Global Impending Economic Doom Thread.

Discussion in 'Economics & Trade' started by Carl Von Clausewitz, Oct 5, 2018.

  1. yiostheoy

    yiostheoy Well-Known Member

    Joined:
    Jun 27, 2016
    Messages:
    8,603
    Likes Received:
    3,454
    Trophy Points:
    113
    This is what happens under "Reaganomics".

    Soak the poor and middle class.

    Give to the rich via more tax cuts.
     
    Carl Von Clausewitz likes this.
  2. yiostheoy

    yiostheoy Well-Known Member

    Joined:
    Jun 27, 2016
    Messages:
    8,603
    Likes Received:
    3,454
    Trophy Points:
    113
    My personal view on U.S. Federal taxes is that it should be a flat 14%.

    And only base exclusions from income for food, transportation, clothing allowance, medical, and dependents.

    14% is what Mitt Romney pays.

    IF it is good enough for Romney THEN it should be good enough for everybody.

    Romney has proved that if he can beat the system than anybody who is also rich can.
     
    Last edited: Oct 11, 2018
  3. Carl Von Clausewitz

    Carl Von Clausewitz Well-Known Member

    Joined:
    Oct 1, 2018
    Messages:
    1,761
    Likes Received:
    445
    Trophy Points:
    83
    Gender:
    Male
    Won't work in Central America or South America, they're all pivoting towards China from what I hear. Maybe just stick to North America including friendly economic relations with Canada.
     
  4. Carl Von Clausewitz

    Carl Von Clausewitz Well-Known Member

    Joined:
    Oct 1, 2018
    Messages:
    1,761
    Likes Received:
    445
    Trophy Points:
    83
    Gender:
    Male
    That's only if you believe in the official narrative of 9/11 of which I don't, I agree with everything else you said.
     
  5. Carl Von Clausewitz

    Carl Von Clausewitz Well-Known Member

    Joined:
    Oct 1, 2018
    Messages:
    1,761
    Likes Received:
    445
    Trophy Points:
    83
    Gender:
    Male
    What's your position on taxation regarding low income workers? I was just discussing over dinner this evening with friends if a flat tax would be adequate or not for those who have a low income.
     
  6. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    39,883
    Likes Received:
    2,144
    Trophy Points:
    113
    There may be a greyness looking forward, but looking back we know that crisis is relatively rare. Sometimes, however, we don't know the source. For example, orthodox economists would use oil prices as a classical explanation. That was short sighted as it didn't factor in the consequences of market concentration and its destabilising influence.

    The problem is that you're referring to standard policies used to dampen the business cycle. I'm not a big fan of inflation targets and over-focus on interest rates. I think that encourages innate conservatism and a failure to react to more important issues (such as structural flaws in the economy).With crisis, more radical actions are warranted: from quantitative easing to fiscal investment strategies. We can moan about the stupidity of current policies. For example, austerity should only be applied when there are overheating issues with the economy (and has increased debt and stunted economies). However, there is no 'tried that, no longer available' conclusion with this stuff.
     
  7. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    39,883
    Likes Received:
    2,144
    Trophy Points:
    113
    Monopolistic competition just refers to branded product, so I'd suggesting changing terms.
     
  8. ARDY

    ARDY Well-Known Member Past Donor

    Joined:
    Mar 1, 2015
    Messages:
    8,386
    Likes Received:
    1,704
    Trophy Points:
    113
    That is the great thing about retrospect.... everything is much clearer. To bad we cannot make our choices only in retrospect

    Yes, there are lots of complications. Different people have different evaluations and strategies. You are one of many who feel confident in an idiosyncratic perspective

    Yes, I was discussing standard policies. Perhaps you prefer to discuss non standard (untested) policies

    I did not mention inflation targets. I think they are used as one of several indicators
    Of course an “over focus” on anything is usually wrong.... just as it would also be wrong to disregard interest rates

    What you regard as structural flaws usually start out as some ones brilliant idea

    That strategy has already been used...the feds . accumulated balance sheet is about 5 trillion. This number cannot expand forever. And that is why I consider it a policy of limited value should another crisis emerge

    We have mentioned things such as interest rate manipulation and quantitative easing... as far as I know, both have been tried and would have limited impact if a crisis emerged now
     
    Carl Von Clausewitz likes this.
  9. Carl Von Clausewitz

    Carl Von Clausewitz Well-Known Member

    Joined:
    Oct 1, 2018
    Messages:
    1,761
    Likes Received:
    445
    Trophy Points:
    83
    Gender:
    Male
    They don't have the ability to initiate another round of quantitative easing this time around, that dog won't hunt anymore. Certainly not the next round of economic crisis.
     
    Last edited: Oct 12, 2018
  10. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    39,883
    Likes Received:
    2,144
    Trophy Points:
    113
    Again, you miss the point. It proves crisis is rare. You'd have to show that somehow things have changed. Its certainly the case that neoliberalism has created more macroeconomic problems (e.g. extreme inequalities threaten growth). However, you'd have to show that it somehow impacts on the probability of crisis. Good luck!

