Economic security and Atheism+

The main forum for discussing social justice and the "plus" part of Atheism Plus.

Re: Economic security and Atheism+

Postby TheGillotine » Fri Aug 31, 2012 2:24 am

What the hell, I guess I'll pull some numbers. You note the bloated defense budget:

Setar wrote:
TheGillotine wrote:How funny. You talk about citing sources, and then turn around and call me unreasonable without giving any numbers or calculations to back that up, just a scary "six figure cost for each grad!". How about the (if you're in the US) twelve-figure "national defense" budget? I don't see you waving your arms around about that; hell, I'd say we could just start cutting into that.


The total cost of higher education in 2002 was $289B. Link

That number is going to be significantly higher in the near future, and it would likely increase further if funded through public monopoly. So you complain about a 12-figure national defense budget while simultaneously advocating for a 12-figure upward wealth transfer.
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Re: Economic security and Atheism+

Postby Setar » Sat Sep 01, 2012 6:59 am

TheGillotine wrote:What the hell, I guess I'll pull some numbers. You note the bloated defense budget:

Setar wrote:
TheGillotine wrote:How funny. You talk about citing sources, and then turn around and call me unreasonable without giving any numbers or calculations to back that up, just a scary "six figure cost for each grad!". How about the (if you're in the US) twelve-figure "national defense" budget? I don't see you waving your arms around about that; hell, I'd say we could just start cutting into that.


The total cost of higher education in 2002 was $289B. Link

That number is going to be significantly higher in the near future,

Okay. So?

TheGillotine wrote:and it would likely increase further if funded through public monopoly.

[citation needed]

TheGillotine wrote:So you complain about a 12-figure national defense budget while simultaneously advocating for a 12-figure upward wealth transfer.

Yes. Upward wealth transfer. Because no poor people want to go to university, it's too good for them or something.

Are you trying to sound classist?
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Re: Economic security and Atheism+

Postby Setar » Sat Sep 01, 2012 7:08 am

TheGillotine wrote:[These sorts of knee-jerk responses are why people don't take your type seriously. It's not incumbent upon me (although, in a different medium, I would) to provide the economic evidence against your proposal. It is incumbent upon you to provide specific, well-defined, and economically feasible support for your proposals. Since you insist on labeling yourself as an atheist first, I'll go ahead and make the necessary comparison to your mode of thought and creationism. Wishful thinking, with no facts to bear, followed by demanding that critics provide proof against your assertions, red herrings, and sarcasm. You need to do better.

HAHAHAHAHAHAHAHAHA. Oh, that's rich. You liken me to a creationist, yet you just pulled the creationist line "I have evidence for creationism, but I'm not giving it to the likes of you."

If your characterizations of my proposal as solely being an upward wealth transfer (because as we all know poor people don't want to go to university) weren't already proof that you're speaking from a position of utterly massive privilege, the mere notion that you can act like you are above giving me the evidence in the first place because my proposal is somehow unworkable because of...the evidence you're refusing to show me. Now, isn't that convenient. I have to justify a system that you're saying doesn't work from the get-go, because of...the evidence you won't show me. So, for all I know, I could construct a nice, workable system and explain myself, and you could still dismiss it because of this invisible evidence that you say you have.


Take your hidden knowledge of Sophisticated Classism and shove it up your fucking ass.
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Re: Economic security and Atheism+

Postby 'Tis Himself » Sat Sep 01, 2012 8:42 am

I was wondering when the economic conservatives and economic progressives would start throwing mud at each other.

The major economic problem in the First World is inequality. Most First Worlders know this is a problem but they underestimate the extent of it and are confused about what to do about it. These confusions are having a ruinous effect on economic policy and politics. The one-percent in past generations knew there was no top of the pyramid without a solid base. Henry Ford, who was hardly a social or economic liberal, knew he had to pay his workers a decent wage so they could afford to buy his cars. Franklin Roosevelt, another one-percenter, saved the capitalist USA by spreading the wealth through taxation and social programs and by regulating capitalism itself. Roosevelt, influenced by John Maynard Keynes, was denounced by many capitalists for saving capitalism from the capitalists. Richard Nixon, another non-liberal, determined that social peace and economic stability could best be secured by investment in Medicare, Head Start, Social Security, and cleaning up the environment.

