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Discussion Starter #1
The solution to these problems is simple SPEND MONEY on a Federal level. Keynes rightly pointed out that saving isn’t going to cure an economic downturn.... The key is to spend money like your have never seen before. It has to directly put into the powerhouse of America the small and medium businesses and the general consumers. This is the only way to fix it.
 

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What the hell, I have nothing better to do.

So, this $35 trillion you want to spend. Just how does it ever get repaid? Since it's all borrowed money anyway, what happens when other countries (like China), decide they dont want to give us more cash since the interest we are paying from our taxes is already maxing us out?
 

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Discussion Starter #3 (Edited)
I am not supporting any plan of action. I am only clearing up some misconceptions of how money works. And I really didn’t write about any economic plans. I know way better then to break my lurker status because it’s a lost cause. But in the second part of my response I will talk about it.

The money isn’t burrowed. The money is created. Congress issues an order to the Treasury/Fed to create X number of trillions for spending. in my system they would extend the federal loaning window as they call it usually reserved for bank to bank loans to all banks. Then each bank would give every business they have unlimited over draft capabilities: they would write payroll, monthly mortgage/rent , and maintenance to name a few go into the red only to have those numbers erased each morning with money when the bank is credited by the Fed.

What China owns are our treasury bills. Those actually are assets to China since we can never default or run out of money. They buy them in Dollars and we pay a small amount interest on it in the future. The fact is interest is not an issue for the government at all. Inflation and deflation are our biggest enemies. We sell treasury bills to pull money out of the economy to make sure you don’t have too much money chasing after too few resources in the economy.

The first thing everyone needs to do is runaway from the idea that your private household budget looks like or has any of the mechanisms in it that a Federal Budget with a fiat currency has. First off we never burrow money because no one else can issue the dollars. Just the Treasury and the Fed Can create real dollars. And in a very special way Banks create imaginary dollars... I call them that because in 2008 we say the Bank system creating more imaginary money basically in the same fashion as the Fed just minus one thing— when they hit a burrowing limit or cannot support a certain level of credit the system shuts down. The Fed is unlimited and this why in the last month you’ve seen the Fed make available over $3 trillion in short term loans and asset swaps to banks. This is so banks can safely maintain their leveraging levels. The leverage levels which 10:1 are now unlimited because the banks are directly using Fed funds to keep the credit market liquid. So, the first thing the Federal Budget does is make money out of thin air. Something no household can do.

Secondly, the Federal Budget can adjust how much of this money is taken back. One way are taxes which sadly pay for nothing. First we spend, then we tax. Taxes only keep inflation down and insure people want our money because it buys things in our economy. The big pay for it myth is this: Government spends $10 trillion on project X and takes out $3.5 trillion in additional taxes. The conventional understanding is the $3.5 trillion of the project’s cost is paid for. It is not all $10 trillion is paid. The deficit of $6.5 trillion represents an investment in the economy in the form of new employees, new business spending and personal spending. And so on. If we taxed all $10 trillion back the government still wouldn‘t paid for the project instead it would have removed $6.5 trillion x the government spending multiplier of 1.5-2 and thus contracted the economy by up to $13 trillion dollars. The exact opposite of the goal in question.

the next way government treasury bills— a great way to temporarily remove money from the system while giving people or governments and added boost at the end in the form of interest. Again foreign governments cannot issue them and we can control interest, maturity rates and supply. These are never going to bankrupt us or damage us. In fact if we need to we just buy back these assets and in essence merely trade one form of dollar for another. In fact the Fed bought back $500 billion already to stabilize the t-Bill market and to supply extra liquidity to the system.

Again the household budget cannot buy and sell its own debt for its own gain.