    Again you miss the point. Its about difficulties in understanding the source of crisis. The orthodox economist focused on supply side shocks. Their models just weren't up to explaining their existence. This has changed. Ideas from post-Keynesianism, and Marxism, are impacting on the mainstream (which was forced to adapt by the financial crisis).

    Referring to standard policies used in dampening the business cycle? Two aspects with that. First, these policies are always in operation (making your 'one shot' approach look strange). Second, these policies were never designed to eliminate crisis. We see much more substantial reaction for that. Quantitative easing, for example, could be indeed be used again. It all depends on the nature of the crisis and whether there is a need for an influx of money.

    I didn't suggest you did. I merely indicated how dampening policies are applied.

    Irrelevant to what I said. The important point is that conservatism has impacted on macroeconomic policy-making. However, that's all focused on the business cycle (which has confused you somewhat!)

    Deindustrialisation, with a subsequent over-focus on the finance sector, is not a brilliant idea.

    Of course QE can be used again. You've just made bobbins up. This isn't about expansion for ever. Its about what is needed when a rare crisis hits.

    And how did you derive that opinion? I've seen no evidence that its based on any economic analysis.
     
  11. ARDY

    ARDY Well-Known Member Past Donor

    Joined:
    Mar 1, 2015
    Messages:
    8,386
    Likes Received:
    1,704
    Trophy Points:
    113
    No prove that crises are rare. What it demonstrates is thst in most potential risk scenarios, policy makers have acted to mitigate the severity of the the potential problem

    No one ever decided to de infustrialize

    Suppose a severe crisis developed tomorrow
    Is there an unlimited amount that.can be added to the fed balance sheet. And if so, why pay taxes. Simply issue unlimited bonds. That are bought by the fed

     
    Carl Von Clausewitz likes this.
  12. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    39,883
    Likes Received:
    2,144
    Trophy Points:
    113
    Wow, you think the Government are that good? Did they see the financial crisis coming? What counter-measures did they successfully use?

    False. Thatcher decided to do just that when she listened to the stupidity of monetarism.

    Look at your silly criteria. Unlimited amount? You haven't determined anything regarding what the government can or can't do. You've just assumed and got a few likes from a fascist.
     
    Last edited: Oct 12, 2018
  13. ARDY

    ARDY Well-Known Member Past Donor

    Joined:
    Mar 1, 2015
    Messages:
    8,386
    Likes Received:
    1,704
    Trophy Points:
    113
    In late 2907, among others
    You may have an arguement that she caused deindystrialization inadvertantly by adopting misguided policies. You will have ti provide evidence if you feel she explicitly chose deindustrialization
    If there is a limit, what is it. Fwiw, many feel 5T is already too much. Clearly you do not feel 10 T is too much....and your previous comments indicate that would be no limit to use qe again... and again
    Nor did i set out to do so
    That is a rude comment
     
  14. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

    Joined:
    Oct 24, 2016
    Messages:
    9,744
    Likes Received:
    2,086
    Trophy Points:
    113
    Gender:
    Male
    GREAT RECESSION REDUX

    What's there to discuss except the "hype" of this discussion's subject?

    There is NO IMPENDING DOOM on the horizon. Above all for the EU. Perhaps a correction in the US, but it will pass by without a major Demand-crisis.

    Impending Doom means a wide destruction in Consumer Demand, and - last time I looked - there was no global war to trigger such.

    And to think that Impending Doom is coming from the US is another error. There are three Major Economic Forces in existence nowadays - the US (NAFTA), the EU and Japan/China.

    Their collective economic good-fortune is the key figure when analyzing comparative economic might is GDP-per-capita in dollars:
    *NAFTA
    US: 54.4K
    Canada: 45.0K
    Mexico: 17.4K
    Sum Average of above: $40K

    *European Union (EU): $38.4K

    *Japan: 48.6K
    *China: 15.3K
    Sum Average: $32K

    Demand is the determinator of GDP and, in turn, Employment is a function of GDP. When GDP nosedives, so does Total Employment. Both factors have a mutual effect upon one another.

    The first-category above has a healthy GDP/head and there is no reason, Donald Dork not withstanding, that even the Financial Markets will stop it. Total Demand is not a direct function of Interest Rates - though in fact the rates have been going up slightly in the US. We can assume that the Fed (this time around) knows what it is doing.

    The EU is coming out a bit later than the US (3 years to be exact) from its worst recession in EU-history. Demand remains strong, but unemployment rates are still higher than the long-term rates. It's long-term unemployment rate looks like this:
    [​IMG]

    Does that chart above predict an EU employment disaster on the horizon? No way!

    The economic outlook for both Japan and China is, on average, rather good. Both, however, are Net Exporters. In that respect, Japan (which is a higher-cost manufacturer of goods) will slowly but surely be replaced by South Korea. (Which is allowed to produce in North Korea will have, right next door the production prices even lower than southeast-Asia! The uptick for all three Far East countries is looking good - as long as world-wide General Demand remains solid.