Unfortunately, too many one-percenters fail to understand the lessons of history. They think of purely short-term gratification for themselves and ignore any long-term consequences not only for the rest of society but even for themselves.
That looks good in practice but how does it shape up in theory?
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Re: Economic security and Atheism+

Postby Setar » Sat Sep 01, 2012 9:21 am

Thank you, 'Tis. Unfortunately, that doesn't help me understand what merit there is in what passes for current popular economic theory and arguments. Arguments that seem to boil down to "we have to gut social services because we don't have enough money for them anymore"*. Or what the hell is wrong with my proposal, which amounts to "GI Bill for everyone" in the same way that universal healthcare is Medicare for everyone (and it should be -- Canada's system, by the way, is two-tier because it has a provision for private operations).

(* - Okay, never taken an economics class. That is, however, the mantra that made me want to immediately drop political science. I wish I had.)
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Re: Economic security and Atheism+

Postby mmurray » Sat Sep 01, 2012 9:58 am

You might like to look at some of the work being done on equality like

http://en.wikipedia.org/wiki/The_Spirit ... _Do_Better

and

http://www.equalitytrust.org.uk

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Re: Economic security and Atheism+

Postby Sigmaleph » Sat Sep 01, 2012 6:48 pm

TheGillotine wrote:Be sure to stay skeptical on this. Citations to legitimate sources should be regular fare when discussing economics, as you would discussing a topic in a hard science. For instance, no tuition for college? Be feasible, you're talking a 6-figure cost for each college grad, shouldered by taxpayers. And note that you're essentially taking from working class people to benefit upper-middle to upper class people.

Does the existence of public university systems count as evidence for their feasibility?

Incidentally, for a few numbers: University of Buenos Aires (public university and generally considered the best in the country) has around 300.000 students and a yearly budget of around 2.400.000.000 pesos. That's ~8000 per student per year. So unless you assume the average student takes 12 years to graduate or drop out, that's not six figures. (That's before taking into account currency conversion).

As a further observation, upper-middle to upper class people tend towards the private universities rather than the public ones. Probably due to a mixture of choice of subjects and status signalling, but I have no hard evidence for that.

Edited because I found more up-to-date numbers
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Re: Economic security and Atheism+

Postby ElGatoCello » Sat Sep 01, 2012 7:44 pm

I'm issuing a general verbal (Written? Whatever.) warning to all involved in this thread. Please watch the tone of your posts when debating like this. We are all here united in purpose.

The Courtier's Reply implies intellectual bullying by referring to your opponent as unschooled in the topic. Telling people to shove their opinions up their ass is offensive. Neither of which will be tolerated on this forum.

Thank you! Follow the courteous rules of debate!
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Re: Economic security and Atheism+

Postby 'Tis Himself » Sat Sep 01, 2012 11:30 pm

Setar wrote:Thank you, 'Tis. Unfortunately, that doesn't help me understand what merit there is in what passes for current popular economic theory and arguments.


What would you like to know? I'll try to answer your questions but you need to ask them. Your GI Bill proposal would be expensive but I suspect it would be less than the US military budget.

Setar wrote:(* - Okay, never taken an economics class. That is, however, the mantra that made me want to immediately drop political science. I wish I had.)


I've taken too many. I had one professor who was fond of the quip: "That looks good in practice but how does it shape up in theory?"
That looks good in practice but how does it shape up in theory?
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Re: Economic security and Atheism+

Postby simpleflower » Sat Sep 01, 2012 11:36 pm

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Re: Economic security and Atheism+

Postby Warren Peace » Sun Sep 02, 2012 12:13 am

TheGillotine wrote:What the hell, I guess I'll pull some numbers.
The total cost of higher education in 2002 was $289B. Link

That number is going to be significantly higher in the near future, and it would likely increase further if funded through public monopoly. So you complain about a 12-figure national defense budget while simultaneously advocating for a 12-figure upward wealth transfer.

Looking solely at costs is worthless. One also has to look at the long term benefits for comparison. It's called cost/benefit analysis for a reason.

Your cost estimate assumes that the government simply picks up the tab for post secondary education as it exists now. Surely people can come up with processes which would be more efficient than the current hodge-podge.

There are countries with a lot less per capita wealth than the US which are doing it, so an off the cuff rejection of the idea based on 'we can't afford it' doesn't go very far.
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Re: Economic security and Atheism+

Postby Setar » Sun Sep 02, 2012 5:07 am

'Tis Himself wrote:
Setar wrote:Thank you, 'Tis. Unfortunately, that doesn't help me understand what merit there is in what passes for current popular economic theory and arguments.


