patrick.net

HunterTits says

Misc says

Mathematically it requires growth of the system or the system cannibalizes itself.

No, it does not.

Can you give an example of a system that does not contract when some members "save" without there being a compensating growth in the system?

BoomAndBustCycle says

If enough everyone actually heeded this advice and realized actual cutbacks to save 20% of their income the economy would collapse.

Remember:
Savers still consume
Paid of housing is a form of savings that frees up money for other consumption
We still have taxes

A nation of savers would not collapse the economy. Savers would, however make the rich less rich. Banks would make less interest, and savers, unlike irresponsible borrowers are less willing to bid up prices of homes and autos.

While it is possible for an individual to "save" money, it is impossible for a society to "save" money. At the societal level, all savings schemes are Ponzi.

Hence a society of savers eventually crashes when they all try to cash in their "savings".

HeadSet says

A nation of savers would not collapse the economy. Savers would, however make the rich less rich. Banks would make less interest, and savers, unlike irresponsible borrowers are less willing to bid up prices of homes and autos.

Isn't this pretty much Japan?

Misc says

While it is possible for an individual to "save" money, it is impossible for a society to "save" money. At the societal level, all savings schemes are Ponzi.

Hence a society of savers eventually crashes when they all try to cash in their "savings".

I don't see it.

I understand that money is just a claim on other people's labor, so we can't all be retired. Someone has to work for the money to be worth something.

But why couldn't we all save money?

Patrick says

I don't see it.

I understand that money is just a claim on other people's labor, so we can't all be retired. Someone has to work for the money to be worth something.

But why couldn't we all save money?

if more money is "saved", and there is less money in system, wouldn't we be able to sell our labor for more money? There perhaps would be an equilibrium, provided that no one prints money like crazy, in which case spending and not saving makes sense.

Yes, maybe saving cash under the mattress is deflationary, increasing the value of the money still circulating.

But saving in a savings account traditionally did not end the circulation of that money. The bank lends it out. At least that's how it used to work, but at this point it seems that banks do not have to borrow from depositors because they can just borrow from the Fed for free.

Savings were always used to make loans and allow people to earn interest. By driving rates down to 0%, they removed this whole market mechanism.

Rb6d says

if more money is "saved", and there is less money in system, wouldn't we be able to sell our labor for more money?

But that's how it worked since the invention of the banks all the way until H. W. Bush demolished the Savings and Loans institutions.

And people invest in their 401Ks all the time, how does that not play into your assertion?

It works, because then an economy of hard tangible assets replaces the economy of hand held gadgets and doodads.

You want to see this economy collapse, stop making big screen televisions and smart phones.

In a classic economy based on tangible assets. Poor people save money, and are rewarded with interest.
Eventually they save up enough money to make their dream come true. In the past nobody worried about managed retirement funds!
They saved up to buy a business or invest in assets that could make them more money, or they just let their bank account keep accruing interest.
It was the biggest poverty lifter America has ever had. The 401K economy is designed to keep employees enslaved at a shitty job they despise and can never get ahead. So they dream until the day they retire. In the past, you only had to put of with a shitty job, until you made enough money to buy a stand of Christmas Trees, a Restaurant, construction equipment, ect.. the list was infinite.
All people look forward for today, is the latest iPhone release.

It's pathetic, and what an ill-informed comment you made about an economy you obviously know nothing about, nor are you Old enough to weigh in on.

It was different world before that Son of Bitch H. W. Bush fucked it up and gave us Bill Clinton, and his idiot son to follow his lead.

I love how stupid millennials think money is like Pie!

If you don't get a big hand full then it will all be gone.

What they don't realize, nothing could be further from the truth. Running out of money because your country is so productive. Is the absolute best way to make your currency worth more, so more money is printed and put into the system.
What they really don't realize, is going back to the Gold standard, would be the way realize their worst nightmares about financial security and access to funds for those not rich.

In a Gold standard society, Rich people grab up all of the gold they can, and then they pay their employees in coupons, only redeemable at their establishments. To make sure they keep all of the gold for themselves.

HunterTits says

??? You think saved money is kept in a Money Bin a la Scrooge McDuck? It essentially is with crap like Bitcoin and non-rented houses (example of non productive assets), but most savings is loaned out or invested (money market accounts, stocks, bonds, etc). That means it is 'in the system'.

I am not an economist so honestly I have little clue, not that economists have much clue either. Perhaps if I keep money under mattress velocity of money drops?

Tenpoundbass says

In a Gold standard society, Rich people grab up all of the gold they can, and then they pay their employees in coupons, only redeemable at their establishments. To make sure they keep all of the gold for themselves.

