Comments on: Fat Years and Lean: Keynsian Fiscal Policy Explained for Religious Conservatives http://www.nonesoblind.org/blog/?p=5604 Thu, 09 Sep 2010 18:37:12 +0000 hourly 1 http://wordpress.org/?v=3.0 By: David R http://www.nonesoblind.org/blog/?p=5604&cpage=1#comment-385447 David R Sat, 30 Jan 2010 01:53:20 +0000 http://www.nonesoblind.org/blog/?p=5604#comment-385447 That is a great account of Wisdom and Divine operation. The disturbing reality of the moment is a seeming absence of wisdom and the other-worldly influence seems to be from the Opposite Region. That is a great account of Wisdom and Divine operation.

The disturbing reality of the moment is a seeming absence of wisdom and the other-worldly influence seems to be from the Opposite Region.

]]> By: Andrew Bard Schmookler http://www.nonesoblind.org/blog/?p=5604&cpage=1#comment-385424 Andrew Bard Schmookler Fri, 29 Jan 2010 23:46:06 +0000 http://www.nonesoblind.org/blog/?p=5604#comment-385424 <blockquote>As I understand it, hasn’t the fundamentally baseless fractional reserve fiat money system allowed the government, in conjunction with the Fed, to essentially create a “surplus” in the graineries out of thin air?</blockquote> That's not a real surplus, and is not at all what Pharoah did. The idea is for the government to lean against the business cycle in BOTH directions, thus dampening the swings, which includes spending less and taxing more in fat times-- both to build up the "graineries" AND to keep the economy from overheating. (Don't forget, a propos of "overheating," the root of this whole economic mess was a BUBBLE.) Just printing money --or otherwise increasing the money supply-- DOES NOT SOLVE THE PROBLEM OF INSUFFICIENT DEMAND. We've got interest rates set at about zero, but that doesn't make businesses feel like investing or consumers feel like spending, if they're scared that they're going to go belly-up. Monetary policy in these situations fails to work in a way that's been described as "pushing on a string."

As I understand it, hasn’t the fundamentally baseless fractional reserve fiat money system allowed the government, in conjunction with the Fed, to essentially create a “surplus” in the graineries out of thin air?

That’s not a real surplus, and is not at all what Pharoah did. The idea is for the government to lean against the business cycle in BOTH directions, thus dampening the swings, which includes spending less and taxing more in fat times– both to build up the “graineries” AND to keep the economy from overheating. (Don’t forget, a propos of “overheating,” the root of this whole economic mess was a BUBBLE.)

Just printing money –or otherwise increasing the money supply– DOES NOT SOLVE THE PROBLEM OF INSUFFICIENT DEMAND. We’ve got interest rates set at about zero, but that doesn’t make businesses feel like investing or consumers feel like spending, if they’re scared that they’re going to go belly-up. Monetary policy in these situations fails to work in a way that’s been described as “pushing on a string.”

]]> By: mczilla http://www.nonesoblind.org/blog/?p=5604&cpage=1#comment-385420 mczilla Fri, 29 Jan 2010 23:08:07 +0000 http://www.nonesoblind.org/blog/?p=5604#comment-385420 Considering what is actually going on with climate change, crop failures, and greatly diminished global grain reserves, that's an interesting choice of analogies. But back to economics. As I understand it, hasn't the fundamentally baseless fractional reserve fiat money system allowed the government, in conjunction with the Fed, to essentially create a "surplus" in the graineries out of thin air? And hasn't much of this "food" for the economy been used by the too-big-to-fail institutions to go on with the buy-outs and derivatives games, rather than get the truly productive sector into gear? So far, the proposition that ten or twelve trillion dollars can buy you 4,000 dow points has been amply demonstrated, but most ordinary citizens continue to feel ever more pinched and desperate. It all sounds good in theory, but something isn't working as planned. Or maybe it is. Considering what is actually going on with climate change, crop failures, and greatly diminished global grain reserves, that’s an interesting choice of analogies. But back to economics. As I understand it, hasn’t the fundamentally baseless fractional reserve fiat money system allowed the government, in conjunction with the Fed, to essentially create a “surplus” in the graineries out of thin air? And hasn’t much of this “food” for the economy been used by the too-big-to-fail institutions to go on with the buy-outs and derivatives games, rather than get the truly productive sector into gear? So far, the proposition that ten or twelve trillion dollars can buy you 4,000 dow points has been amply demonstrated, but most ordinary citizens continue to feel ever more pinched and desperate. It all sounds good in theory, but something isn’t working as planned. Or maybe it is.

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