What would you like to know? I'll try to answer your questions but you need to ask them. Your GI Bill proposal would be expensive but I suspect it would be less than the US military budget.

The topic that always seems to get me is the money supply. I don't know at all how to deal with neoliberal arguments about having to get money from somewhere, or why governments have to be subject to the same sort of rules as a private household or enterprise in terms of spending.

And from the other side, I've seen claims that since the 1970s there has been meddling at the international level that's effectively rigged the game and forced neoliberalism. It was something about governments somehow being convinced to take loans from private banks at their interest, rather than directly from their central bank (at least, in Canada this is claimed to be the case) at low/no interest because um something something creating new money inflation (I think, though I haven't heard a neoliberal argument about the money supply that doesn't boil down to that).

'Tis Himself wrote:
Setar wrote:(* - Okay, never taken an economics class. That is, however, the mantra that made me want to immediately drop political science. I wish I had.)


I've taken too many. I had one professor who was fond of the quip: "That looks good in practice but how does it shape up in theory?"

The first week of poli sci was chock full of "our population is aging and putting more strain on our social services, where are we going to get the money??? We have to make big changes and you might not be able to, erm, enjoy the same healthcare system you see now". I kept wondering why the government has to worry about money when it controls the damn Bank of Canada.

Oh. Instructor also, in the first day, told us outright that we don't have a class structure resembling feudalism, nope nope nope, our classes are tending towards a large middle class, and that's what happens because bell curves work like that (which, I guess, was code for "the market").
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Re: Economic security and Atheism+

Postby 'Tis Himself » Sun Sep 02, 2012 2:40 pm

Setar wrote:The topic that always seems to get me is the money supply. I don't know at all how to deal with neoliberal arguments about having to get money from somewhere, or why governments have to be subject to the same sort of rules as a private household or enterprise in terms of spending...And from the other side, I've seen claims that since the 1970s there has been meddling at the international level that's effectively rigged the game and forced neoliberalism. It was something about governments somehow being convinced to take loans from private banks at their interest, rather than directly from their central bank (at least, in Canada this is claimed to be the case) at low/no interest because um something something creating new money inflation (I think, though I haven't heard a neoliberal argument about the money supply that doesn't boil down to that).


I have a 487 page book which discusses this topic. Basically you're asking how does the government print more money without suffering massive inflation? I'm going to explain this using the US as an example (because I'm very familiar with the American system) but the rest of the First and Second Worlds work in basically the same way.

Governments print money. The central bank, i.e, Federal Reserve, Bank of Canada, Bank of England, etc., determines how much money is actually in circulation in the economy. Money printed by the Treasury is distributed to the twelve Federal Reserve banks around the country. The Treasury does not have any say on how much money actually gets injected into the economy, as monetary policy decisions are left up to the Federal Reserve.

Traditionally, the Fed has one tool for injecting new money into the economy, a tool known as “open market operations”.* To increase the nation’s money supply, the Fed buys US government bonds on the open market from commercial banks. Commercial banks invest some households’ savings into government bonds just like they invest some of our money into individuals and businesses by making loans and charging interest on those loans. Commercial banks will buy government bonds if the interest on them rises and will sell those bonds when the interest rate falls.

If the Fed want to increase the money supply to stimulate spending in the economy, it will announce an open market purchase of bonds. When the Fed buys bonds, the demand for bonds increases, raising their prices and lowering their effective interest rate. As the interest on government bonds falls as a result of the Fed’s open market operations, banks find them less desirable to hold onto as investments and therefore sell them to the Fed in exchange for, you guessed it, liquid money, fresh off the printing presses!

Remember, the money printed at the Treasury and held at the Fed was not part of the money supply, since it is out of reach of private borrowers. But as soon as the Fed buys bonds with that money, it is deposited into commercial banks’ excess reserves and is therefore now in the commercial banking system and therefore part of the money supply. So, “printing money” does not immediately increase the money supply since newly printed money only ends up in the Fed; only once the Fed has undertaken an expansionary monetary policy (an open market bond purchase) does the newly printed money enter the money supply.

