patrick.net

AdHominem says

live and let live. That is what we need more of.

I'd like to build the world a home
and furnish it with love...

Kumbayah.

elliemae says

Seriously, abe - attacking us because we don’t share your views makes you look like an idiot.

Remember, abe, she's being "serioius." That should cause you to take her comments to heart and reflect on yourself. LOL !!!

AdHominem says

liberalism isn’t a disease but pride, arrogance and self-righteous superiority is. live and let live. That is what we need more of.

I agree. Then we could actually have conversations, and find compromises (or the government could), just like back in the day.

I could be wrong, but I think this part:

AdHominem says

but pride, arrogance and self-righteous superiority is

will be lost on Abe.

elliemae says

AdHominem says

live and let live. That is what we need more of.

I’d like to build the world a home

and furnish it with love…
Kumbayah.

I'd like to buy the world a home and furnish it with love,
Grow apple trees and honey bees, and snow white turtle doves.
I'd like to teach the world to sing in perfect harmony.
I'd like to buy the world a Coke and keep it company. It's the real thing...

(Crap, I'm showing my age again.)

Progressive taxation works as long as the shape of the progressive curve favors the right people. Progressive taxation worked fine in the 50 and 60s. It's stable structure started to break down during the 1970s when they started inflating while artificially biasing the Inflation Numbers down. This forced people who should be on the lower end of the progressive curve into higher tax brackets. I believe people making under 50k should be paying 0% in income tax. I believe people making 75k could afford 10%. I believe people making 150k could afford 20%. I believe people making 1 million could afford 40%. I believe people making 100 million can afford 70%.

Right now, we are taxing the crap out of people who make anything above 40k and letting anyone who makes over a million dollars legally evade taxes. We could easily afford to eliminate income taxes for the majority of the American population if we were willing to stop preparing for the day the Russians invade us.

theoakman says

I believe people making 100 million can afford 70%.

Not if you're spending 30 Million a year, on acquisitions and staff.

It's perspective, one way you look at all Americans against the average poor person in South America and suddenly every American seems super wealthy, even our poorest of poor look rich in comparison to people in those countries.

Now our middle class compared to the standard of living of those countries. do they some how deserve to have 70% of their shit taken from them?

Those people making a 100 Million a year, aren't squirreling it all away. They employ and consume, many people who in turn consume and even employ more people to service those peoples needs.

When this 100 mil a year gig is up, it's been proven time and time again, their whole jig is up. If this person doesn't have another cash cow gig, with in five years they end up no better off than the best off middle class person, "IF they are lucky!"

because the person who net 100 million a year is deploying capital to allow the nurse to even have a chance to be employed and pay tax.

pkennedy says

houses, cars, and services will all increase radically

why ?

The government is financially burying all of us. The radical left winger's think things are just fine, and want to spend even more. Everyone else thinks "spending" $500 Million, PER DAY, on interest payments to cover the governments debt is a bad idea.

defeat the debt.com

the government created the 12 regional boards of the fed to do same job as the bank of england did, a huge english private bank, a bankers bank, in order to create stability in the banking sector. This was done to end the phenonimina of bank runs. It is there explicity to support banks in time of crisis, not for joe and jane usa, although by preventing financial meltdown, it does have a tangent to normal americans.

There is a ton of ignorance, double speak, and inuendo among politicians about the fed, because they and the fed would sort of like us to believe that we in some way control it. but we do not. It is a monopolistic super bank, really nothing more.

jljoshlee3 says

It is a monopolistic super bank, really nothing more

They are a somewhat independent entity in charge of US monetary policy. Someone here said, "sort of like a fourth branch of the government." Their goals truly are about stable prices, and optimizing economic growth to the extent that monetary policy can.

When the economy does well, all banks benefit yes.

