Government run "anything"......

[realbrown1]

Tomayto Tomahto.

"But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.

Of course, the U.S. government is not going to print money and distribute it willy-nilly (although as we will see later, there are practical policies that approximate this behavior).8Normally, money is injected into the economy through asset purchases by the Federal Reserve. To stimulate aggregate spending when short-term interest rates have reached zero, the Fed must expand the scale of its asset purchases or, possibly, expand the menu of assets that it buys. Alternatively, the Fed could find other ways of injecting money into the system--for example, by making low-interest-rate loans to banks or cooperating with the fiscal authorities. Each method of adding money to the economy has advantages and drawbacks, both technical and economic. One important concern in practice is that calibrating the economic effects of nonstandard means of injecting money may be difficult, given our relative lack of experience with such policies. Thus, as I have stressed already, prevention of deflation remains preferable to having to cure it. If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation."

There is a cost to print money.

What do you think that cost might be?

 

[DriveInDriveOut]

There is a cost to print money.

What do you think that cost might be?

The true costs are many.
Maybe you should ask the man behind the curtain if you really don't know the answer to that question.

 

[realbrown1]

The true costs are many.
Maybe you should ask the man behind the curtain if you really don't know the answer to that question.

I know the answer.

Do you?

You can sum it up in one word.

 

[DriveInDriveOut]

I know the answer.

Do you?

You can sum it up in one word.

Why are you going in circles?
Devaluation of the dollar is discussed in the second damn sentence of the Bernanke quote I posted. Try to keep up.

 

[oldngray]

Why are you going in circles?
Devaluation of the dollar is discussed in the second damn sentence of the Bernanke quote I posted. Try to keep up.

The real value of a country's total money doesn't change that way. If they print more dollars then each dollar is worth less. Its not like they can magically create more money with nothing to support it.

 

[DriveInDriveOut]

The real value of a country's total money doesn't change that way. If they print more dollars then each dollar is worth less.

Let's review here:

"By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services."

 

[oldngray]

Let's review here:

Its called inflation. Simple supply and demand microeconomics. More dollars = dollars are worth less each.

 

[DriveInDriveOut]

Its called inflation. Simple supply and demand microeconomics. More dollars = dollars are worth less each.

Which is what the quote I posted said. So I'm not sure why you posted this:

The real value of a country's total money doesn't change that way.

 

[oldngray]

Which is what the quote I posted said. So I'm not sure why you posted this:

It went back to your earlier post only quoting part of that source making it seem like you were trying to say printing dollars = making money. Really goes back to ricky not being able to realize where money comes from though.

 

[DriveInDriveOut]

It went back to your earlier post only quoting part of that source making it seem like you were trying to say printing dollars = making money. Really goes back to ricky not being able to realize where money comes from though.

Well I think we can all agree it's definitely Ricky's fault.

The printing press quote wasn't meant to be out of context but I can see the confusion. My point was that they know they can print money out of thin air, and they know there will be consequences. They use it as a tool to try and control the economy, despite knowing full well the outcome of their actions aren't certain. The federal reserve plays with our money like it's a science experiment, and they do it with little to no transparency. This is what you get with fiat currencies. Thanks for nothing Ricky.

 

[rickyb]

You really think that government just has an endless stash of money, don't you? The government has $0. $0 - $18,000,000,000,000.00 in fact. That hole is going to spiral faster in the coming decades as our baby boomers suck us dry in social security and Medicare payments. We have 100's of trillions in upcoming unfunded liabilities. So as it stands now, ours (along with the entire world), will see the entire financial system come crashing down. 2008 will seem like a good year in comparison.

Yet you talk about government creating jobs out of thin air, free college, 6 weeks of vacation for new workers, blah, blah, blah.

Do you suggest we give 75% of our paycheck to the government each week so they can throw it into the black hole? If we do that then we are all on the streets.

You really think that government just has an endless stash of money, don't you? The government has $0. $0 - $18,000,000,000,000.00 in fact. That hole is going to spiral faster in the coming decades as our baby boomers suck us dry in social security and Medicare payments. We have 100's of trillions in upcoming unfunded liabilities. So as it stands now, ours (along with the entire world), will see the entire financial system come crashing down. 2008 will seem like a good year in comparison.

Yet you talk about government creating jobs out of thin air, free college, 6 weeks of vacation for new workers, blah, blah, blah.

Do you suggest we give 75% of our paycheck to the government each week so they can throw it into the black hole? If we do that then we are all on the streets.

i suggest taxing the rich and the biggest corporations.

social security is an easy fix, just get rid of the regressive tax it has and its fine for 60 years or something.

the government can print money, borrow money, tax for money.

i agree with u on the next financial crash. and the government will probably have to do major reforms like it did during the great depression to prevent revolution. lets not forget during the great depression the government hired 10 million americans of a population of 120 million and according to dean baker overcame the depression with this program, along with the war which gave u near 0% unemployment. during the great depression the government created unemployment insurance, it created social security, it created a minimum wage. FDR who was president for 12 years, even said he saved capitalism and it was his greatest accomplishment. they funded these programs by taxing the rich.

productivity is way up, as you can see in this chart.
http://upload.wikimedia.org/wikipedia/commons/7/73/US_productivity_and_real_wages.jpg

corporations are enjoying record profits.

and yea ur healthcare system is a disaster and it will probably be socialized just due to cost pressures.

6 weeks vacation or something similar and free or affordable college is the law of the land in the majority of developed countries.