Now, commercial banks have sold their illiquid assets (government bonds) to the Fed in exchange for liquid money. Banks now hold more excess reserves, most of which are kept on reserve at their regional Federal Reserve bank. Reserves held at the Fed do not earn interest for the banks, and therefore actually lose value over time as inflation erodes the purchasing power of these idle reserves. Banks, of course, want to invest these reserves to earn interest beyond the rate of inflation and thereby create earn them revenue. In order to attract new borrowers, commercial banks, whose reserves have increased following the Fed’s bond purchase, must offer borrowers a lower interest rate. The increase in the supply of money leads to a decrease in the “price” of money, i.e. the interest rates banks charge borrowers.

So here we see why an increase in the money supply leads to lower interest rates. With greater excess reserves, banks must lower the rate they charge each other (the federal funds rate) and thus the prime rate they charge their most credit-worthy borrowers and all other interest rates in the economy, in order to attract new borrowers and get their idle reserves out there earning interest for the bank.

Lower interest rates create an incentive for firms to invest in new capital since now more investment projects have an expected rate of return equal to or greater than the new lower interest rate. Additionally, the lower rates on savings discourages savings by households and thereby increases the level of household consumption. Households find it cheaper to borrow money to purchase durable goods like cars and it also becomes cheaper to buy new homes or undertake costly home improvements. So we begin to see investment and consumption rise across the economy as the increase in the money supply reduces borrowing costs and decreases the incentive to save. Aggregate demand has started to rise.

Additionally, the lower rate on US government bonds resulting from the Fed’s open market purchase reduces the incentive for foreign investors to save their money in US bonds and in US banks, which are now offering lower interest rates. Falling foreign demand for the dollar causes it to depreciate. A weaker dollar makes US exports more attractive to foreign consumers, so in addition to increased consumption and investment in the US, net exports begin to rise as well, further increasing aggregate demand.

Increasing the money supply (not so much by printing money rather because of the “easy money” policy of the Fed), leads to increased consumption, investment, and net exports, and therefore aggregate demand in the economy. The rising demand among domestic consumers, foreign consumers, and domestic producers for the nation’s output puts upward pressure on prices as the nation’s producers find it hard to keep up with the rising demand. Once consumers start to see prices rising, inflationary expectations will further increase the incentive to buy more now and save less, leading to even more household consumption.

Milton Friedman said that “inflation is always and everywhere a monetary phenomenon”. Controlling the rate of growth in the money supply, say the monetarists, will assure that the fluctuations in the business cycle will be mild and periods of dramatic inflation and deflation can be avoided. Stable money growth should lead to stable economic growth. But as soon as we start running the printing presses inflation will not be far behind. On the flip-side, contradictory monetary policies should in theory lead to the exact opposite of what I describe above and cause a deflation. If a central bank were to tighten the money supply too much, interest rates would rise, investment, consumption and net exports would fall, and falling prices would force firms to lay off workers, leading to high unemployment and an economic contraction.

I’ll leave you with one question to ponder (the answer to which would require a much longer post than this one). If Friedman was right, and increasing the money supply will always and everywhere lead to inflation, then how is it that the monetary base in the United States increased by 142% between 2008 and 2009, yet inflation declined over the same period and fell to as low as -2% in mid-2009? That’s right, the money supply more than doubled, yet the economy went into deflation. Was Friedman missing something in his calculation that monetary growth always leads to price level increases? In other words, is an open market purchase of bonds by the Fed all that is needed to stimulate demand during a recession? Perhaps Friedman, who died in 2006 before the US entered the Great Recession, would have to re-consider his famous quote if he could see the effect (or lack of effect) of America’s unprecedented monetary growth over the last few years.

*I say traditionally, because in the last few years the Fed has devised numerous new ways to inject liquidity into the economy, which I will not get into now.
That looks good in practice but how does it shape up in theory?
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Re: Economic security and Atheism+

Postby Andrew G. » Sun Sep 02, 2012 3:03 pm

A lot of the problem here is the confusion between the nominal economy (movement of money) and the real economy (hours worked, goods produced, services performed, etc.).

When it comes to supporting an aging population, the question is not "where do we get the money", but "where do we get the food, clothing, housing, medical services and other facilities needed by the elderly". Do we (and can we) produce or trade for enough of these goods in excess of the consumption of the working population to be able to support the retirees? If we do, then lack of money can only stop us from giving that support if we choose to let it.

