Simple Example of Why Government Spending does not cause Crazy Inflation!!

The Government isn't a person. It is a representative of the nation as a whole. We elect people to make decisions on how to pay for our expenses as a nation. None of that is theft... it is actually theft to take what the nation has provided you and not pay for it. You are truly the thief, or at least wannabe thief, in this equation.

Or we could just let the economy fail to prove a point. That sounds logical!

Nope, it is clear you lack a logical thought process. You are driven by your pure hatred of the Government, not by math, science, or reason.

I mean we need more people with taxable income. I don't get what your point is. I'm saying instead of giving more back to the people with money, we need to get more people with money to give back.

Lol, so you are applying what you see on the street to macroeconomics? Unbelievable!!

So would I

Economists aren't mind readers, they apply data to their decisions. To say that because the housing collapse happened, that economic theory is false, is just your ignorance coming out in full force.

Because you aren't providing data or facts to back up your claim. You leave me no room but to attack the messenger since you offer nothing but your own subjective opinions about how much you hate the Government.

 

Some folks did.

http://www.businessweek.com/magazine/content/03_27/b3840057.htm

http://www.humanevents.com/article.php?id=28973

http://www.city-journal.org/html/10_1_the_trillion_dollar.html

 

So a group of thugs who band together and give themselves a name shouldn't be considered thieves if they're in power? Funny how I'm the bad guy trying to resist them from taking money I rightfully don't agree with nor do they have the Authority to spend the money on the projects they're working on.

You didn't even try to denounce what I've said other than say "You fail because I said so!" when my clear explanation proves you're giving power straight back to those who failed.

Good one I guess thousands of years of Central Economic planning worked quite well! Oh wait... I forgot it created Oligarchies that enslaved the masses and then used their soldiers (their non-individual force) to tax collect forcefully or be punished.

Why does someone who failed deserve more money? Why does someone who doesn't work deserve more money? Why doesn't the person who works deserve more of their money? You're putting money in the hands of people who didn't earn it.

You're comparing OPEC raising gas prices because of Supply and Demand... The Supply has stayed the same but, the Demand has dropped because of the lack of Wealth. Shouldn't the Gas Prices drop or is it a clear sign that the Value of the US Dollar is the one crashing which is the reason people have less wealth?

You're giving money back to the banks and pumping money back into the Economy like it's free. You support the people who made bad decisions to remain in power.

Funny considering the Economy has been Predicted quite well so far by the Austrian School of thought and the Keynesian Philosophy keeps trying the exact same pathetic strategy every time that diverts more wealth from the Workers to that of Corporations.

Unless of course you consider that success who will ever know!?

You offer nothing to begin with.

 

The 2nd one doesn't count considering 2006 was the height of the Bubble burst... do you mind quoting the other two specifically as to where they point out their warnings? If you do I stand corrected.

 

This isn't the United States of Roelath. The Government has legal authority to tax to provide necessary goods and services for the nation as a whole. If you aren't willing to pay for that, than do not participate in commerce that involves USD. You would think "patriots" would want to give back to their country. Who would of figured they were a bunch of selfish American haters.

You haven't said anything of substance. I don't even know what your theory outside of "Govt bad" is.

We don't have a centrally planned economy.

Once again you are taking the selfish self worth approach. I don't care about that. I care about the economy.

OPEC does there own thing. If they want to drop the supply, they can if they want. This has nothing to do with price inflation of the USD.

Money is fuel. You take money out of the system, the economy doesn't work. I don't like the bankers that made the decisions, but I don't advocate bailing them out, I advocate bailing the banking system out. There is only two ways we as citizens can get more money in this country to produce and consume more goods and that is through banks or through the govt. So if you want to completely take out 1 source of money, then we would completely rely on the Govt.

But since they rely on the banks, it would be one of those, oh crap we're screwed situations. You are in the mindset of a simpleton that just thinks the country is run by hard workers with shovels and hammers. Unfortunately, the glue to our economy is in the banking system. It is your choice to want the largest economy possible, or the survival of the fittest approach that leaves couple winners and tons of slaves.