    Which is on the cards, unless Donald Dork works hard to create GRR (Great Recession Redux)!

    And don't count that bumbler out as regards that possibility!
     
    Last edited: Oct 13, 2018
  15. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    39,883
    Likes Received:
    2,144
    Trophy Points:
    113
    Government can time travel too? That's very optimistic!

    Aspects of the monetarist experiment disaster was certainly "oops" orientated. However, aspects were also deliberate. From closing down productive mines to an assault on labour rights, there was deliberate effort to create unemployment.

    So you don't actually have a limit, despite being the one implying it's somehow been reached? The comment "many feel" won't wash. Who is included in this many? Aunt Mildred?

    So you don't actually have an argument? You just exaggerate the risk of crisis and confuse that risk with the standard business cycle?

    How so? It was merely factual. You have just assumed. You have presented no economic analysis in support of your argument. <<Mod Edit to remove a rule 3 - Flamebait Violation - Lee S did this>>
     
    Last edited by a moderator: Oct 13, 2018
  16. james M

    james M Banned

    Joined:
    Jul 10, 2014
    Messages:
    12,916
    Likes Received:
    858
    Trophy Points:
    113
    not sure why you say that? Fed can print and buy all it wants under emergency powers. Did you know that?
     
  17. Carl Von Clausewitz

    Carl Von Clausewitz Well-Known Member

    Joined:
    Oct 1, 2018
    Messages:
    1,761
    Likes Received:
    445
    Trophy Points:
    83
    Gender:
    Male
    :laughing:
     
  18. james M

    james M Banned

    Joined:
    Jul 10, 2014
    Messages:
    12,916
    Likes Received:
    858
    Trophy Points:
    113
    not sure why you say that? Fed can print and buy all it wants under emergency powers. Did you know that?
     
  19. Carl Von Clausewitz

    Carl Von Clausewitz Well-Known Member

    Joined:
    Oct 1, 2018
    Messages:
    1,761
    Likes Received:
    445
    Trophy Points:
    83
    Gender:
    Male
    The Federal Reserve has its back cornered against a wall, did you know that?
     
    Last edited: Oct 17, 2018
  20. Pro_Line_FL

    Pro_Line_FL Well-Known Member Past Donor

    Joined:
    Oct 16, 2018
    Messages:
    25,631
    Likes Received:
    13,919
    Trophy Points:
    113
    Gender:
    Male
    Who knows, but there is no better way to trigger one than a trade war. Some seem to celebrate the Chinese economic issues as some kind of "win", but we need to realize that if we force other countries on their knees, we will take a hit too. The stock market is below January numbers and even today the DOW is down another 430 points. The tariffs are taxes on us, the American consumer, so even if they are designed to punish other countries, they punish us too. The economic policy of this admin is reckless, and could well lead to a recession, even a global one. Last time in 2007-08 when US economy collapsed, it took the whole world with it. I wish the conservatives in Congress would stand up and stop it before it is too late, but it seems they are too timid. Only Rand Paul has the cahones to speak up.
     
  21. Pro_Line_FL

    Pro_Line_FL Well-Known Member Past Donor

    Joined:
    Oct 16, 2018
    Messages:
    25,631
    Likes Received:
    13,919
    Trophy Points:
    113
    Gender:
    Male
    They do not need authorization to create money. It is one of their functions.
     
  22. james M

    james M Banned

    Joined:
    Jul 10, 2014
    Messages:
    12,916
    Likes Received:
    858
    Trophy Points:
    113
    section 13(3) allowed Fed broad discretion to bailout banks before financial crisis, but Dodd Frank then limited that discretion. In a bad crisis the Fed would need Congressional authorization to do more than Dodd Frank now allows.
     
    Pro_Line_FL likes this.
  23. james M

    james M Banned

    Joined:
    Jul 10, 2014
    Messages:
    12,916
    Likes Received:
    858
    Trophy Points:
    113
    wrong of course. Stock market and employment are at all time highs so that is hardly reckless. Tariffs designed to promote free trade are exactly what is necessary.
     
  24. james M

    james M Banned

    Joined:
    Jul 10, 2014
    Messages:
    12,916
    Likes Received:
    858
    Trophy Points:
    113
    1) a wall is not a corner
    2) what makes you think the Fed is cornered???
     
  25. Pro_Line_FL

    Pro_Line_FL Well-Known Member Past Donor

    Joined:
    Oct 16, 2018
    Messages:
    25,631
    Likes Received:
    13,919
    Trophy Points:
    113
    Gender:
    Male
    I was not aware of that, but it actually sounds like a common sense idea.

    However, I was not referring to bail-outs, but creation of money, which is what Fed does by utilizing bank lending & fractional-reserve banking system. It is one of their daily functions.
     

Share This Page