The real issue with inflation, likewise, is that if the government tries to buy more goods from the private sector than the available capacity allows, then it will drive up prices, causing inflation. This implies that where there is available unused capacity in the private sector, then the government should be spending more, while if there is inflation, then the government should be spending less or taxing more (taxation reduces private sector demand thus freeing up capacity).

Another issue is the role of the financial sector. One analogy that can be made is that the useful function of a financial sector can be likened to the transportation sector: moving stuff (money in this case) around from people who have it to people who want it. An efficient transportation sector is one which is no larger than needed for moving the goods that need to be moved; the fact that physically moving stuff has a cost acts as a brake, making it less likely that the sector will become excessively large. The financial sector has no such constraints, and as a result has become an unrestrained parasite on the real economy; this could most usefully be addressed by a financial transactions tax.
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Re: Economic security and Atheism+

Postby 'Tis Himself » Sun Sep 02, 2012 3:25 pm

Setar wrote:The first week of poli sci was chock full of "our population is aging and putting more strain on our social services, where are we going to get the money??? We have to make big changes and you might not be able to, erm, enjoy the same healthcare system you see now". I kept wondering why the government has to worry about money when it controls the damn Bank of Canada.


Money is a social convention. Nothing, not gold, not silver, certainly not pieces of paper deliberately made difficult to duplicate, has intrinsic value. We say money has value because we say so. If we stop saying money has value then it doesn't. In Germany after World War I everyone (including the government) decided the Reichsmark was valueless and so it was. It took a lot of work by some very clever economists* to stabilize the German economy and restore confidence in the Reichsmark. It is not a matter of fantasy that similar things could happen today. The Euro came close to the edge quite recently and is still rather shaky. One of my major objections to the present day Republican party is they don't care about what effects their policies will have on either the national or world economies. It's idiotic but that's what happens when ideology takes precedence over reality.

Setar wrote:Oh. Instructor also, in the first day, told us outright that we don't have a class structure resembling feudalism, nope nope nope, our classes are tending towards a large middle class, and that's what happens because bell curves work like that (which, I guess, was code for "the market").


Strictly speaking the instructor was correct. We don't have a feudalistic social structure in the same way we don't have a feudalistic economy. Canada may be "ruled" by Lizzy II but Lizzy I wouldn't recognize the present Canadian political system. However, and this is a major however, the present middle class is being squeezed out of their position by the upper class and by corporations. A corporate feudalism is being shaped. We're starting to see a hereditary educational system being established. I'm not sanguine about the broad-based middle class shrinking and being replaced by a plutocratic system where the economic elite rule the rest of us.

*One of my economic heroes is Dr. Hjalmar Horace Greeley Schacht, who led the effort to bring 1920s Germany out of hyperinflation. He was the only person tried at the Nuremberg Trials who had also been in a concentration camp. He was acquitted.
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Re: Economic security and Atheism+

Postby Andrew G. » Sun Sep 02, 2012 3:55 pm

'Tis Himself wrote:I have a 487 page book which discusses this topic. Basically you're asking how does the government print more money without suffering massive inflation? I'm going to explain this using the US as an example (because I'm very familiar with the American system) but the rest of the First and Second Worlds work in basically the same way.


(long description snipped)

That's something like the "mainstream" neoliberal position / explanation; unfortunately it's pretty much entirely bullshit. You'll notice that your description makes a number of predictions; but if you compare them against what actually happens in the real world, do they pan out? No.

For example, banks never pay any significant attention to their reserve balances when deciding whether or not to make loans; the loans department doesn't talk to the reserves department. Loans are made based on expectation of profit; either by repayment of the loan with interest, or (as in the mortgage bubble) the ability to sell off the loan to someone else. Whether the bank has sufficient reserves to meet any fractional reserve requirement is determined later, with borrowing done on the interbank market if necessary (and from the central bank as a last resort). Note that in the absence of a fractional reserve requirement, the bank can make loans without any impact on reserves at all.

This explains why even driving government bond yields to almost zero (in fact negative in real terms) and pumping cash into reserve balances does not result in an explosion of bank lending.

