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Forum Post: You guys should be calling for more inflation

Posted 2 years ago on Oct. 10, 2011, 11:25 a.m. EST by ancillary (65)
This content is user submitted and not an official statement

More inflation = more employment (though reduced spending power) and a reduced real burden of debt such as student loans or home loans.

The populists in the late 19th century had it right when William Jennings Bryant delivered the "cross of gold" speech.

The only way out of debt is inflation, but the Republicans are ideologically hidebound and are actually threatening the Fed.

128 Comments

128 Comments


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[-] 1 points by jdee (2) 2 years ago

More inflation = more dollars in the economy = less purchasing power. More dollars in the economy means we pay more for EVERYTHING. So maybe we get paid a little more, but everything is worth more so we would be in the exact same situation. The only difference would be our currency is worth less in the international market.

I agree that the dollar is worthless, that's why it should be backed by a commodity, like gold. The FED has been increasing the money supply for years with no positive effect. What's worse is some people never get their hands on the new money in circulation, yet they have to deal with the increased prices. When the Fed does it's Quantum Easing do you really think the money is going to get to you quick enough to improve your life?

I would suggest listening to economist like Robert Murphy, also listen to some lectures by Thomas Woods, very informative.

[-] 1 points by unended (294) 2 years ago

This is correct. Although, technically it isn't inflation, because prices will not rise. The mechanism of introducing more money will, however, create demand and employment. Only once employment becomes full will actual inflation occur (and obviously spending should slow down at that point).

[-] 1 points by jdee (2) 2 years ago

Can you explain how what you have posted is possible? I just don't understand how you can have more money chasing the same amount of goods and no inflation.

Increased production comes from more than just more money floating around.

[-] 1 points by unended (294) 2 years ago

See if this helps, as it explains better than I could here: http://bilbo.economicoutlook.net/blog/?p=10554

"Inflation occurs when there is chronic excess demand relative to the real capacity of the economy to produce." We are nowhere near the "real capacity of the economy to produce."

[-] 1 points by ancillary (65) 2 years ago

ty.

[-] 1 points by VladimirIlyich (1) 2 years ago

"The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation. "

Vladimir Lenin

[-] 1 points by MaDTruthSeekeR (17) from New York, NY 2 years ago

Fuck the dollar. Money is an abstraction. It abstracts from true wealth which are the materials and resources all around us at all times. If we were to team up on the left and pool all our true resources together coupled with people of skills and knowledge of tools and craft, we would really be rich. People are constantly throwing their wealth away. A table that broke that you don't know how to fix, a computer that just needs a new hard drive. Etc...

Land is wealth! Resources are wealth! Skills are wealth! Health is wealth!

We need to have a contingency plan for if the dollar blows up completely! That is what we need!

[-] 1 points by MattLHolck (16833) from San Diego, CA 2 years ago

raise the minimum wage with the food and housing inflation index

[-] 1 points by ancillary (65) 2 years ago

Raising the min wage would put more people out of work. Sorry to say.

[-] 1 points by MattLHolck (16833) from San Diego, CA 2 years ago

then they'd be standing around looking for something to do

[-] 1 points by ancillary (65) 2 years ago

that is the definition of unemployment.

[-] 1 points by MattLHolck (16833) from San Diego, CA 2 years ago

they need food, shelter and health care

[-] 1 points by ancillary (65) 2 years ago

And how does an unemployed person get food and shelter when he cannot earn money?

[-] 1 points by MattLHolck (16833) from San Diego, CA 2 years ago

the food exist

the government could print money to run a distribution program

[-] 1 points by sluggy (49) 2 years ago

inflation punishes anyone with savings, it devalues those savings. why should people be punished so you can pay off your debt faster. Some people saved for a house and did not buy because they knew the housing market was overpriced. I guess you think its a great idea to steal their savings so your debts can be paid off faster.

[-] 1 points by technoviking (484) 2 years ago

a lot of people don't have savings. they have negative savings - the result of debt.

[-] 1 points by CuttheBS (143) 2 years ago

so punish those who didn't live beyond their means

[-] 1 points by ancillary (65) 2 years ago

Yes, that is a downside of inflation.

But the alternative is what we have right now: lots of people out of work and facing huge debts. How many people on OWS have student loan debts that they can't hope to repay?

[-] 1 points by quadrawack (280) 2 years ago

If you want us to look like Weimar Germany or modern day Zimbabwe or 1980's Brazil, sure, why not? After all inflation devastated the middle class there. Hell, the Fed already has us in a credit deflation currency inflation, so we get the most perverse of perverse. Shrinking wages, low yields, shrinking capital for business expansion, but more expensive gas, food, and necessities.

Are you nuts?

[-] 1 points by ancillary (65) 2 years ago

inflation would mean more capital for business expansion, because the higher prices you pay would go towards someone-- namely business. Who could then turn around and hire you.

