The Ecomony will not Recover until the Government Spends MORE Money!!

Non sequitur. There is nothing saying that pumping an economy full of steroids (which is what I believe Keynesian monetary policy is) wouldn't result in hyper-growth, while manifesting serious negative symptoms (like spreading disparity between rich and poor; like increasing debt, etc).

There is also no frame of reference to refute the notion that the non-graduated portion of the exponential curve cannot result in the above "in a century".

What matters now, however, is that this rapid increase doesn't have another century in it, as - obviously - the first century consumed the non-graduated portion of this inflationary curve.

What is being contended by me, however, is that we're now on the graduated (read: rapidly increasing in slope) portion of your program.

There is no such thing as "making things up" when it comes to charting this curve: it's in your own published graphs. What do you think those curves indicate?

Decay to 0. Simple math, as you like to bray.

 

That's true - so you're saying that the FED action was worthless?

Also: does it mean that 'when the economy improves' the balance sheets of bank's resources available for lending will instantly cause an unregulated injection of currency into the market, thus instigating this inflation eventually?

 

Now you aren't even trying

 

The curves indicate that the national debt grows continuously. That does not mean there is a problem with the debt at this moment. That does not mean we can't grow it continuously to infinity. The debt will always grow like it has for the past century... in 50 years it will probably be around $150 trillion. There's no consistency in it's growth, but over the past 60 years the average growth has been less than 10% per year. And this does not include all the other factors that go in to the national debt, like intragovernmental debt, foreign held debt, federal reserve held debt, etc. There are a lot of factors that come in to play with our overall national debt. But there is no reason that we can't continue this on for centuries. There is nothing scary about $16 trillion in this global economy, it's right on pace to where it should be.

 

The Fed uses reserves to target their rates. If they want 0% interest rates, then they have to pump enough reserves in the system in order to achieve those rates. They also are targeting yields on treasuries to lower them as much as possible. So no, the banks aren't just going to start lending trillions of dollars, once the data shows that banks are increasing their lending, and that the economy is growing, the Fed will reverse the process and start raising interest rates again. It's beautiful system once you understand it!! But Mike is 100% correct. The Fed creates base money, which is not included in the broad money supplies. The reason it's not included is because that would be double counting. So when someone says the Fed has injected trillions in to the economy, they are simply misinformed. The Fed has not dumped any money in to the economy. It's simply sitting in an account at the Fed.

 

Okay...do they not lend that money to banks to loan to consumers?

And since banks can borrow from the Fed they do not have to pay reasonable interest to their depositors because they really don't need to use that money?

I really want to know.

 

No, banks do not lend reserves, they simply create deposits by making loans. This is strictly to target interest rates on both treasuries and the overnight rate. So basically banks can borrow reserves amongst each other for nothing which means they can lend with very low rates. That is basically all it means. Banks are not reserved constrained, they are capital constrained and they can make as many loans as they want regardless of how many reserves are in the system.

Here is a detailed paper by the Federal Reserve talking about how banks are not reserved constrained and the ancient old "multiplier theory" is no longer accurate to describe our system.

http://www.newyorkfed.org/research/staff_reports/sr497.pdf

 

I'll take that to mean there never was a lie, and you just made it up as a distraction.

 

There wasn't a lie. You just made it up!

 

Worse contradictory reply, ever.

 

Been almost a year. The prediction still stands. As long as the government continues these austerity measures and does not spend the money necessary for economic growth, we are going to continue in this very pitiful economy. It's pretty much gonna take a massive war with Iran or North Korea in order for the government to spend the money we need.

If more cuts come or the government doesn't figure out a way to increase spending, the economy will go in to a recession. If they continue from there, there will be even more serious consequences.

 

Best thread on the whole (*)(*)(*)(*)ing forum.

The economy is predicted to improve substantially in 2014 due to a budget deal. Republicans finally backed off a BIT on austerity (phew).

 

The issue with government spending, be it to finance the operations of the government, or to stimulate the economy, is the lack of value of that spending in improving the economy. When the government "puts money into the economy" it is not NEW MONEY as the only way government gets money is to take it OUR OF THE ECONOMY BY TAXATION or in the case of deficit spending, by borrowing the money. Neither creates new spending power as it is simply a redistribution of money from one set of people to another.

Similerly, moving money from "savers" to "spenders" does not create new spending because our system of finance already changes one person's savings into another persons investment or spending. Economic growth is attained by increasing productivity and utilizing a growth in labor supply.

 

Utilizing a 'growth in labor' means cheap, high profit labor, proposed, managed and fully controlled by fat cat corporate conglomerates, no doubt (and if that doesn't work, just outsource it).

 

No fraud, it doesn't. When what I was discussing does not relate to bottom wages and most companies do not pay minimum wage. Most corporations are not fat cat conglomerates. You are simply expressing your bitterness and hatred for corporations.

The point I was making was about how little government spending helps the economy since the government gets the money it spends from the economy. Now if you want to discuss that, I'll join you. If you only want to engage in a pity party, bitterness, and hate all business discussion, leave me out.

 

I never asked you to comment to begin with.

All hail the Walmarts of America..I know your stance, quite well so, you can save it, if it bothers you that much.

 

Aski please explain how the country got out of recession and depressions long before anyone ever heard of John Maynard Keynes and government stimulus?

 

Look at the UK for example, government spends less, economic growth. This proves the claim of this thread wrong.

 

I see tons of people try to equate macro economics to personal ones. It sounds sane to the uninformed and laughable to people who know a little bit about how economies function.

 

The I'll ask you the same Question how come we managed to get ouf recessions and depression just fine before anyone ever heard of John Maynard Keynes

 

What does John Maynard Keynes have to do with economics? How is knowing about this guy going to change how economies work? It and he are irrelevant to the fact that circulating money is how you keep an economy going. When it slows down, you you get recessions/depressions. Or a government steps in and puts money in a position to move again, which gets you out of a recession/depression.

 

Define just fine??

 

I wasn't responding to you and who made you God such that you can control responses.

Like it or not, Walmart employees over 1.2 million people. Their wages are equivalent to the other businesses of a similar type and equivalent to the old Mom and Pop stores. You hatred for Walmart has affected your thinking because for unskilled and mostly uneducated labor most of their employees are lucky to have a job. Most people won't hire employees like Walmart hires.

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The issue with government spending, be it to finance the operations of the government or to stimulate the economy, is the lack of value of that spending in improving the economy. When the government "puts money into the economy" it is not NEW MONEY as the only way government gets money is to take it OUT OF THE ECONOMY BY TAXATION or in the case of deficit spending, by borrowing the money. Neither creates new spending power as it is simply a redistribution of money from one set of people to another.
Similerly, moving money from "savers" to "spenders" does not create new spending because our system of finance already changes one person's savings into another persons investment or spending. Economic growth is attained by increasing productivity and utilizing a growth in labor supply.

 

So you support supply side economics? How good did that work for us? Oh right, it worked for a couple of years, then it failed.

It's part of the reason we keep having so called 'business cycles', aka boom/bust cycles. Your idea is that creating things without a demand for them will stimulate an economy, not building consumers to create a demand. It's a backwards and reckless policy.

 

When other countries no longer trust the fiscal responsibility of said country.

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No it didn't; that's a failed leftist talking point. I doubt you even understand the subject well enough to discuss the subject intelligently. You are, after all, the guy who asked wth John Maynard Keynes has to do with economics.