In our non gold standard fiat society, rich people grab all the assets, and pay their employees dollars that are constantly decreasing in value, insuring that us debt slaves continue to work for them all of our lives and can never have a safe and untaxed way to store value or preserve assets outside of their stock market casinos.

Tenpoundbass says

I love how stupid millennials think money is like Pie!

If you don't get a big hand full then it will all be gone.

What they don't realize, nothing could be further from the truth. Running out of money because your country is so productive. Is the absolute best way to make your currency worth more, so more money is printed and put into the system.

Money is a means to acquire labor, assets, or resources. Another way to acquire labor, assets and resources is to motivate people to give them to you, which can be done either peacefully such as when a church or a university takes up a collection or fundraising drive, or by brute force when a gang, cartel or despotic government forces people to work for them or surrender their assets and resources.

But you must realize that when a government, bank or other corporation (such as those that produce cryptocurrency) can print money that it then uses to acquire labor, resources or assets, the person(s) or businesses that have first access to that newly printed/created money are the ones who own everyone else that lives under the jurisdiction of that economic system.

When money can be created out of thin air, the creator of money owns those that cannot create it. Another way to say that is: in a Fiat currency based economic system, those that cannot create money are dependent on those who can create money.

We can create money though. If you write an IOU to someone and they give you something for it, that IOU is money. They certainly count it as an asset, and could maybe even sell it.

When you go to a coffee shop and put $20 on your coffee card, you're also creating money. The debt on that card is new money, redeemable for coffee. The original $20 goes on its way and is spent by the store, but you still count that you have $20 on the card.

HunterTits says

The old days used to let you multi endorse checks and they would be passed around before being finally cashed, after all.

Yes, and all that multi-endorsement was doing is passing around title to that cash held by the bank.

PeopleUnited says

In our non gold standard fiat society, rich people grab all the assets, and pay their employees dollars that are constantly decreasing in value, insuring that us debt slaves continue to work for them all of our lives and can never have a safe and untaxed way to store value or preserve assets outside of their stock market casinos.

In the 80's Japan grabbed up all of our RE assets in our large cities. It was a real concern, that Japan was going to end up owning us.
Market corrections bankrupted them. Donald Trump made a killing off foreclosed Japanese buildings.

Patrick says

Why do they even think that? I don't see the reasoning.

Because of interest on debt. If all debts were paid with money in existence, there would still be interest owed. Growth is needed to pay interest which can never be paid off. A treadmill forever.

Patrick says

When you go to a coffee shop and put $20 on your coffee card, you're also creating money. The debt on that card is new money, redeemable for coffee. The original $20 goes on its way and is spent by the store, but you still count that you have $20 on the card.

The Knights Templars were the first to create that style of system. Before that, a Usury fee was illegal punishable by death. But in the middle ages during the Crusades, Crusaders would get robbed on the road to the Holy War. So the first prepaid credit system was created, where the solider would pay money at the start of the trip, then given a coupon to redeem when they got to their destination.

By not carrying the gold and silver on them, more of them managed to make without being robbed and killed along the way.

HunterTits says

No, that is creating credit, not money. They are two different things.

Depends on how you want to define money. Most money actually is credit.

When the Fed creates money, they are actually creating a debt. That is, the Fed will create money with which to buy US Treasuries or other bonds. When the bonds get paid back to the Fed, the money disappears just like it was created, back into nothingness. I think they call it "sterilization" of debt.

So new money by the Fed is always temporary. It eventually gets paid back and goes away, so the Fed has to keep making new loans to keep the money supply up.

I don't understand the details, but I think that's the basic process in the US.

I think we should be pouring money into some AI sim city simulator that can be created to enter economic scenarios in and see how it plays out before making economic decisions.
Then you just tinker with tax cuts, stimulus, FED rates ect. to get a rough idea of how it effects the economy... before unleashing it on society.


I know human behavior and spending is complex... but I would think you could get a ballpark of how economic decisions would play out for society in a simulator of sorts.

Maybe that would be better for society than another Grand Theft Auto sandbox game.

HeadSet says

A nation of savers would not collapse the economy. Savers would, however make the rich less rich. Banks would make less interest, and savers, unlike irresponsible borrowers are less willing to bid up prices of homes and autos.

In the short run... if everyone started saving 20% of their income like a light switch... I can’t imagine it not crushing the economy. There would be some form of a reset and then a new normal. Job losses would then make it impossible to save 20% because people would lose jobs.