[-] 1 points by quadrawack (280) 2 years ago

16 trillion was disbursed worldwide already by the Fed. The Fed pumped in a massive amount of money in the M1 figures in Dec of 08 and Jan of 09. They just did it again in August 2011.

And what do we have to show for it? Higher prices, liquidity traps, and now Europe is crumbling. China's first keynesian effort in 08-09 didn't work, other wise they wouldn't be announcing their second attempt this August.

And yet here we are.

Inflation doesn't work.

[-] 1 points by ancillary (65) 2 years ago

We don't have higher prices, however. That's the point. Milk is still the same $3.50 a gallon it was five years ago.

You do realize that milk is produced in America, right? If you had to pay $4.00 a gallon it would benefit the milk producer in Wisconsin and also the Americans working at the bottling plant and the grocery store.

[-] 1 points by quadrawack (280) 2 years ago

Hello, you have to look at when the stimulus pump got crazy. That's right after 2001. Compare prices during the 90's post volcker to today. 5 years means nothing. The housing BOOM was during the early 2000's, that was a MASSIVE amount of liquidity sloshing around right into housing and commodities. Just THREE years ago we got started into the subprime crisis, culminating in 08! Your time scale is WAY too small. We've been getting inflation since Nixon took us off the gold standard. But if you want a decent measure of inflation, just look at the usual suspects.

gold 2003 per ounce - 400

gold 2011 per ounce - 1600

silver 2003 per ounce - 7

silver 2011 per ounce - 30

What cost you 20 bucks in 1970's will cost you 123 today. What cost you 20 in 1913 will cost you around 453 today.

But if we just take the last ten years, you'll see this in the loss of the dollar's purchasing power

http://blogs.fxstreet.com/forexhedge/files/2011/02/usdpp.jpg

We really don't need more inflation. This is horrendous.

[-] 1 points by ancillary (65) 2 years ago

gold and silver? Those have been driven up because of Glenn Beck paranoid cases.

OIl is trading around $85 a barrel right now. That's far less than it did in 2007 when it almost hit $200 and it is close to the historical norm through the Bush years.

Steel is trading for roughly the same price as well.

[-] 1 points by quadrawack (280) 2 years ago

What inflation?!! Can you read a chart?

Here's an average yearly inflation chart http://www.gocurrency.com/img/inflation.JPG

And here's the dollar's purchasing power chart http://minefund.com/wordpress/wp-content/uploads/2011/03/wpid-purchasingpowerdollar001-2011-03-28-16-55.jpg

That's a very stark drop in the dollar's loss in purchasing power. Over 92%.

Course, since you advocate inflation as a solution, why not advocate we do away with cents then? The dollar can become the new penny.

[-] 1 points by quadrawack (280) 2 years ago

Of course that's one of the results of the financial crisis, during the crisis the Fed did some of the biggest liquidity injections of all time. End result? Inflation. End result? Things get more expensive. And fundamental demand has gone up with the addition of 2 BILLION people looking for other ways to store their earnings and guard against inflation in their own countries, who are themselves practicing keynesian models. China was congratulated for the BIGGEST stimulus, keynesian's here were praising as what we should have done. And yet this August they announced another one.

What's wrong? Didn't the first one work? Apparently not. And inflation is giving them problems.

I'll say it again, inflation doesn't work. Japan tried keynesian injections the last 15 years. No dice. We tried it. No dice. Europe's trying it. Good luck. China's trying it, and funny how they all just keep trying and trying and trying.

This is a pretty good commentary on it.

http://youtu.be/d0nERTFo-Sk

[-] 1 points by ancillary (65) 2 years ago

what inflation? There has been no inflation. Look at the price of milk, It's the same as it was five, ten years ago.

[-] 1 points by quadrawack (280) 2 years ago

No, gold and silver are driven up due to it being used as alternative currency, which about 2 billion people in China and India are doing.

http://www.businessweek.com/news/2011-04-15/gold-climbs-to-record-on-demand-for-alternative-to-currencies.html

And obviously, why would they turn to these metals as an alternative currency? Because the main reserve currency is bad money. It's debased. Through inflation, aka Quantitative easing, 16 trillion in loans, and massive M1 injections, whose velocities are hitting now.

You're essentially advocating that we should work for less purchasing power. That's the sum value of inflation. Thats' nuts.

[-] 1 points by ancillary (65) 2 years ago

that's a byproduct of a financial crisis, though. It's not about fundamental demand. You do realize that gold and silver have industrial uses, right? It's not like the demand for their industrial capacity has exploded.