Those who don't like the fed come up with twisted descriptions of what they do, and of cause and effect, but usually their real issue is with our fiat currency system. If you want us back on some kind of gold standard, with a much simpler monetary system (GLOBALLY), then of course you don't like the fed. Because the fed and it's function are an integral part of the international currency system we have today.

The Federal Reserve operates under a veil of secrecy. It has a track record of devaluing the dollar 96% in less than 100 years. It failed to prevent the real estate bubble. In fact it helped the bubble along rather than raising alarms like it should have been if one of its goals is to insure stable prices. marcus says

Those who don’t like the fed come up ....blah blah blah sweeping generalization...blah blah the new world order blah blah... the leader is good.... blah blah globalism.... blah blah .....gold standard straw man blahh blah

Ben Bernanke even denied the real estate bubble existed right up until he could no longer lie about it and retain any credibility. The Federal Reserve benefits the minority of wealthy bankers and huge corporations at the expense of the majority of working people. That is why it must be exposed and abolished. We don't need a gold standard, we just need freedom from debt. We will never have freedom from debt as long as the Federal Reserve has the power to "stabilize" prices. That is just double speak for maximizing profits for the elites and maximizing debt for the working class while maintaining the illusion of freedom of choice. But whether we abolish the FED or not, the dollar is not going to survive the test of time. It is only a matter of time before confidence in the paper/electronic dollar fails. More than likely the ptb will "save us" with a new North American or even one world currency that will take its place. That is of course if we fail to reign them in/limit their power and learn to take care of ourselves before it is too late.

No offense marcus, mainly just pointing out your sweeping generalization is false/misleading propaganda in support of the aristocracy and one of its tools the FED.

Speaking of sweeping generalizations. Maybe you could explain to yourself, and then the rest of us exactly how this happens ?

AdHominem says

The Federal Reserve benefits the minority of wealthy bankers and huge corporations at the expense of the majority of working people

Your answer is sure to include meaningless general statements such as

debt is bad

devaluation of currency is bad

Funny, I thought that in modern times debt was good. Are you going to tell me that the only way I can start a business that will require 2 million dollars worth of assets is to raise 2 million dollars ?

Regarding devaluation of the currency. I'm not at all convinced that the Fed is singlehandedly responsible for this, but assuming it is, wouldn't we have to consider:

1) What happened to inflation adjusted GDP and inflation adjusted incomes over any time frame we are drawing inferences from.

2) Who does inflation benefit more ? The borrower or the lender ?

3) as to the claim that the concentration of wealth at the top is the feds fault. IS that just because you get to magically assign cause and effect. I saw a leaf fall in to the river. Later I saw a fish. Oh my lord, the leaf turned in to a fish.

Really, I am not bad with logic and reasoning. Help me out.

AdHominem says

It has a track record of devaluing the dollar 96% in less than 100 years.

Why to you keep throwing that meaningless crap statistic out? The only value of any currency is purchasing power per unit of work. The average person 100 years ago worked very hard 10 to 12 hours a day 6 days a week (as did all the children over the age of about 7) to live in a 300-500 sq ft tenement or dirt floor farmhouse with lots of other people crammed in lacking electricity or running water. I think you could safely say that the average standard of living in America has gotten better no matter what the dollar is worth. Please feel free to go back to the good old days if you so desire.

marcus says

Funny, I thought that in modern times debt was good.

Nope. But thanks for the straw man.

marcus says

Are you going to tell me that the only way I can start a business that will require 2 million dollars worth of assets is to raise 2 million dollars ?

Nope. Debt is one way, recruiting investors is another.

marcus says

Regarding devaluation of the currency. I’m not at all convinced that the Fed is singlehandedly responsible for this

It isn't really entirely responsible. Fractional reserve banking, deficit spending (by congress and state and local governments), and the fiat nature of the dollar all play a role in the devaluation of the dollar. Ultimately congress and the people who support congress are responsible for the devaluation because congress authorized the creation of the FED and the people have accepted it and the consequences of deficit spending.... so far.

marcus says

Who does inflation benefit more ?