Finally, let’s talk about the poor fool that Thought it would be fun to talk to you people about economics. I tried once never again. His plan is bold and big. I like that part. I just wonder if $35 trillion is enough if we see substantial reductions in imports and exports around the world. From what little he described the plan was a classic Big Projects plan coupled to the idea of direct Relief that would turn into demand based stimulus. That will work. People with extra money and low debit will spend money on big capital , luxury, and durable goods. A plan as big as the one he is putting forth might actually be the only way to jumpstart the economy again. You lost close to $11 trillion in value in one week. We are going to be shut up for 6-8 months operating on a skeleton crew and that’s going to increase unemployment, medical debt, and of course 6-8 months of auto, student, rent and mortgage being stopped but not paid means a debt Market crash. Which will only lead to a housing Crash. Then a rental home crash. finally an auto crash, this is coupled to A massive bankruptcy spike and unemployment equals an economy further plunged into depression. This guys plan would stop that. I just don’t know if it is big enough now.
 

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Discussion Starter #6
175,000 laid off from Kohl’s ...
325,00 Macy’s...

the retail store Holocaust is upon us.
 

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Discussion Starter #8
6.6 million more unemployed anyone else think it might be time to think bigger than $2.2trillion?
 

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Discussion Starter #11
If you Ajslawnsnow believe that $2.5 trillion is going to fix this crisis you’re understanding of the issues needs to be expanded upon. We need to increase demand at then of this.
 

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Discussion Starter #13
Be still my heart— I‘m reading a positive statement potentially on PS about Socialism... I think Friedman’s ghost just cried a little...
 

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Discussion Starter #18
With supposedly half of all Americans on some form of "quarantine", I'm surprised that only 1 in 20 is "unemployed"

Just goes to show that all the "non-essential" business don't amount to much apparently
Well, you are forgetting that many jobs can be achieved while working home— see television news, lawyers, CPAs, journalists, economists, many investment jobs, engineers to some degree, data analysts, etc and so on. So, this 16 million unemployed represents a large group of people and will rise it doesn’t represent the entire economy. But, as demand crashes you won’t be able to keep all the rest who are working from home employed.

Economies don’t have islands...
 

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But that 16 million figure is largely meaningless to anyone except news broadcasters. The only reason most of them are out of work has nothing to do with the economy but rather the artificial shutdown imposed by governors/mayors. The jobs are still there with business owners eager to higher people back - if only they'd be allowed to. That doesnt stop the news from being "shocked" at "record #s filing for unemployment" - well, no s--t.

Mind you, I'm not saying I disagree with the shutdowns - on the contrary, i think the # of "essential" businesses has made the shutdowns mostly useless
 

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Discussion Starter #20
But that 16 million figure is largely meaningless to anyone except news broadcasters. The only reason most of them are out of work has nothing to do with the economy but rather the artificial shutdown imposed by governors/mayors. The jobs are still there with business owners eager to higher people back - if only they'd be allowed to. That doesnt stop the news from being "shocked" at "record #s filing for unemployment" - well, no s--t.

Mind you, I'm not saying I disagree with the shutdowns - on the contrary, i think the # of "essential" businesses has made the shutdowns mostly useless
You are going to see a lot bankruptcies in this process from small retail and restaurants to large scale retail. You will see a lot of restructuring retail that has strong web based customers might completely drop brick and mortar stores for lower cost Web based solutions. So, then you will see thousands still unemployed. the next are under employed people that work 60 hrs plus with a part time and full time job will only get unemployment for the full time job. Leaving this group deep in debt. Then Rising healthcare costs in the aftermath will only further reduce people’s disposable income. This will hit employer based programs hard with companies forcing employees to chip in more. Finally you have the fact large businesses will use this excuse to trim the fat in middle management and hourly employee by the use of automation, reduce the salaries of middle management, and ultimately attack union contracts. So, when we come out of the pandemic don’t think people are going on a buying spree.

Large ticket durable goods will be hard. Not to mention service based companies. People will try to reduce costs and that means a drop in demand and therefore prices and supply. I wouldn’t be surprised if many snow plow guys get out of it after this year when people try to renegotiate contracts lower or to per event pricing with higher triggers.
 
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