 

[Sportello]

Its called inflation. Simple supply and demand microeconomics. More dollars = dollars are worth less each.

And what is the current inflation rate, pray tell?

 

[JL 0513]

i suggest taxing the rich and the biggest corporations.

social security is an easy fix, just get rid of the regressive tax it has and its fine for 60 years or something.

the government can print money, borrow money, tax for money.

i agree with u on the next financial crash. and the government will probably have to do major reforms like it did during the great depression to prevent revolution. lets not forget during the great depression the government hired 10 million americans of a population of 120 million and according to dean baker overcame the depression with this program, along with the war which gave u near 0% unemployment. during the great depression the government created unemployment insurance, it created social security, it created a minimum wage. FDR who was president for 12 years, even said he saved capitalism and it was his greatest accomplishment. they funded these programs by taxing the rich.

productivity is way up, as you can see in this chart.
http://upload.wikimedia.org/wikipedia/commons/7/73/US_productivity_and_real_wages.jpg

corporations are enjoying record profits.

and yea ur healthcare system is a disaster and it will probably be socialized just due to cost pressures.

6 weeks vacation or something similar and free or affordable college is the law of the land in the majority of developed countries.

Not being like other countries is why we have been the greatest country in the history of mankind. No offense to yours. I don't care what the rest of the " developed world" is doing. Whatever it is, Americans aren't flocking to these utopia's. You talk about these vacations but Americans are workers, at least those of us that do and better ourselves. It's who we are. We even forfeit many of our paid sick days. Many of us work over our vacation weeks. I've worked many of my vacations.

FDR was a disaster. So bad that immediately after his death, Congress limited the Presidency to two terms. His policies, much like Obama's, extended the depression for a decade.

Taxing the rich and corporations....haven't heard that one before. We already have the highest corporate tax rate in the developed world, since you like comparing us. That has helped push corporations to foreign markets. The rich aren't stupid. They take their money where it makes sense to be. You jack their rates up much more, they're gone. Along with all their tax money and spending money that goes into the economy. Then what? The wealthy already pay the majority of taxes. If it weren't for them, the country would be a hell hole.

 

[DriveInDriveOut]

Taxing the rich and corporations....haven't heard that one before. We already have the highest corporate tax rate in the developed world, since you like comparing us. That has helped push corporations to foreign markets. The rich aren't stupid. They take their money where it makes sense to be. You jack their rates up much more, they're gone. Along with all their tax money and spending money that goes into the economy. Then what? The wealthy already pay the majority of taxes. If it weren't for them, the country would be a hell hole.

While technically accurate, that's kind of misleading. Only a poorly run company pays 35% in taxes. The actual effective tax rate is substantially lower given tax loopholes and exemptions. It averaged out to about 12% for large corporations in 2010.

 

[BrownArmy]

I'm trying to quote you JL 0513, but somehow your response to rickyb is imbedded in his quote that you were responding to. So, here's what I'm quoting:


"FDR was a disaster. So bad that immediately after his death, Congress limited the Presidency to two terms. His policies, much like Obama's, extended the depression for a decade."

FDR's greatness or lack thereof will continue to be debated for the rest of time, but I'd like you to expand on this portion of your statement:

"...(FDR's) policies, much like Obama's, extended the depression for a decade..."

I'm not sure that's a fair comparison.

How would you compare/contrast what Bush JR did with the economy vs. what Obama did?

Bailouts are bailouts, what's the difference?

 

[Sportello]

@oldngray, I'm still waiting for your answer as to what the inflation rate is today.

 

[oldngray]

@oldngray, I'm still waiting for your answer as to what the inflation rate is today.

How is that relevant? If you want to know you can Google it.

 

[rickyb]

Not being like other countries is why we have been the greatest country in the history of mankind. No offense to yours. I don't care what the rest of the " developed world" is doing. Whatever it is, Americans aren't flocking to these utopia's. You talk about these vacations but Americans are workers, at least those of us that do and better ourselves. It's who we are. We even forfeit many of our paid sick days. Many of us work over our vacation weeks. I've worked many of my vacations.

FDR was a disaster. So bad that immediately after his death, Congress limited the Presidency to two terms. His policies, much like Obama's, extended the depression for a decade.

Taxing the rich and corporations....haven't heard that one before. We already have the highest corporate tax rate in the developed world, since you like comparing us. That has helped push corporations to foreign markets. The rich aren't stupid. They take their money where it makes sense to be. You jack their rates up much more, they're gone. Along with all their tax money and spending money that goes into the economy. Then what? The wealthy already pay the majority of taxes. If it weren't for them, the country would be a hell hole.

you not caring about what the rest of the developed world is doing is the reason you obviously dont know. that doesnt qualify you to say america is the best. but the point is whats reasonable and decent. yes i am well aware you work on your would be vacation and on sick days.

FDR was the most popular president ever. there was a coup by the business class to get rid of him which failed.

if the rich want to profit off of america, then they should be paying a reasonable amount of taxes. especially considering they are most able to pay for taxes with all their money. saying they cant is just fear.

 

[rickyb]

@oldngray, I'm still waiting for your answer as to what the inflation rate is today.

its not what hte government says it is. unemployment and inflation are both fudged and much higher than the government quotes.

 

[Sportello]

How is that relevant? If you want to know you can Google it.

@oldngray, it is relevant because we have been printing money, the money supply is higher, and the dollar is stronger, yet there is no inflation. Maybe Team Obama is doing something right, in spite of the naysayers.