The pandemic was actually kind of a test case of this. Everyone was forced to save huge in 2020... they couldn’t spend if they wanted to. It led to a huge fast crash... and by end of the year more millionaires and billionaires than ever. A mini reset of sorts.

If a Nation of savers would starve the economy, then why didn't a full year of Covid restraints crash the global economy?

Patrick says

So new money by the Fed is always temporary. It eventually gets paid back and goes away, so the Fed has to keep making new loans to keep the money supply up.

I don't understand the details, but I think that's the basic process in the US.

And anytime they want they can restrict the supply and cause havoc.

The Federal Reserve's creation premise was to stop the boom and bust cycle that is the nature of capitalism. Within two decades America had a bust so great they called it the great depression.

The cabal of private banks have been accumulating assets ever since they implemented their plan to take over the US currency.

Money for nothing, live on interest and fees.

That ain't workin', That's the way you do it.

Tenpoundbass says

https://www.forbes.com/2009/12/26/stumuls-spending-economy-money-opinions-columnists-john-tamny.html?sh=13ab169327ff

This article from above says just the opposite:

https://www.forbes.com/2009/12/26/stumuls-spending-economy-money-opinions-columnists-john-tamny.html

That is, savings boosts the economy. Savings doesn't just sit there, it gets lent out or invested.

Laissez-faire capitalism may not "collapse" without it, but you're lying to yourself (and every person within a capitalist system) if you think capitalism doesn't generate perverse incentives to generate growth for individual companies while disregarding and wherever possible externalizing the associated costs.

Laissez-faire capitalism, not "socialists," is why we have unchecked immigration and pay lip service to the problem and serve up expensive ineffective solutions like the wall while blatantly ignoring existing laws that would be revenue positive if prosecuted.

Capitalism is great at getting people to shill for oligarchs against their own interests. The mistake people make is assuming siding with the oligarchs places them on "the side of" the haves, when in fact they are have-a-little-want-mores much closer to have-nots than the actual string pulling haves of late stage capitalism.

Tenpoundbass says

If a Nation of savers would starve the economy, then why didn't a full year of Covid restraints crash the global economy?

Well the economy did crash in March 2020. Just not for long. If we didn’t have the tech to work from home it would have been way worse. If this happened in 1995 with 14.4 baud modems and no Amazon delivery... it would have been disastrous.

People sat home and plowed all their vacation funds into the stock market instead. If you actually looked at earnings of the travel and entertainment sectors outside of big tech it was a disastrous year.

I saw an interesting graph from Schwab showing that foreigners also put their money into the US stock market when the Wuhan Virus panic spread worldwide.

Patrick says

That is, savings boosts the economy. Savings doesn't just sit there, it gets lent out or invested.

The problem is for people to save they have to stop buying Teslas, expensive clothes, HGTV home remodels ect. First thing that happens when frivolous spending stops is those frivolous spending sectors go belly up. If I invest in Tesla stock but don’t ever buy a Tesla how does the company make money?

What happened this go around is they cut off everyone’s ability to spend on a specific sector. All those vacation plans got cancelled and that money got saved and in many cases put into the stock market once they felt comfortable with there emergency funds level.

Maybe it’s just me... but I have no clue how any clothing stores stayed in business. Then again I only buy new clothes to go on vacations and events. So I probably am not their prime market.

Automan Empire says

Laissez-faire capitalism may not "collapse" without it, but you're lying to yourself (and every person within a capitalist system) if you think capitalism doesn't generate perverse incentives to generate growth for individual companies while disregarding and wherever possible externalizing the associated costs.

Laissez-faire capitalism, not "socialists," is why we have unchecked immigration and pay lip service to the problem and serve up expensive ineffective solutions like the wall while blatantly ignoring existing laws that would be revenue positive if prosecuted.

Capitalism is great at getting people to shill for oligarchs against their own interests. The mistake people make is assuming siding with the oligarchs places them on "the side of" the haves, when in fact they are have-a-little-want-mores much closer to have-nots than the actual string pulling haves of late stage capitalism.

I agree with all of this.

Companies will do whatever is legal to maximize profits. Their management must legally act in the best interest of shareholders, even if that is the opposite interest of the country..

Corporations also work hard to change the laws to be more harmful to the country in order to boost profits. Bogus "guest worker" visas are a great example. The H1-B program drives down salaries for American tech workers so that Zuckerberg can save money on salaries. Like he needs to.

And yes, if we were to imprison and massively fine everyone who employs an illegal, we would not need a wall at all. There would be no jobs here for illegals.

Tenpoundbass says

If a Nation of savers would starve the economy, then why didn't a full year of Covid restraints crash the global economy?

