal to the amount of purchasing power taken out of circulation.

quote:
The claim is that our production capacity right now is high enough that demand is highly elastic. We'd have to reverse all the layoffs of the past year and then some before we came near to pushing up against the limits on our ability to produce. And before that we've got huge inventories gathering dust because of the degree of overproduction that we've been funding for the past decade.
I'm sorry, could you provide proof of these "huge inventories"? This simply isn't analogous to my understanding of the state of the market. For the most part we're a country of service, and you can't inventory service.

I don't doubt there are warehouses out there that have massive inventory, I just don't think that "massive inventories" is even a blip on the radar screen of our problems.

quote:
The demand for cash exists in spades. We have the production capacity to meat the rise in consumer demand it would cause. Those are the core points that Kuato is making.
It doesn't cause an immediate rise in consumer demand. The money is being given to the banks, not to the consumer. Our money is being devalued in the long term, and we haven't gotten anything in return. It's as if the banks reached into our pockets and stole a piece of our money.

quote:
Don't forget that an increasing number of products that we're making (IP stuff- software and other media) have trivial production costs. Right now those markets are rife with piracy and lots income potential because of how much the demand exceeds the ability of people to pay for the products.
These markets are rife with piracy because the business model of these companies failed. They were selling us a product at a huge markup because they had a virtual monopoly over it. The advent of the computer took away that monopoly and now they're scrambling to keep it. They won't be able to. To suggest that this has anything to do with liquidity is just silly. People have the money to buy CDs, but they decide they'd rather save their hour worth of work and download instead.

quote:
We simply don't meed the conditions required for cash injection to cause hyperinflation. To the contrary, now that credit is sparse, we're actively fighting deflation caused by a lack of access to capital.
Credit won't stay sparse. People will continue to live beyond their means, and investors will continue to look for that 7% interest rate. The long term repercussion of what Obama has done (and plans to do) is inflation. When the stimulus money has been in the system for a while and then the credit markets open back up, we're going to have a money supply that's much larger than it was previously, and I don't see how production will increase with it. This is inflation. This stimulus, this "injection of liquidity", will make things better in the short run, but much much worse in the long run.
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Kuato
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Services:

The fact that services are not visible in inventory doesn't mean that capital shouldn't be matched to them.

If I am a dentist, a chiropractor, a school aide, a physical therapist, a drama coach or a loan packager, all these offered services by all parties should be accounted as sitting inventory awaiting purchase.

Guess, of all the above, the only one that is accounted?

You got it- loan packaging.

The Fed Res realizes that financial services are some of the biggest suctions-of-capital because lack of liquidity = lots of loans (and thus, interest revenue) because there isn't capital. If the banks failed to get Financial Fees and Services "into" the plan of fed capitalization, then, they cut off their own noses. The whole point of a low-capital "capitalist" society is to suction away the assets to the wealthy. Greenspan was on board that plan.

My platform is that all services should enjoy recognition (no "we can't see it so let's not let people get paid for it" paleo-thinking) and release of sufficient capital according to the ability of the practitioners to remove the capital from circulation, after the point of injection to balance production. Bernanke is on board that plan.

Let everyone be able to be paid for services, from yoga instructor to sex trades.

[ April 21, 2009, 03:51 PM: Message edited by: Kuato ]

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Pyrtolin
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quote:
Originally posted by JoshuaD:
I'm sorry, could you provide proof of these "huge inventories"? This simply isn't analogous to my understanding of the state of the market. For the most part we're a country of service, and you can't inventory service.

Can you point to any major manufacturing outfit in the US that is, if not hiring, at least not laying off workers? Any sector that's not cutting production because of how overstocked it currently is relative to demand?


quote:
It doesn't cause an immediate rise in consumer demand. The money is being given to the banks, not to the consumer. Our money is being devalued in the long term, and we haven't gotten anything in return. It's as if the banks reached into our pockets and stole a piece of our money.

Yes, now you're on the same page. It's stupid to hand it out at the top, because money only does good as it rises to the top. It's like adding water to a river downstream of a turbine and wondering why you're not getting more power.

You need to put money in at the bottom of the system to maximize the number of times it changes hands before stagnating at the top rather than pouring it into the top and hoping a little bit slops out

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