"Stimulus Package"

[Hakeem]

No, it didn't. It was gone for a long, long time before anyone even noticed. In economies that are developed enough to rely on credit, you don't need money, you need the appearance of money. When banks are handing out money left right and center, it begins to disappear very, very quickly.

When these loans can't be paid back, the money disappears. It becomes debt. Debt that nobody wants to touch. There's about 1.3 Trillion worth of toxic debt in America alone.

That's where your fucking money went.

It was debt to begin with. The person who gives you the loan is the one who pays for the things you buy with it. It stops being debt when the bank stops asking you to pay it back. Then it becomes the debt of the bank directly, since they aren't hitting you up for funds to pay off their debts. When a bank gives out money it doesn't have, it really is putting itself in debt... Intuitively as you would expect...

Our money didn't go anywhere, there was just never any to begin with.

Oh well, I guess the stimulus package can put the debt into the governments lap.

The funny thing all along is that money itself is an "appearance of money". It used to be backed by valuable material, (gold, silver, etc.) but now it simply has value because the government says it does. It's really just one huge pretend game; a fact which I find funny and disturbing at the same time.

"Legal tender."

What's worse, it'll all soon be digital. xD

 

[3rgytr54]

It can't be digital, I refuse- If my $2 bill (or my 2 cent piece) is still legal tender, then my $100 will be in 100 years.

Also, how do you pay 700+billion for something when you DON'T HAVE IT? its like the government is a impulsive buyer, "window shopper", and when ever something looks good, "we'll take it" is the answer. How can you pass that much legislation in a month? I, would read it, read it, and read it to make sure that the bill had no flaws or loopholes, or anything some high-payed lawyer could only find? (They seem to have a bigger brain than a politician.)

Trust me, this isn't going to be as bad as it sounds. What I find weird is every democrat is saying "dire, dire, dire" and every conservative is saying "just a small decline, small, only small." If you tell the people anything, yes anything, they will believe who has higher authority, if you can get someone to believe that you are going to fix the economy, they will stand behind you until the power shifts.
I have had this happen to me, just minor skills instruction though, I had the higher authority, so i taught them the right way- but when they were taught later that night by someone higher than me they believed them even though i had the right way and the second teacher had it wrong.

@brad, I mean the physical cold, hard, cash. Where did it go? You can lend 300,000 in pennies, but it's lent in credit with "backup"

And why should... I won't go that far-

 

[Captain Griffen]

It can't be digital, I refuse- If my $2 bill (or my 2 cent piece) is still legal tender, then my $100 will be in 100 years.

The money supply is more than just physical currency.

Also, how do you pay 700+billion for something when you DON'T HAVE IT? its like the government is a impulsive buyer, "window shopper", and when ever something looks good, "we'll take it" is the answer. How can you pass that much legislation in a month? I, would read it, read it, and read it to make sure that the bill had no flaws or loopholes, or anything some high-payed lawyer could only find? (They seem to have a bigger brain than a politician.)

Borrowing. Governments can borrow because they don't default (usually; the US government won't).

And Congressman don't read bills.

Trust me, this isn't going to be as bad as it sounds. What I find weird is every democrat is saying "dire, dire, dire" and every conservative is saying "just a small decline, small, only small." If you tell the people anything, yes anything, they will believe who has higher authority, if you can get someone to believe that you are going to fix the economy, they will stand behind you until the power shifts.
I have had this happen to me, just minor skills instruction though, I had the higher authority, so i taught them the right way- but when they were taught later that night by someone higher than me they believed them even though i had the right way and the second teacher had it wrong.

Japan. Decade long slump / recession. Now imagine that on a global scale. Now make it worse because there cannot be a current account surplus in the economy. That's whats got economists worried.

@brad, I mean the physical cold, hard, cash. Where did it go? You can lend 300,000 in pennies, but it's lent in credit with "backup"

The backup wasn't physical money, it was assets. Mortgages, loans, etc. When people start defaulting, and the assets those loans are secured on (ie: houses) go down in value, then the "backup" disappears in terms of monetary value.