Lol, the Austrians have been calling for hyperinflation and the destruction of the dollar for over 20 years now. They predicted the housing bubble and they understand the difference between paper wealth, and real wealth. Wow, big whoop. They'll be crying for hyperinflation for the next 2 decades. And then the next 2. They are nothing to admire when it comes to macroeconomic knowledge. They don't even use math in their analysis.

I offer reality. I talk about what the country has done and does do. I don't preach some weird theory that has never been tried and that has no mathematical backing. You guys are the ones that are trying to tell economists and tell the experts running the country that they don't know what they're doing. Like Gov Perry telling Bernanke that not to "print" any more money. I guarantee you Gov Perry has absolutely no clue what he is talking about when it comes to Fed policy. Just like you have no clue what you're talking about. Just a bunch of faith based morons.

 

Give back Voluntarily like they did in the past? Sure. But forced Income Tax? No.

Cronyism, Corporatism and Imperialism is bad.. I never said anything otherwise.

Oh my bad I forgot it was simply Corporatism/Cronyism renamed to Keynesian Economic Policy. It's the Corporations/Government that pull the strings on the Printing Press so I guess you're half right unless you consider the Government nothing but, an arm of the Corporations.

The only way to fix the Economy in your playbook is giving it to Corporations/Failures... you'd much rather have the Olympic 1st Place Champion share their trophy/medal to those who didn't make it.

Go look in your own profile and see the Gold-US exchange... pretty dramatic. You don't see debasing the currency as a bad thing because it keeps the Party going until everyone wakes up from hangover to start boozing again to stop the pain.

Wealth is value and that is determined by the Marketplace not by your skewed view of Dollars being everything. The glue to Industry is the entrepreneurs, resources, wealth and the workers.

Yes, ever since the Dollar was no longer pegged to the Gold Standard it allowed the Federal Government to make Paper Money with no real backing out of thin air. There is good reason to scream Hyperinflation when every country that has followed such a practice has fallen from it.

http://en.wikipedia.org/wiki/Hyperinflation

Look at the countries listed and tell me it's nothing but a myth as if somehow new systems in place can prevent it.

The entire World pre-FIAT money and currently Malaysia (Thanks to Miss Jonelyn).

The same Economics who are nothing but Corporate dogs and didn't see the train coming when it hit them? Quite laughable to believe them.

 

Lol, arguing against income taxes is moot point. Every dollar "That the Government provides" has value attached to Government spending involved. If the Govt gives a teacher $1000 and that teacher buys a product from you for $1000, do you not believe you should pay some of that money back? I mean it is coming directly from the Government. There are 22 million public employees running around this economy giving trillions of dollars away to the private sector. You don't think we owe any of that back?

Third world country's are bad too

You mean the same policies we have used for the past 70 years? Yea, you don't apply any reason or logic to your thought process do you. You just hate the Government and could care less about the ramifications it has on the Government. The funny thing is you think your money would still be there or be worth the same with out Government involvement.

I understand math is hard!

It's your call, if you want the economy to collapse to prove a point, then so be it.

Oh the irony. Constantly complaining about inflation than bragging about gold's value in USD. Now that is funny!

Lol, money is the fuel for the marketplace. We can't do much with out money. It is like the oil in your car. Wealth is created by transactions of individuals. For those transactions to take place in our economy people need money. For our economy to grow, people need money. It is very simple

But we aren't facing hyperinflation, we have done nothing but grown in to the largest economy in the history of mankind. I guess that debunks your theory about fiat money causing hyperinflation.

What?

Which I've proven is false

Education is a powerful drug. I suggest you get some.


Your position comes from that of a selfish person that believes more about individual self worth and the ability for individuals to hoard their "gains", rather than taking a look at the economy through the eyes of the country. If you believe in survival of the fittest economy go move to Nigeria or something. There you can hoard all you want as long as you don't get killed. If you want to live in a civilized society than move to a developed country.

Your theory is completely based on faith and belief rather than in science, math, or economics.

 

No problem.

What have you prove false exactly? In Malaysia you can trade gold and buy it from their state governments and banks.

 

Did the $1000 come from the toothfairy?

Because they follow the same ideology of our current Economic system? I agree.