The people who have FIRST or earliest access to the newly created supply of money before it has a chance to trickle down and cause an increase in prices (typically the elites by nature of their position, power and influence have first or earliest access to any new money that is created).

marcus says

as to the claim that the concentration of wealth at the top is the feds fault.

You misconstrue and present another straw man. It is not the FEDS fault it is congress and the people's fault for allowing them to use the Fed for their own protection. The whole idea of too big to fail and justifying government intervention in markets enables the elites to privatize profits while socializing losses.

For clarification, I don't deny that the fed is ultimately good for corporations, and often for the economy in general, it's specifically this part that I want to understand.

AdHominem says

at the expense of the majority of working people

AdHominem says

marcus says

Funny, I thought that in modern times debt was good.

Nope. But thanks for the straw man.

It's not a straw man, I mean that I (not you) see debt as a good thing.

AdHominem says

It is not the FEDS fault it is congress and the people’s fault for allowing them to use the Fed for their own protection. The whole idea of too big to fail and justifying government intervention in markets enables the elites to privatize profits while socializing losses.

But this was a "black swan" event, and there is new legislation which at least attempts to decrease the chance of too big to fail in the future.

Besides if you wanted to argue for new anti-trust laws, breaking up too big to fail institutions, I would be all for it. That has nothing to do with the Fed. The feds intervention was trying to prevent the ultimate too big failure.

bob2356 says

The only value of any currency is purchasing power per unit of work.

Lets assume this premise. How much work does JP Morgan have to do to rake in interest on deposits he does not even have (they have already been loaned out and "redeposited" to the point where there is at best one dollar in possession for every 10 dollars on "deposit")? Seeing as how JP Morgan does little or no work, and rather is a parasite on the productivity of the working class, why should he and others like him receive bailouts/have a lender of last resort when they overextend themselves?

Advancements in technology that have raised American standard of living aside: What is the likelyhood of a new immigrant or high school graduate with no capital of saving enough money to buy a house, start a business and provide for his family without going into years and years of debt servitude? Can we blame the FED for this reality? Not entirely, but their policy of serving as lender of last resort creates a moral hazard and leads to increased malinvestment. It also results in socialization of losses while allowing private corporations to reap most of the profits. Ultimately the worker pays higher prices for goods and receives lower wages for services because we must first pay the banker and subsidize the losses of the "too big to fail." We must also subsidize deficit spending on foreign wars in the name of National Security and "Making the world safe for Democracy" which are really just about Big Business. The Fed (which is approved by congress and accepted by the people.... for now) makes all this deficit spending and socializing of losses possible.

Debt is a wonderful thing that allows our economy to function. It is only when debt is too high relative to asset values and relative to cash flow that we have a problem. And I am not going to repeat observations made in the past about specific series of events, including the pre-millennial irrational exuberance, or the many financial mistakes made since.

But I have basic problems with the assertion that getting rid of the fed would help prevent bubbles or panics, or (not addressed) that it will help us to function better in an extremely complex international economic environment.

The one thing that you said that I agree with very much, is that it is too easy to make sweeping generalizations, or even simple statements that have no sound justification. Since ending the fed would be a enormous challenge, with countless unforeseen effects, it would seem to me that the burden of proof is on you to explain more clearly what the key problem with it is, and also what you would replace it with.

As for deficit spending on wars, which may really be more about supporting the military industrial complex, I agree. But here is where you are wrong. You think the fed enables that. I would argue that China and other purchasers of US Treasury securitities are the real ones who ultimately determine interest rates.

Interest rates are determined in markets. The fed is involved, but please do some homework before trying to assert that any long term rates are determined by the fed.

marcus says

But this was a “black swan” event

WHAT was a black swan event?

marcus says

there is new legislation which at least attempts to decrease the chance of too big to fail in the future

The Fed was CREATED to serve as lender of last resort for the too big to fail. That is the origin of the FED.