 

[Dwood]

Why a free market will work:

It automatically puts the risk takers and those who work hard at their businesses at the top. The people who should be there.

Notice how few companies from major corporations that have existed for 60+ years need bail-outs. It's funny to me.

I think that everyone should have seen this coming.

A person who made it off rich before the Great Depression was asked something similar to the following:

"How did you know this was going to happen?" (Interviewer)

And the rich man replied, "I was sitting down, letting a youth shine my shoes and he was telling me about all the stocks he had purchased. I knew right then that I had to get out."

^ Not exact, but you get the jist.

In a Free Market economy like ours you should probably understand the causes to judge.

#1. As Long as Credit exists, the Financial Downturns will only grow greater.
If you take a look and compare what aspects this downturn has compared to the Great Depression this is by far the greatest similarity. People were able to buy stocks before the Great D with only 15% of the actual cost of the stock. Imagine what would happen if you could purchase a stock with only 15% down.

Think about what would happen to stock like Google's if we could buy it with only 15% down.

This recession had a precursor. The 2000/1 economic bubble burst. All those persons buying stocks in tech companies got a reality check.
Then, if you would also notice that this recession had another precursor. People were buying houses with no and/or little credit. You didn't even have to prove how much you earned. If you talked to the bank exec you just told him how much you "made".
Also, even if you only made some 50,000 dollars/year you could buy a $600,000 home (in the area I live in) with an insignificant downpayment.

#2. As long as we are off the Gold standard, our money worth is as follows:
The greatest determiner of the worth of any legal tender not backed by gold is how much of that specific tender is in circulation
Also, how many of that tender exist compared to other countries.
Let's say our government is a family. (like that one anime thing)

We are the children, and our parents (Government and Free Market) are getting a divorce, mostly because the Government can no longer stand the punishment the Free Market gives to children who are unruly. Halfway through the divorce most of the kids find that under Government life is droll, and boring. Government is always telling people what to do and saying how much they can have. Free Market will never change and Government will change, because government wants only the kids to be happy. It doesn't care about the lessons the Free Market teaches or anything, it just wants the kids to not complain. So they get together again but when they get together again Government says that things will need to change or else they will get a divorce and (never said but implied) Government's secret lover, socialism will take over.

I won't TL DR it because that info will help everyone out in the long run.

 

[Dreadnought[dA]]

Why a free market wont work, because Vista sucks and Microsoft legally doesn't have a monopoly. (Apples 3% is clearly competitive)

 

[Dwood]

Japan. Decade long slump / recession. Now imagine that on a global scale. Now make it worse because there cannot be a current account surplus in the economy. That's whats got economists worried.

Japan? Japan's reasons for a downturn are completely different than any other country outside of the EU.

Japan's population Pyramid is upside down. They have more old people than they do young-uns.

Why? Mainly because Japan never had a 'baby boomer' generation boom like everywhere else did after WW2.

They are an example of what is going to happen to Russia and France if things don't turn around population-replacement-wise.

 

[3rgytr54]

It automatically puts the risk takers and those who work hard at their businesses at the top. The people who should be there.

Well, you said it. If you earn over 250,000 a year you do own it, tax increase for them doesn't make 100% sense.

A person who made it off rich before the Great Depression was asked something similar to the following:

"How did you know this was going to happen?" (Interviewer)

And the rich man replied, "I was sitting down, letting a youth shine my shoes and he was telling me about all the stocks he had purchased. I knew right then that I had to get out."

^ Not exact, but you get the jist.

In a Free Market economy like ours you should probably understand the causes to judge.

I get what your saying, i never thought to compare it to the Great Depression's stocks to loans. It is scary.

Notice how few companies from major corporations that have existed for 60+ years need bail-outs. It's funny to me.

I think that everyone should have seen this coming.