The Government wouldn't be able to pursue UnConstitutional/Unsustainable Wars? The Government wouldn't be able to give Foreign Aid to Dictators or other countries? I think it's good so far that the Government recieved a shot to the stomach for their arrogance with other peoples money.

Appeal to Fear Fallacy... you support Cronyism/Corporatism.

It's the Marketplaces value of Gold to US Dollars pal. People would rather have Gold than some paper money that is being printed and is backed by a Government that is spending near $3,000,000 a minute.

Wealth is what you determine to be wealth... A man who is thirsty doesn't consider US Dollars to be of higher value compared to Water. A man who wishes to secure their assets will choose hard assets instead of US Dollars because managers of the Dollar recklessly spend and print the currency.

US Dollar was pegged to Gold up until the 70s... good try buddy. Also considering the entire World was still under Central Economic Planning for the Max, In ashes, in Civil Wars and/or in debt beyond any possibilily of expanding it's a given USA took the torch as the Worlds leader in the Economic sense because it still held some Free Market Capitialistic Approaches. Funny ever since the decades beyond that point the USA has been shrinking ever since...

Click Link.
Read Hyperinflation Stories concerning all of the countries listed.
Come back to me.

People weren't trading with Gold or Silver? They were trading with US Dollars back than too? Clearly Economic Law for the past 6,000 years blatantly calls you a retard.

You're a little worm aren't you? Telling everyone to go Educate themselves as if you're the Golden Child.

Ah... Selfish people! Appeal to Emotions! Have to sacrifice their wealth for the country... A country with reckless policies and has a spending craze.

Your entire Economic Belief is based around Water not being wet and Fire not being hot. You don't need a Masters in Economics to understand when someone is being a moron... you just need Common Sense to see it.

 

Maybe you're just not as intelligent as you think you are, a common problem among the left.

 

Well said, imo.

 

No, but it came from the Government

No they don't.

Yes, in your Utopian society, we would all just be civil and the common man would run the show. Puhlease, there has to be some hierarchy.

Lol, I support utility, innovation, education, and strong economic growth.

Lol, aka... inflation? Under this logic we should use Mickey Mantle baseball cards for our currency.

There aren't very many thirsty people in America. We are so spoiled are poor people are obese.

How has the USA been shrinking? What metrics are you using? If you mean the IQ of common American's, yes I think it has been shrinking.

I don't need to read a link on hyperinflation. I understand what it is. You are worried to much about money and not enough about production. As long as the US produces goods people want, people will want dollars. Societies destroy themselves then face hyperinflation, not the other way around.

What? This makes no sense

I don't say I'm a golden child. Like I said, I advocate what the USA does, and I talk about why they have done it in the past and why they want to do it now. You are the one making up your own belief system on what we should do with our $14 trillion economy... it's embarrassing, and you do not even use numbers or facts in your argument. Just pure Government conspiracy theories

My belief is based on reality as in what the Fed's do, what the Govt does, and why. You are the one questioning the establishment with out even understanding what the establishment believes or why they believe it. If you want to go against all the top economic minds in banking, economics, monetary policy, etc, then you have got to bring something to the table. Your appeal to philosophy and psychology doesn't work around intelligent people who use science, numbers, math, and logic.

 

No, I am as intelligent as I think, because I don't say stupid nonfactual crap because I hate the Government and want to protect my party. I just simply talk about factual information backed by math and empirical evidence. Your theory provides absolutely no mathematical analysis to it what so ever. Just some weird imagination of a Utopian society.

 

So why is it that your allegedly logical and detailed economic analysis is always accompanied by moralizing?

Anyway, your velocity of money theory is lovely, but it's just a theory, and, like most of your arguments, flawed. Money is not wealth. It is a medium of exchange and acts as a store of wealth. It does not "circulate" as it it were wealth.

Goods aren't paid for with money, they are paid for with wealth. Money simply acts as a medium that facilitates the exchange of wealth in a manner that is more efficient than trading, say, 20ft of road for a plumbing job. However, when you purchase something it is not with the money you have paid but with the labor from which you earned some income or goods you have produced.

If money and velocity were a means of payment or of funding, then we could eliminate poverty by increase the velocity. The faster people spend, the richer we all become. Does that really make sense?