Another respect in which the "conventional" description is wrong is that it draws a distinction between (base) money and government bond ownership which is largely false. Bond transactions with the central bank are analogous to moving money between a current account and a savings account, not to adding or removing money from the economy. Only government spending creates (net) money, and only taxation destroys it. This distinction between money and government bonds is largely a relic of gold-standard economics, where money was convertible to gold, or was restricted to some limit based on gold ownership, whereas bonds were not. A government which controls its own currency has the option of controlling interbank interest rates without ever issuing bonds, by paying a support rate on reserve balances (if the target interest rate is >0%) to set a lower bound, and setting the penalty rate (as is done now) to set an upper bound.
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Re: Economic security and Atheism+

Postby sgbm » Mon Sep 03, 2012 9:08 pm

'Tis Himself wrote:Governments print money. The central bank, i.e, Federal Reserve, Bank of Canada, Bank of England, etc., determines how much money is actually in circulation in the economy. Money printed by the Treasury is distributed to the twelve Federal Reserve banks around the country. The Treasury does not have any say on how much money actually gets injected into the economy, as monetary policy decisions are left up to the Federal Reserve.

Traditionally, the Fed has one tool for injecting new money into the economy, a tool known as “open market operations”.* To increase the nation’s money supply, the Fed buys US government bonds on the open market from commercial banks. Commercial banks invest some households’ savings into government bonds just like they invest some of our money into individuals and businesses by making loans and charging interest on those loans. Commercial banks will buy government bonds if the interest on them rises and will sell those bonds when the interest rate falls.

If the Fed want to increase the money supply to stimulate spending in the economy, it will announce an open market purchase of bonds. When the Fed buys bonds, the demand for bonds increases, raising their prices and lowering their effective interest rate. As the interest on government bonds falls as a result of the Fed’s open market operations, banks find them less desirable to hold onto as investments and therefore sell them to the Fed in exchange for, you guessed it, liquid money, fresh off the printing presses!

Remember, the money printed at the Treasury and held at the Fed was not part of the money supply, since it is out of reach of private borrowers. But as soon as the Fed buys bonds with that money, it is deposited into commercial banks’ excess reserves and is therefore now in the commercial banking system and therefore part of the money supply. So, “printing money” does not immediately increase the money supply since newly printed money only ends up in the Fed; only once the Fed has undertaken an expansionary monetary policy (an open market bond purchase) does the newly printed money enter the money supply.

Now, commercial banks have sold their illiquid assets (government bonds) to the Fed in exchange for liquid money. Banks now hold more excess reserves, most of which are kept on reserve at their regional Federal Reserve bank. Reserves held at the Fed do not earn interest for the banks, and therefore actually lose value over time as inflation erodes the purchasing power of these idle reserves. Banks, of course, want to invest these reserves to earn interest beyond the rate of inflation and thereby create earn them revenue. In order to attract new borrowers, commercial banks, whose reserves have increased following the Fed’s bond purchase, must offer borrowers a lower interest rate. The increase in the supply of money leads to a decrease in the “price” of money, i.e. the interest rates banks charge borrowers.

So here we see why an increase in the money supply leads to lower interest rates. With greater excess reserves, banks must lower the rate they charge each other (the federal funds rate) and thus the prime rate they charge their most credit-worthy borrowers and all other interest rates in the economy, in order to attract new borrowers and get their idle reserves out there earning interest for the bank.

Lower interest rates create an incentive for firms to invest in new capital since now more investment projects have an expected rate of return equal to or greater than the new lower interest rate. Additionally, the lower rates on savings discourages savings by households and thereby increases the level of household consumption. Households find it cheaper to borrow money to purchase durable goods like cars and it also becomes cheaper to buy new homes or undertake costly home improvements. So we begin to see investment and consumption rise across the economy as the increase in the money supply reduces borrowing costs and decreases the incentive to save. Aggregate demand has started to rise.

Additionally, the lower rate on US government bonds resulting from the Fed’s open market purchase reduces the incentive for foreign investors to save their money in US bonds and in US banks, which are now offering lower interest rates. Falling foreign demand for the dollar causes it to depreciate. A weaker dollar makes US exports more attractive to foreign consumers, so in addition to increased consumption and investment in the US, net exports begin to rise as well, further increasing aggregate demand.

Increasing the money supply (not so much by printing money rather because of the “easy money” policy of the Fed), leads to increased consumption, investment, and net exports, and therefore aggregate demand in the economy. The rising demand among domestic consumers, foreign consumers, and domestic producers for the nation’s output puts upward pressure on prices as the nation’s producers find it hard to keep up with the rising demand. Once consumers start to see prices rising, inflationary expectations will further increase the incentive to buy more now and save less, leading to even more household consumption.