Yeah we should've, but the economists didn't, nor did the government. But there ARE lending firms out there that boast 120+ years in the business and they don't seem to be falling under- Its values and morals, values and morals make the world go to war and come to peace.

And Congressman don't read bills.

Correct! they just add stuff to the end that is unnecessary spending. My biology class came to the conclusion that an earth worm's ganglia is roughly the size of a politician's brain.

EDIT: oh yeah its "Congressmen", unless you were trying to joke on politician stupidity. Or just mistyped.

 

[Captain Griffen]

Japan? Japan's reasons for a downturn are completely different than any other country outside of the EU.

Japan's population Pyramid is upside down. They have more old people than they do young-uns.

Why? Mainly because Japan never had a 'baby boomer' generation boom like everywhere else did after WW2.

They are an example of what is going to happen to Russia and France if things don't turn around population-replacement-wise.

Is there any evidence for your assertions, or should I just take your word for it over economics tutors and fellows?

Japan's massive savings ratio combined with very low expectations was the problem. When you have nominal interest rates going to zero, and still excess savings, you know you've got a big problem with liquidity.

If Japan's population problem was the cause, they wouldn't have started to come out of it, as that problem hasn't gone away.

Yeah we should've, but the economists didn't, nor did the government. But there ARE lending firms out there that boast 120+ years in the business and they don't seem to be falling under- Its values and morals, values and morals make the world go to war and come to peace.

Lots of economists did. They'd been warning of excessive lending for a few years. Just it makes short term rational sense for the individuals involved to take massive risks. And since the government is controlled by these same business men...

 

[3rgytr54]

I mean, the ones that the government will listen too.

 

[Captain Griffen]

I mean, the ones that the government will listen too.

That's the problem of governments being dominated by short term interests and business men and an electorate, all of whom care primarily about the short term.

 

[Dwood]

Is there any evidence for your assertions, or should I just take your word for it over economics tutors and fellows?

Lots of economists did. They'd been warning of excessive lending for a few years. Just it makes short term rational sense for the individuals involved to take massive risks. And since the government is controlled by these same business men...

Government? Business like? In my dreams. Government would spend half the money they did if, say the government was run by the owners + employee of Target.

And yes there is evidence

Statistics Bureau Home Page/Chapter 2  Population

BBC NEWS | Asia-Pacific | Japan sounds alarm on birth rate

Low birth rate prompts Spain to approve child bonus - International Herald Tribune

Population Decline in Russia

YouTube - Demographic Winter Trailer

 

[Captain Griffen]

Government? Business like? In my dreams. Government would spend half the money they did if, say the government was run by the owners + employee of Target.

Controlled by != run by. Controlled by businessmen != business like. Bush controls the army; he doesn't administrate it or deal with the details (thank god...).

And yes there is evidence

Statistics Bureau Home Page/Chapter 2**Population

BBC NEWS | Asia-Pacific | Japan sounds alarm on birth rate

Low birth rate prompts Spain to approve child bonus - International Herald Tribune

Population Decline in Russia

YouTube - Demographic Winter Trailer

None of that is evidence for your argument being valid, only for the premise that there is a population problem. It does not follow from that that that is the cause of Japan's decade of slow/negative economic growth.

 

[Dwood]

None of that is evidence for your argument being valid, only for the premise that there is a population problem. It does not follow from that that that is the cause of Japan's decade of slow/negative economic growth.

Well it's kind of obvious. I figured you would know the bad things from more old people than young...

Demographic Winter - the decline of the human family

Go to the Q&A section.

 

[Captain Griffen]

Well it's kind of obvious. I figured you would know the bad things from more old people than young...

Demographic Winter - the decline of the human family

Go to the Q&A section.

There are issues with it. But not of the kind to cause the slump observed in Japan. Actually, aging population is likely to cause not a demand deficit, but a demand excess, as pensioners consume more than they produce.

Really, boy, why are you asserting random shit, not even arguing it, against someone who you even admit knows more about the subject than you...?