Originally posted by dryhumpThe policies of this administration and this Congress are not here to educate people. Like all government bodies, they are here to pass laws and run our government. It seems to me that you disagree with the way the current administration and current congress is taking our country, well...sorry about that. America tried it the other way for 8 years, and we're seeing the economic results. The current administration is simply trying to fix it. 😏
Can you explain how the policies of the current congress and administration are going to help people learn any of these lessons?
Originally posted by bill718You mean like the last Great Depression?
Today's economy is pretty grim. Now, maybe people will learn not to try to live over there heads financially, maybe people will begin saving more, maybe lenders will be more selective who they lend to, maybe lending standards will be improved, maybe the latest "must have" electronic gadgets will be evaluated more closely before they are actually purchased, m ...[text shortened]... l is better than simply aquiring more posessions. Perhaps some good will come from this...😏
Ha, ha, ha.... 😛
Originally posted by bill718That's a good set of hopes. While not all folks will get this message, more than used to get it surely are doing so. So, at least, some significant part of the population will have a trial by fire and come out with better values and practices.
Today's economy is pretty grim. Now, maybe people will learn not to try to live over there heads financially, maybe people will begin saving more, maybe lenders will be more selective who they lend to, maybe lending standards will be improved, maybe the latest "must have" electronic gadgets will be evaluated more closely before they are actually purchased, m ...[text shortened]... l is better than simply aquiring more posessions. Perhaps some good will come from this...😏
Teaching financial literacy early and in the schools in place of some other things one could name seems a good idea. Maybe that one will finally take hold.
Originally posted by Metal BrainNot sure I agree with that. Surely, Bernanke's and Greenspan's policies of running the printing presses faster to "solve" economic problems is bound to fail, but the European Central Bank has a mandate to keep inflation under control and it seems to work alright. Deflation makes it harder for investors to acquire capital.
No, it doesn't make the case for mild deflation. I just wanted to show inflation is a tax.
High inflation, low inflation, it is all a tax. It is just a matter of how much people are being taxed. Because the US dollar is world reserve currency the US can tax beyond it's own population. That is why it is so important to the USA that all transactions fo ...[text shortened]... come from higher productivity. People don't realize they are missing wealth they never see.
Originally posted by WajomaI realize that you cannot seem to grasp that humans live in societies. My post is sufficiently clear to those that understand that obvious fact.
I am not an employer so I don't 'have' these people you speak of.
Who are these, that you speak of when you say "your people" and what claim do you have on them?
Originally posted by KazetNagorraI don't disagree with that.
Not sure I agree with that. Surely, Bernanke's and Greenspan's policies of running the printing presses faster to "solve" economic problems is bound to fail, but the European Central Bank has a mandate to keep inflation under control and it seems to work alright. Deflation makes it harder for investors to acquire capital.
Inflation makes borrowing money more expensive because of the "Fisher Effect" as well. I still don't see why people believe mild inflation is a good thing. Central banks talk as if they are fighting inflation, yet the "Quantity Equation" seems to show they are responsible for creating the inflation.
Can we agree that 0% is a good goal?
Originally posted by bill718Please don't cast the last eight years stone here. Bush was anything but a fiscal conservative. I don't understand why you think saving money is good for an individual or a family, but not good for the government. You seem to be saying that people shouldn't spend more than they have, but the government should spend with reckless abandon.
The policies of this administration and this Congress are not here to educate people. Like all government bodies, they are here to pass laws and run our government. It seems to me that you disagree with the way the current administration and current congress is taking our country, well...sorry about that. America tried it the other way for 8 years, and we're seeing the economic results. The current administration is simply trying to fix it. 😏
the reason why there needs to be mild inflation is because businesses are reluctant to reduce prices and workers are reluctant to accept reduced wages.
the "money supply" is actually a flow of currency -- a given dollar is continually changing hands as people sell/buy goods and services to each other. If the amount of such transactions increases, the money flow will increase - and if these transactions decrease, the money flow will decrease.
if the flow of money is reduced, the prices of everything must be reduced accordingly - if everyone is willing to do this, economic output and employment would remain the same - it would be as if the nation agreed to move the decimal point back one place - so that $1.00 was now $0.10 - everything would be the same but prices would be only 1/10 what they were. You'd have had a 90% rate of deflation with no ill effects.
The problem is that when money flow is reduced, there's a lot of resistance to reducing prices, so you will get a lot of layoffs and production cutbacks instead - unemployment rises, markets tank, and the economy goes through a nasty recession until prices are forced downward and a new equilibrium can be reached.
if you have a continual state of low level inflation, the money supply is continually rising, so an ebb the money flow doesn't lead to deflation but just a reduced level of inflation. Prices don't need to drop, they need only rise more slowly. Businesses and workers are much more willing to accept this and an equilibrium can be reached without a major recession.
Originally posted by MelanerpesWorkers already accept lower wages if you adjust it to inflation.
the reason why there needs to be mild inflation is because businesses are reluctant to reduce prices and workers are reluctant to accept reduced wages.
the "money supply" is actually a flow of currency -- a given dollar is continually changing hands as people sell/buy goods and services to each other. If the amount of such transactions increases, the ...[text shortened]... h more willing to accept this and an equilibrium can be reached without a major recession.
A 90% deflation rate is unquestionably horrible for the economy. I am talking about a slight rate of deflation. Under 1% and closer to 0% when possible.
My point is that if deflation is mild (under 1😵 it would be no big deal. Inflation has its downsides too. I could give you an example of hyperinflation the way you gave an example of hyperdeflation but that is not what either of us is talking about here.
0% inflation is healthy. The only reason your central bank does not say so is because you would hold them to that standard and try to deny them the ability to tax you with inflation. No amount of inflation is healthy, it is a tax. It slows economic growth and it discourages the savings of money.