Paul Krugman is Still Selling a Fake Alien Invasion as a Boost to the Economy

[jem]

Quote from Ricter:

You're still missing the whole point. Krugman is right, a faked (and believed) alien invasion and the spending to fight it would in fact create jobs.

it would create jobs.. but in economics there no free lunch. would it efficiently create jobs or we it devalue your dollar or increase our debt burden so much you are just robbing from other sectors.

we are already in so much debt and we are already fight wars.

so:

1. do you think get us out of the wars we are fighting would be good or bad for the economy.

2. if you wish to distinguish the alien invasion prep.
please do so.. if you cite infrastructure.... please explain:

a. why it would be better than his green investments

b. why it would be better than porkulous which arguably created zero jobs.

 

[PiggyBank]

Quote from Ricter:

Well, there's no actual shortage of currency (some here think that there's too much of it, which is why we have 10%+ inflation), so if consumers don't have it, where is it?

If you're referring to the bailout/stimulus/qe money, I assume most of it is still in the banks. Or a better way to put it, is that most of it isn't in circulation. This could be a good thing if the plan at this point is to let the banks get into a financially sustainable position and then move the stimulus money back to the fed without it going into circulation. They didn't actually print bills, I think it was just a digital transfer of monopoly money.

So basically I have no idea where the money is but according to what I remember from economics at college, if that vast new supply was released into circulation it would have to cause inflation/decrease purchasing power of the $, because it is a relatively large amount (not even sure how much anymore) to the existing supply and the effect on purchasing power would be proportional.

Also, the problem with all this is that bank accts and salaries/wages aren't going to increase to make up for the loss of purchasing power while the prices of products and services will increase to keep profit margins in line. This raises the cost of living.

 

[Tsing Tao]

Quote from Ricter:

You're still missing the whole point. Krugman is right, a faked (and believed) alien invasion and the spending to fight it would in fact create jobs.

I'm not missing any point. You're just avoiding any question I pose to you (as usual). As for spending money on a fake alien invasion (if believed), he's arguing the same point as creating a war to boost the economy. It would, in fact, create jobs. It would also stack on debt in an era where debt can no longer be safely stacked on.

The jobs the fake invasion would create are mostly in defense (hence the invasion) just like a war would do. But at the end, the jobs would have to be downsized, unless you plan on having the war last forever.

 

[Tsing Tao]

Quote from Ricter:

Well, there's no actual shortage of currency (some here think that there's too much of it, which is why we have 10%+ inflation), so if consumers don't have it, where is it?

It's in the banks, who are using it to speculate with, not lend. This is why we're seeing commodity inflation that causes food and energy to rise, but prices on things like houses drop.

 

[Tsing Tao]

Quote from PiggyBank:

If you're referring to the bailout/stimulus/qe money, I assume most of it is still in the banks. Or a better way to put it, is that most of it isn't in circulation. This could be a good thing if the plan at this point is to let the banks get into a financially sustainable position and then move the stimulus money back to the fed without it going into circulation. They didn't actually print bills, I think it was just a digital transfer of monopoly money.

So basically I have no idea where the money is but according to what I remember from economics at college, if that vast new supply was released into circulation it would have to cause inflation/decrease purchasing power of the $, because it is a relatively large amount (not even sure how much anymore) to the existing supply and the effect on purchasing power would be proportional.

Also, the problem with all this is that bank accts and salaries/wages aren't going to increase to make up for the loss of purchasing power while the prices of products and services will increase to keep profit margins in line. This raises the cost of living.

The vast majority of the money is with the banks, held at the Fed in deposit reserves. But it can still be used to speculate with.

 

[Lucrum]

Quote from Tsing Tao:

It's in the banks, who are using it to speculate with, not lend....

My employer is trying to sell an 1987 model private jet. I'm told that practically no bank will make a loan to a buyer to purchase it.

As you might guess prices on these older aircraft have plunged.

 

[jem]

how much?

just kidding.

I have a client who had a private jet. I think I would love to have one parked in carlsbad... ready to got to HI or skiing in utah at any time.
quick jumps up to new england in summer or down to florida to see family and friends.

 

[PiggyBank]

Quote from Tsing Tao:

The vast majority of the money is with the banks, held at the Fed in deposit reserves. But it can still be used to speculate with.

This is a dilemma for me. On the one hand I think that what happened preceding 2008 was a once a century type fuck up for Wall St and that overall they know what they're doing (relative to the govt at least) so I feel like if they have decided to trade their way back to prosperity instead of lending.. well it will work out.

On the other hand, they did turn to socialism and scare tactics to get bailed out of the mess they created. goldman even decided to cannibalize its own clients, gotta admire their survival instinct I believe the bailout money was granted for them to lend as well, so how they end up not lending and just speculating is a little mysterious. I'm sure the fed govt could lean on them more but maybe they just defer to these guys in private. I can picture barney frank blabbering on to save face in public but then when meeting with the bank execs /board they tell him how it has to be.. same with bubble ben. Anyway, I find it hard to argue for these banks after what has happened, and I hope the fed has demanded a decent rate of return on all this 'stimulus' money. IMO there shouldn't have been a bailout. What do u think would have happened if there wasn't a bailout.. and more specifically do you think the economy would have survived?

 

[Lucrum]

Quote from jem:

how much?

just kidding.

I have a client who had a private jet. I think I would love to have one parked in carlsbad... ready to got to HI or skiing in utah at any time.
quick jumps up to new england in summer or down to florida to see family and friends.

Probably less than you think. Currently asking $550,000. They paid $1.94 M for it in 2004. Airworthy and ready to fly.

 

[PiggyBank]

Quote from Lucrum:

Probably less than you think. Currently asking $550,000. They paid $1.94 M for it in 2004. Airworthy and ready to fly.

damn, do they depreciate like cars?