"In analyzing the equation of exchange one assumes that one of its elements--total supply of money, volume of trade, velocity of circulation--changes, without asking how such changes occur. It is not recognized that changes in these magnitudes do not emerge in the Volkswirtschaft [political economy, or more loosely `economy'] as such, but in the individual actors' conditions, and that it is the interplay of the reactions of these actors that results in alterations of the price structure. The mathematical economists refuse to start from the various individuals' demand for and supply of money. They introduce instead the spurious notion of velocity of circulation fashioned according to the patterns of mechanics." (Human Action, p. 399)

 

You are very correct, Roelath.

Especially when you say, "You forgot that the Government spending either has to come from increased taxation, borrowing or the printing of dollars."

The Keynesians sincerely and honestly believe the government can print new money, distribute it to the states in the form of a stimulus package, and the states, together with the federal government, can use the money to hire new government workers and grow the economy.

The important ingredient they always overlook and often forget is the law of unintended consequences. This is the very mistake Obama has made.

What most people don't realize is, for every Government job that is "created" the private sector must create at least NINE jobs to pay for it.

Here is how the math works. Taxes from each private sector worker go to pay at most 11% of the Government worker's salary and benefits. Therefore, it will take NINE private sector workers (100% divided by 11%) to pay for the salary and benefits of each NEW government worker.

The solution to this problem is obvious; we need to employ as few government workers as is economically and reasonably possible.

 

Lol, it's not a theory. It is actual fact backed by observational proof. There is no theory to the velocity of money. And you just answered your own question. It is not wealth... that's why there is a penalty for holding on to it as if it were wealth. The velocity of money is what makes this country... people spending.

Supply and demand. If there is someone willing to supply it and someone will to buy it then all you need is a medium of exchange. This is no different than someone stumbling upon tons of gold in the gold standard. They didn't do anything to earn that wealth, there is no wealth applied to what they can get with that gold as a medium of exchange.

The Government provides the function of introducing more fuel to the economy, and like I demonstrated mathematically, there is a reason.

Yes, actually it does, which is why we have such a large per capita GDP. What's funny is how you think that doesn't make sense. Transactions is what creates wealth.

Just pure philosophical bull crap.

 

Oh love this place.
Roelath 1 .. akphidelt 0

um I don't see the problem. System one is fair and balances, System two is unfair and doesn't balance, the "government" (here I am presuming government is neither player#2 or player#3 but a fourth player) has to come up with $2000 so poor old player#1 can sleep at night worrying about having to "give back" his hard earnt $1000 to those who earnt it for him.

If he did, he may have to get welfare (they're the ones created by the government, to dole out the $2000. Hmm maybe welfare is another player, player#5. Oh I am getting confused.

A simple solution is to find a couple of thousand lying around that no body is using. Ah Ha, there is a thousand lying under player#2, so player#1 gets player#2 to go and dig it up.

Now player#2 is used to not getting their $1000 dollars because the country where they live keeps most of it to stop him from trying to get a fair share of his $1000.

So player#3 arrives at player#2's country to get the $1000 dollars burried under player#2 for player#1. You still with me.

Now player#3 is big and muscly which is why player#1 picked him, so he forces player#2 to dig up player#1's $1000.

Now we see that ...

player#1 is allowed to live = profit
player#2 gets a pat on the head = profit
player#3 gets another $1000 = profit

hmmm seems good doesn't it but wait, we are still short $1000

Ok lets look at inflating land prices, like now we have player#2's country too, so we can rape that for a few more years. The ionic balance in the water is such that the "Real" dangerous chemicals won't reach player#1's mansion for at least 3 generations and as he hasn't seen them yet so it doesn't matter.

Anyway, it will be their problem then, and they will be smarter, they will solve the problem by then, and well haven't we already started space exploration?

I am sure they will find some where to go ha ha ..... waiter .. bring the cheese platter thanks, have you change of $1000?

 

It all depends on what is more important to you. The American economy, or simply survival of the fittest.

 

Yes, you state stupid, non-factual crap consistently. There is no math that governs the economy and all empirical evidence supports my statements.