Since 2008 there are even less banks, and the surviving banks have become even bigger and more powerful, as has the FED.

So much for reducing too big to fail.

marcus says

The feds intervention was trying to prevent the ultimate too big failure.

Exactly, that is my point. The "too big to fail" (who are really just private corporations that knowingly overextended themselves) create fear that if they collapse they will take us all with them. It is circular reasoning and an endless cycle of fear that keeps us in debt and under control of the FED/Bankers/Corporations.

marcus says

I would argue that China and other purchasers of US Treasury securitities are the real ones who ultimately determine interest rates.

Do you even know who most of the debt is owed to?

AdHominem says

It is circular reasoning and an endless cycle of fear that keeps us in debt and under control of the FED/Bankers/Corporations.

Sounds like a conspiracy theory. What I meant by black swan event, is the crash of 2008 that led to all the bailout. I think it's better to try to continue understanding the credit bubble mentality of the last 30 years, that may have replaced a more vibrant productive economy, before doing anthing as drastic as ending the Federal Reserve.

But this was a once in a hundred years kind of event, that is going to take a long time to come out of. Let's take our time and understand it well.

Think about this. Do you trust our current government to come up with something (to replace the fed) that is less skewed toward the benefit of the rich and of corporations ?

Really ?

AdHominem says

marcus says

I would argue that China and other purchasers of US Treasury securitities are the real ones who ultimately determine interest rates.

Do you even know who most of the debt is owed to?

Yes, and it's not what Al Gore meant when he suggested a "lock box."

marcus says

What I meant by black swan event, is the crash of 2008 that led to all the bailout.

The FED has been bailing out "too big to fails" since 1913. That is the primary purpose that JP Morgan and other big business tycoons lobbied for its creation. Politicians like it because these tycoons help get them elected, and the FED enables deficit spending (it is even a buyer of last resort for US treasuries!) which also helps politicians buy votes. The whole system is an ingenious way of giving the appearance of democratic government while the economy is completely controlled by the elites for the elites.

marcus says

Do you trust our current government to come up with something (to replace the fed) that is less skewed toward toward the benefit of the rich and of corporations ?

Of course not, but I do trust them and the ptb/media to continue to find new and creative ways of making us fear "too big to fail", terrorism, Iran, global warming etc... and to stir up endless meaningless battles between left and right, conservative and liberal, religious vs. athiest, rich vs. poor, minorities vs. Caucasian, tea party vs Obamabots: so that we don't wake up and elect leaders who actaully WILL change our government to one less skewed toward the benefit of the elites.

marcus says

AdHominem says

marcus says
I would argue that China and other purchasers of US Treasury securitities are the real ones who ultimately determine interest rates.
Do you even know who most of the debt is owed to?

Yes, and it’s not what Al Gore meant when he suggested a “lock box.”

Then why do you even bring up the Chinese? The majority of it is owed to the FED and Americans (in the form of pension plans etc...) And with the Fed serving as buyer of last resort on Treasuries that trend is only going to continue. America is more screwed than anyone else when we devalue our own currency. Eventually the world will abandon the dollar as reserve currency and we will know the true consequences of our deficit spending.

AdHominem says

marcus says

Who does inflation benefit more ?

The people who have FIRST or earliest access to the newly created supply of money before it has a chance to trickle down and cause an increase in prices (typically the elites by nature of their position, power and influence have first or earliest access to any new money that is created).

This looks familiar (austrian school).

Banks work with a fairly small spread. Ultimately, when the lend money at 3%, Maybe they borrowed it at 2.7% (including effects of leverage). That is their profit right there, period. But someone probably other than the bank is willing to get a 2.7% return on their money.

Are you certain that the low interest rates now are going to cause inflation ? What's to stop ordinary credit worthy people from benefiting ?

AdHominem says

Then why do you even bring up the Chinese?

