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M
morganist
Quote from Chausey:
Short answer yes. If you're sitting inside the Federal Reserve do you feel safe not doing something? All money is born from human decisions where the humans behind the decision to loan don't have to put up a "consideration". So let's see, 7 billion people on this planet, 5% of the population sits in a nation that has the potential to destroy the rest or starve it, a history of acting independently and revolting. What are they gonna do? Rely on cable news to convince people not to charge the castle? Won't work. Milton Friedman himself is not man enough to pass up 21st century comfort for anything less. Gas lines that heat the Chicago School chopped, he will come to see what Free Market means. Everything is free market, everything open to being dismantled for something worse. The free market depends on government for a currency decree. After that, this phony debate goes out the window. Graduation Day.
I meant more should they use another mechanism that does not have the problems the interest rate has.
M
morganist
Quote from oldtime:
and what would that "other mechanism" be?
They could use fiscal policy or a tax based income policy. Personally I would use the Current Pension Rebate. I wrote this a few years ago and got asked to meet Vince Cable to discuss it. He is the business Secretary now. The paper is linked below.
The figures are out of date but the concept is good.
http://www.morganisteconomics.org.uk/Documents/WhatIsTheCurrentPensionRebate.pdf
M
morganist
Quote from morganist:
They could use fiscal policy or a tax based income policy. Personally I would use the Current Pension Rebate. I wrote this a few years ago and got asked to meet Vince Cable to discuss it. He is the business Secretary now. The paper is linked below.
The figures are out of date but the concept is good.
http://www.morganisteconomics.org.uk/Documents/WhatIsTheCurrentPensionRebate.pdf
Depending on peoples spending habits the level of demand will change. Rather than using the interest rate to encourage saving why not use pensions?
Quote from Chausey:
Sorry I got off on something else there. Yes I agree they should use something other than interest rates. Enforce anti-monopoly laws, break up the biggest banks and corporations. The government used to do this, but power got too concentrated and became captive.
Exactly. Instead the power was consolidated even more acutely since 2008. The biggest I-banks should "strip out" and divest of the many conflicting revenue centers that continue to put depositor's at risk and force the hands of the government to either: continue to bailout the shadow banking system OR enact more complex and bloated legislation to try to enforce regulation of a financial system that is basically un-manageable in its current form.
Just about every constructive idea that arose during the "crisis" four years ago was ignored because as you put it "power got too concentrated and became captive".
" Milton Friedman himself is not man enough to pass up 21st century comfort for anything less. "
the man is not alive.
" Everything is free market, everything open to being dismantled for something worse. The free market depends on government for a currency decree. After that, this phony debate goes out the window. "
there is no law of nature that says you have to have a
central bank eg. fed
the US grew quite nicely before establishment of fed 1913.
since then it has been nothing but an engine of inflation, a tool of the politicians. prices are up 8 to 10x since 1946.
the man is not alive.
" Everything is free market, everything open to being dismantled for something worse. The free market depends on government for a currency decree. After that, this phony debate goes out the window. "
there is no law of nature that says you have to have a
central bank eg. fed
the US grew quite nicely before establishment of fed 1913.
since then it has been nothing but an engine of inflation, a tool of the politicians. prices are up 8 to 10x since 1946.
Quote from Chausey:
Sorry I got off on something else there. Yes I agree they should use something other than interest rates. Enforce anti-monopoly laws, break up the biggest banks and corporations. The government used to do this, but power got too concentrated and became captive.
they should have led the banks fail. monopoly was created because the gov't bailed them out.
wilbur mills and vulture investors, if given the opportunity, would have started new banks and recapitalize old ones.
the reason it was not done is that the gov't likes big banks because they can tell the big banks whom to lend credit to without nationalizing
them.
Quote from morganist:
Is the question so much what they are trying to do? Or how they are doing it?
When you consider the results so far in light of both what they have and are doing, it leads you directly to what they are trying to do. And, in my view, they are, so far, succeeding amazingly well, especially considering the magnitude of the self-inflicted crisis they were faced with. The Fed has been likened to a fire department called to put out a fire they themselves started, and not without considerable justification. At least they are skillfully putting it out.
They have used a clever and broad range of tools, but they must rely on Congress for help on the fiscal and revenue sides. They are limited by Congress as to what they can and cannot do.
Bernanke has repeatedly stated that current deficits are not sustainable, but I am confident he realizes that now is not the time to balance the budget. That will have to wait until the economy recovers. And it will!
It's abundantly clear that the President's Council of Economic Advisers are, in the main, followers of Keynes and I am sure Bernanke is as well. And thank goodness! I cringe every time I hear measures put forth that if adopted would derail the program embarked on by the President, the Treasury and the Fed, and reverse the good progress already made.
The U.S. must bring its revenues and expenditures into balance, but this must be done wisely using a balanced approach spread out over many years. The two areas where there is the greatest waste and the worst ratios of benefit to cost ought to be concentrated on. These are medicare/medicaid and defense.
At the same time none of us should remain blind to the serious trampling on the Bill of Rights that has been going on ever since 911. I see this as a far more serious matter then any creeping-in of socialism that many of you seem so fixated on. But that's a subject for another day.