Get a refund for your "education."

 

You are very correct, hoytmonger.

"akphidelt" does a lot of "arm waving" and that is about all.

You notice he never provides any credible references with his assertions!

The Keynesians sincerely and honestly believe the government can print new money, distribute it to the states in the form of a stimulus package, and the states, together with the federal government, can use the money to hire new government workers and grow the economy.

The important ingredient they always overlook and often forget is the law of unintended consequences. This is the very mistake Obama has made.

What most people don't realize is, for every Government job that is "created" the private sector must create at least NINE jobs to pay for it.

Here is how the math works. Taxes from each private sector worker go to pay at most 11% of the Government worker's salary and benefits. Therefore, it will take NINE private sector workers (100% divided by 11%) to pay for the salary and benefits of each NEW government worker.

The solution to this problem is obvious; we need to employ as few government workers as is economically and reasonably possible.

 

Your all wondering what happened to poor old player#1, I mean he has all this time on his hand and $2000 burning a hole in his pocket. And then there is player#7, she is his wife, Mrs Player#1 III she likes to be called.

He is taking her to an exotic location, player#2's island resort. Of course it isn't owned by player#2, oh heck no, it's a subsidiary of player#1's mining company.

Player#2 works there after work in the mines and the pay is so good, every week he gets a litre of de-toxified sewerage water to compliment the pound of recycled artificial non fat corn husk meal substitute. If he works hard in a few years he can get a promotion which would give him enough food and water for others in his family if they make it. So let's get behind them ... go player#2 rah rah rah.

Well the boy is back with the BMW you will have to guess the rest

 

What do you mean by it (the velocity of money) "makes this country"? Are you suggesting that the entire culture is the economy? Ridiculous. I don't see any reason to go down that rabbit hole with you, as much as you seem to like those rabbit holes.

Money isn't wealth. However, you will have to agree that your messy argument also applies to counterfeiters of FRNs. Therefore, am I correct that you would argue that the US would be better off if counterfeiters were to print large sums of money?

I see, so the government, you argue, can simply print endless amounts of money in order to fuel wealth? Something seems flawed in your simplistic analogy. Oh, maybe it's that all those FRNs are like fuel, as they can be burnt.

You're right, I don't think that makes sense. Take a butcher and a baker. The butcher has a pound of meat, and the baker a pound of bread. They trade the pound of meat for the pound of bread. It is agreed, each of them considers himself better off for the trade, as each would not have made it otherwise. Therefore, each of them might consider himself wealthier. However, your argument seems to imply that there is a magic in the use of money that adds further wealth, as if the butcher and the baker, when using an exchange media create greater wealth in the exact same exchange.

And here the great economic scientist Akphidelt weighs in with his eminently considered and logical opinion.

 

We are talking about economics. Stay on topic.

If they didn't get caught, yea that would be helpful!

As long as it doesn't surpass our productive output gap then yes, they can print an infinite amount. You still haven't provided any numbers backing up any of your claims. You are trying to refute my claim by asking ridiculous questions. Focus on logic and math and we can have a big boy talk rather than these annoying philosophical and word defining discussions.

What if the butcher wants a pound of bread but the baker doesn't want a pound of meat?

 

If you are going to extemporize, then expect to get called out on it.

What difference does it make if they get caught? But thank you, I'll remember that you have agreed that counterfeiting is good for the economy.

Why do I need numbers? Please explain why you believe that numbers makes something logical and reasonable. Then, if what you say makes sense (which it won't), I'll provide numbers.

You are the one that provided the analogy. Perhaps you should find better analogies.

This is where the media of exchange creates efficiency in transactions. However, there's no magic in that media that creates more wealth by it's simple existance or exchange.

 

Good afternoon, this is player#67 with an urgent newsflash ....
The President, Player#69 said tonight that the secrete service has reported disturbances in the otherwise peaceful Isle of Player#2. Player#2 is uprising against his government as they are paying soldiers more water and corn mash then him to stop him from getting more water and corn mash from the aide paid to the government by player#1's company.

Player#1 is asking the president at dinner tonight on player#1's yacht.

We will keep you posted here on the Player#1 Network......