Milton Friedman said that “inflation is always and everywhere a monetary phenomenon”. Controlling the rate of growth in the money supply, say the monetarists, will assure that the fluctuations in the business cycle will be mild and periods of dramatic inflation and deflation can be avoided. Stable money growth should lead to stable economic growth. But as soon as we start running the printing presses inflation will not be far behind. On the flip-side, contradictory monetary policies should in theory lead to the exact opposite of what I describe above and cause a deflation. If a central bank were to tighten the money supply too much, interest rates would rise, investment, consumption and net exports would fall, and falling prices would force firms to lay off workers, leading to high unemployment and an economic contraction.

I’ll leave you with one question to ponder (the answer to which would require a much longer post than this one). If Friedman was right, and increasing the money supply will always and everywhere lead to inflation, then how is it that the monetary base in the United States increased by 142% between 2008 and 2009, yet inflation declined over the same period and fell to as low as -2% in mid-2009? That’s right, the money supply more than doubled, yet the economy went into deflation. Was Friedman missing something in his calculation that monetary growth always leads to price level increases? In other words, is an open market purchase of bonds by the Fed all that is needed to stimulate demand during a recession? Perhaps Friedman, who died in 2006 before the US entered the Great Recession, would have to re-consider his famous quote if he could see the effect (or lack of effect) of America’s unprecedented monetary growth over the last few years.

*I say traditionally, because in the last few years the Fed has devised numerous new ways to inject liquidity into the economy, which I will not get into now.


This comment was plagiarized by 'Tis Himself from Jason Welker's blog post, “Why can’t the government just print more money?” – NOT such a silly question!
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Re: Economic security and Atheism+

Postby sgbm » Mon Sep 03, 2012 9:25 pm

'Tis Himself wrote:The one-percent in past generations knew there was no top of the pyramid without a solid base. Henry Ford, who was hardly a social or economic liberal, knew he had to pay his workers a decent wage so they could afford to buy his cars. Franklin Roosevelt, another one-percenter, saved the capitalist USA by spreading the wealth through taxation and social programs and by regulating capitalism itself. Roosevelt, influenced by John Maynard Keynes, was denounced by many capitalists for saving capitalism from the capitalists. Richard Nixon, another non-liberal, determined that social peace and economic stability could best be secured by investment in Medicare, Head Start, Social Security, and cleaning up the environment.


This comment was plagiarized by 'Tis Himself from Joseph Stiglitz's article in Vanity Fair, The 1 Percent’s Problem.
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Re: Economic security and Atheism+

Postby Flewellyn » Mon Sep 03, 2012 10:50 pm

sgbm wrote:This comment was plagiarized by 'Tis Himself from Joseph Stiglitz's article in Vanity Fair, The 1 Percent’s Problem.


Your first two posts here, and you do this?

DO you really feel this is a useful and beneficial contribution to the site?
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Re: Economic security and Atheism+

Postby sgbm » Mon Sep 03, 2012 10:54 pm

Yes?

If someone was using my website to break the law, I would appreciate knowing about it.

EDIT: additionally, people now have easy links to read the original articles by Welker and Stiglitz. I think that is useful and beneficial.
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Re: Economic security and Atheism+

Postby Setar » Mon Sep 03, 2012 11:57 pm

sgbm wrote:Yes?

If someone was using my website to break the law, I would appreciate knowing about it.

EDIT: additionally, people now have easy links to read the original articles by Welker and Stiglitz. I think that is useful and beneficial.

It's no secret that you and 'Tis have an ongoing disagreement, and your first action here is to go after 'Tis for plagiarism.

Seriously, That, at the very least, looks like you're taking out a vendetta. It's a good service, but you really might want to consider that tone arguments do have merit in a community setting. There's a difference between calling out a troll or random person and calling out an ally. Allies at least deserve the benefit of the doubt until they start spouting off crap. When you fail to give that initial credit (even just by softening your tone a bit to respect an ally as such), you are going to spark a hostile reaction because you're going to make the ally feel othered for what could be an honest mistake. That's not cool. Mistakes are mistakes.