Because on any given auction of treasury securities, they may be bidding for much more than their and other foriegn investors percentage holdings. They are a huge factor in the pricing of treasuries, as are all the other investors who happily accept low interest rates. They don't have to. They can go to other countries, or municipalities, or corporations (bonds), etc,....

I brought it up because you implied that the fed facilitated debt that goes toward wars and ultimately corporations. I assumed you meant by its influence on the availability of borrowed money to the government. To me it felt like you then tried to change the subject.

marcus says

Banks work with a fairly small spread

So do insurance companies and casinos. But the longer you play (on average) the more you lose. So the point I am making is lets not play the game anymore. Lets not let the banks and corporations continue to socialize losses while privatizing gains. Lets not allow the FED to enable any more deficit spending.

AdHominem says

we will know the true consequences of our deficit spending.

I agree about the problem of excessive deficit spending. And maybe in a small way the Federal reserve is complicit, but primarily by not stopping it (more than by supporting it). It is almost as if using mirrors and slight of hand, we avoided recessionary pain that might have been beneficial. That is, the austrian school point of view isn't without some small degree of merit.

In simplistic terms, living beyond our means can't be good. But I believe that ultimately incremental increases in taxes, especially at the high end is how you bring about fiscal restraint. Ultimately corporations and the rich have a lot of influence on congress. If you effectively made higher taxes to the rich, an immediate consequence of fiscal irresponsibility, what do you think congress would do ? Which would they chose ? Fiscal responsibility ? or higher taxes ?

It has to become an either or proposition, and then I would have hope.

AdHominem says

Lets not allow the FED to enable any more deficit spending

Okay, I give up.

marcus says

To me it felt like you then tried to change the subject.

I felt the same way about your apparent straw man....

Now, where do the Chinese (or American pension plans for that matter) get the dollars to buy treasuries in the first place?

Our agreement is on the evil of deficit spending. Although I am probably far more sympathetic to some of the sorts of "emergency" spending that may continue to be necessary in coming months or years.

We differ on the solution. Mine is way simpler. Basically an aggressive "pay go" with teeth, backed with very progressive taxation until we fix things.

marcus says

Our agreement is on the evil of deficit spending. Although I am probably far more sympathetic to some of the sorts of “emergency” spending that may continue to be necessary in coming months or years.
We differ on the solution. Mine is way simpler. Basically an aggressive “pay go” with teeth, backed with very progressive taxation until we fix things.

My solution is even simpler. Take our lumps, let the overextended fail and the prudent will rebuild using the stagnant capital goods. There will be no need to increase taxes, if we allow the imprudent to bear the expense of their own mistakes. Yes, whole neighborhoods may fail, yes there will be bankruptcies yes it will be painful, but when you have to swallow a frog, do it quickly.

thunderlips11 says

Would also like to see unearned income taxed higher or at least the same as earned income

I'm not so sure about that. You can raise corporate taxes, or capital gains, but to do both would be bad for investment, and maybe unfair (double taxation).

marcus says

My solution is even simpler. Take our lumps, let the overextended fail and the prudent will rebuild using the stagnant capital goods. There will be no need to increase taxes, if we allow the imprudent to bear the expense of their own mistakes. Yes, whole neighborhoods may fail, yes there will be bankruptcies yes it will be painful, but when you have to swallow a frog, do it quickly.

I've been mostly talking about government deficit spending. I don't see how this prevents congress from wastefully supporting it's benefactors in the future with deficit spending.

marcus says

AdHominem says

Lets not allow the FED to enable any more deficit spending

I hope that you will at least explore the differences between what the credit markets do, and what the Federal Reserve does. After that, we should maybe continue that part of the conversation.

Nomo, you are talking BullFrogs, AdHo is talking little tree frogs. If I have to swallow a frog it will be thinly sliced, breaded and deep fried .. served warm and with some horseraddish to dip in.

If I have to swallow poison, it will be labled "Wild Turkey".