Because they weren't SLL savers. Many are broke and only able to stay afloat through government $$/unemployment/moratorium. If there was so much saving, how did the billionaires make so much $$?

Patrick says

I agree with all of this.

Ask yourself how this notion came to be written here. Did the thought originate in OP's mind, or did it slip in via propaganda, already baked into the form that benefits the oligarch class while ultimately working against everyone here on Patrick.net?

Will people become more vigilant about the pervasive propaganda in the internet age, learn to distrust its particular flavor, and hold sources that passed it along accountable? Or will they bury it the moment another clickbait title comes along that seems to fit their preconceived notions, and pass along oligarch propaganda without compensation?

https://www.reddit.com/r/TheRedPill/comments/97f0kh/distrust_that_particular_flavour/

One interesting point:

The greatest expansion of living standards for Joe Blow happened 1940-1970, with most of it happening prior to the early 60s.

There was intense distrust of Wall Street and Stocks, so much so that the Stock Market didn't recover from pre-depression highs until the mid 1950s.

Many people who lived in the Great Depression didn't trust banks, either.

So that world-record growth was NOT fueled by ordinary people investing savings in stocks.

Patrick says

And yes, if we were to imprison and massively fine everyone who employs an illegal, we would not need a wall at all. There would be no jobs here for illegals.

E-verify and Trump's inaction on it...

Rb6d says

E-verify and Trump's inaction on it...

Trump didn't do a lot of things he should have.

He did, however, take the shot. If you get the Wuhan can you get it again? If not why the shot? If you can, why the shot? Something fishy going on.

Onvacation says

He did, however, take the shot. If you get the Wuhan can you get it again? If not why the shot? If you can, why the shot? Something fishy going on.

Yeah, nothing with Covid makes any sense. Was disappointed to hear he got the shot. I felt he failed in the response to Covid and should have just let it do what every virus is going to do once it's out of the bag.

Hollywood has helped to destroy science as well. People have this belief that we can all just duck and cover from a fucking virus and the world will just go on as normal. Put on a suite or mask and we're safe. The biggest flaw was local with people sending covid patients into facilities with already or close to dead people. Not sure who thought that was a good idea.

Onvacation says

He did, however, take the shot. If you get the Wuhan can you get it again? If not why the shot? If you can, why the shot? Something fishy going on.

He did it to convince others that shot is not deadly? to stop potential accusations form the ORANGEMANBAD crowd who will blame him?

The Fed’s official mandate is to keep inflation low and employment high. But it seems that this is only part of the story, the part that makes people feel like the Federal Reserve is good for the worker. The FED after all supposedly wants more people to be employed and the money they are paid with to retain some of its value over time.

The Fed though, is actually a literal blank check that is used by the government to create money to fund deficit spending, But even more concerning than mere deficit spending by government that creates money out of thin air and in so doing benefits the first recipients of this newly created money, the Fed is also a blank check for banks, and wall street to bail them out when their efforts to constantly make money with riskier and riskier investments eventually meet with the realization they are not going to achieve the return on investment they so desperately need. So these risky bets made by banks (by the way fractional reserve banking is the biggest way money is created out of thin air) are backed by the FED. When the bank and big wall street firms make bad bets, the Fed bails them out, which is essentially the same process as giving a gambling addict the money he thought he was going to win at the casino.

The Fed guarantees the wealthy will retain their wealth, and the federal government is controlled by the wealthy. Oligarchy!

Automan Empire says

if you think capitalism doesn't generate perverse incentives to generate growth for individual companies while disregarding and wherever possible externalizing the associated costs.

Laissez-faire capitalism, not "socialists," is why we have unchecked immigration and pay lip service to the problem and serve up expensive ineffective solutions like the wall while blatantly ignoring existing laws that would be revenue positive if prosecuted

This is half right. The first sentence is correct - but you're describing profit motive as though it is evil. It is not. Put another way - "there are incentives (not perverse) to maximize profit".

Your second sentence is just wrong. You are blaming capitalism for a failure in government. Can you honestly posit that in the absence of all government social programs, we would have people coming to this country to work for $7.25/ hour? No, it is because of the subsidized schooling/ food/ rent/ education that they are effectively middle class compared to their home country. It's our government that causes these people to come here and it is the corporations that directly benefit from this - but this is not capitalism - it's either fascism or mercantilism.

At the end of the day people seem to think that government is benevolent and is there to "take care of people". That thinking is what got us to where we are today. Government is a nanny, but it wasn't always that way. It was certainly not what the founders intended.