(I know you seem to prefer to assume that everyone is a straw Vulcan and demand that standard, but I'm going to tell you right now that's a horrible thing to do. It's actually demanding to suppress one's emotions when one feels mistreated. Stop demanding it, and you'll find that a lot of these problems people have with you are going to disappear because you're going to be making them feel like you respect them as fallible people with emotions and mistakes, rather than looking down on them until they meet your nigh-impossible standard of never making mistakes.)
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Re: Economic security and Atheism+

Postby ceepolk » Tue Sep 04, 2012 12:07 am

Hey man, I don't know you, and this is crazy, but I tried searching terms that 'TisHimself used in the article you say he plagiarized, and...I didn't get a single match.

So...cite them, maybe?
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Re: Economic security and Atheism+

Postby sgbm » Tue Sep 04, 2012 12:11 am

Setar wrote:It's no secret that you and 'Tis have an ongoing disagreement, and your first action here is to go after 'Tis for plagiarism.


Yes, and? Anyway there probably would have been no action here on my part if I hadn't been reading the threads on economics and there had been no plagiarism in those threads. Seeing the plagiarism just spurred me to register an account.

Seriously, That, at the very least, looks like you're taking out a vendetta.


And providing helpful links.

It's a good service, but you really might want to consider that tone arguments do have merit in a community setting. There's a difference between calling out a troll or random person


Oh, do tell me just what is wrong with my tone in this sentence: 'This comment was plagiarized by 'Tis Himself from Jason Welker's blog post, “Why can’t the government just print more money?” – NOT such a silly question!'

and calling out an ally.


Don't ever presume to tell me who my allies are. I decide that for myself.

Allies at least deserve the benefit of the doubt until they start spouting off crap.


I'm giving everyone the benefit of the doubt here, just to be on the safe side.

When you fail to give that initial credit (even just by softening your tone a bit to respect an ally as such), you are going to spark a hostile reaction because you're going to make the ally feel othered for what could be an honest mistake. That's not cool. Mistakes are mistakes.


This isn't an honest mistake. Go read the links. This wasn't a copy and paste job without remembering to provide the link. It is an alteration of Welker's and Stiglitz's writing. Plagiarism.

(I know you seem to prefer to assume that everyone is a straw Vulcan and demand that standard, but I'm going to tell you right now that's a horrible thing to do. It's actually demanding to suppress one's emotions when one feels mistreated. Stop demanding it, and you'll find that a lot of these problems people have with you are going to disappear because you're going to be making them feel like you respect them as fallible people with emotions and mistakes, rather than looking down on them until they meet your nigh-impossible standard of never making mistakes.)


Since this is irrelevant to the this thread, I'll ignore it. You can drag your off-topic complaint (brimming with false claims) over to Thunderdome, or stop trying to make this personal here. I'm not interested in addressing, in this thread, your own vendetta against me.
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Re: Economic security and Atheism+

Postby sgbm » Tue Sep 04, 2012 12:15 am

ceepolk wrote:Hey man, I don't know you, and this is crazy, but I tried searching terms that 'TisHimself used in the article you say he plagiarized, and...I didn't get a single match.

So...cite them, maybe?


Sure, no problem. The reason you're not finding them immediately with Ctrl-F is because they aren't just copied and pasted. Here's the original bit from Stiglitz's article:

Joseph Stiglitz wrote:The 1 percent in generations past often knew better. They knew that there would be no top of the pyramid if there wasn’t a solid base—that their own position was precarious if society itself was unsound. Henry Ford, not remembered as one of history’s softies, understood that the best thing he could do for himself and his company was to pay his workers a decent wage, because he wanted them to work hard and he wanted them to be able to buy his cars. Franklin D. Roosevelt, a purebred patrician, understood that the only way to save an essentially capitalist America was not only to spread the wealth, through taxation and social programs, but to put restraints on capitalism itself, through regulation. Roosevelt and the economist John Maynard Keynes, while reviled by the capitalists, succeeded in saving capitalism from the capitalists. Richard Nixon, known to this day as a manipulative cynic, concluded that social peace and economic stability could best be secured by investment—and invest he did, heavily, in Medicare, Head Start, Social Security, and efforts to clean up the environment. Nixon even floated the idea of a guaranteed annual income.


Welker's is much longer, obviously, but you'll find the beginning of it by searching for:

Jason Welker wrote:In fact, it is the US treasury that prints money, but it is the Federal Reserve that determines how much money is actually in circulation in the economy.
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Re: Economic security and Atheism+

Postby ceepolk » Tue Sep 04, 2012 12:21 am

Thanks for tossing up a quote there, I appreciate that.
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