[-] 1 points by jemcgloin (63) from Staten Island, NY 2 years ago

A temporary spike spending by the government can put people back to work and raise the GDP back to capacity, if it is large enough and used to actually create jobs, instead of tax cuts for the rich, which have been completely inefective. It can be paid for reasonably quickly be taxing the billionaires.
For all of you anti-Keynesians: WWII was a massive, accidental jobs program, which gave us the largest debt to GDP ratio in our history, cranked our economy up to unprecedented levels and which was easily paid for by taxing the biggest earners at a 90% tax rate, while we rebuilt Europe and Japan. The government can and does create jobs. China creates millions of jobs a year and we owe them a trillion dollars. The supply side myth should have been dead and buried two decades ago. We the People are going to drive a stake through it's heart any minute now. The real "job creators" are the people that buy stuff. Tax cuts for companies with no customers won't do anything. Cutting jobs, wages, and benefits, takes money out of the economy and lowers the tide, leaving all the boats stranded.

[-] 1 points by quadrawack (280) 2 years ago

This is the best response I've ever seen to your fallacy that World War two was a benefit to the economy.

http://youtu.be/GTQnarzmTOc

[-] 1 points by ancillary (65) 2 years ago

The Tea Party isn't entirely wrong though about government debt. It is massive and it might one day hit a tipping point.

Also, a one year spike in government spending will lead to one year worth of jobs. What is needed is a longer-term plan to restructure the economy for better growth, not just a bunch of temporary spikes in debt-fueled spending.

[-] 1 points by MossyOakMudslinger (106) from Frederick, MD 2 years ago

Yes that is an extremely important point.. ZIRP (Zero Interest Rate Policy) imposed by the Fed is a big part of the free money gift to the casinos that taxpayers subsidize. Its been in effect for the better part of 10 years and although it has greatly benefited the speculators (ie the looters) it has crushed the savings of the 99%. This is one of the principle injustices resulting from the Fed-banker-Wall Street crime nexus and OWS should make this one of their key points: REVOKE ZIRP

[-] 1 points by ancillary (65) 2 years ago

It has not crushed the savings of the 99%. That's the point. There has been zero inflation for the past 3 years since the 2008 collapse.

[-] 1 points by MossyOakMudslinger (106) from Frederick, MD 2 years ago

ancilliary1,

Please get a clue. Zero interest rates means that you have gained no money in last 7 years or so for any savings you may have. If you factor in CPI its negative interest rates for savers. That is killing savers. Banks have been getting some 3% on their money from the Fed. The saver has been denied that opportunity so that constitutes a loss to the saver over the time that ZIPR has been in effect that is directly pocketed by the banks.

ZIRP is form of bank bailout that the saver is subsidizing. I mean its not that complicated. ancilliary1 just think it through.

[-] 1 points by ancillary (65) 2 years ago

Bank accts typically paid only like 3% interest anyways.

I'm advocating a healthy 10-15% inflation rate for a few years.

[-] 1 points by MossyOakMudslinger (106) from Frederick, MD 2 years ago

I'm advocating a healthy 10-15% inflation rate for a few years.

Yes I agree although I don't claim to know what the exact rate would be, but we need some inflation now to get back what has been taken from savers through ZIRP.

"Bank accts typically paid only like 3% interest anyways. "

That was true in 2001 maybe but for many years it has been under 1%. Right now its like .25% (its tied to short term treasuries ) or less. The Fed supplies banks with interest free money (short term rate, what they give us the savers) they then go an buy long term treasuries at the 3% rate.

Here check this link its not long:

http://www.voxeu.org/index.php?q=node/6049

BTW, when I refer to inflation I mean an increase in the savings rate that banks offer (the short term treasury securities rate to give savers some relief).

Best wishes,

MossyOakMudslinger

[-] 1 points by ancillary (65) 2 years ago

we don't disagree on much. But my central point is that the savers are losing at worst 5%/yr. That's not that bad.

[-] 1 points by jeremycf5f (6) 2 years ago

yeah, because it's worked before right?

[-] 1 points by Dontbedaft (155) 2 years ago

Careful, with talk like that you might end up with a Nobel prize or be time man of the year, like Obama, hitler, krugman or Stalin.

[-] 1 points by zer0 (43) 2 years ago

More inflation? Inflation DEVALUES OUR MONEY. It is one of the things Occupy should be PROTESTING.

[-] 0 points by ancillary (65) 2 years ago

inflation benefits workers.

deflation benefits bankers.

that's the classic tradeoff.

[-] 2 points by Dontbedaft (155) 2 years ago

Inflation removes the.middle class

[-] 1 points by cmt (1195) from Tolland, CT 2 years ago

Inflation helped pay off my mortgage, because I got an 8.75% fixed rate during a period of high inflation. As bad as that sounds, my pay gradually caught up, so I could afford to make extra payments.

The best thing about owning a home is when you can pay it off and own it.

High inflation now, though, would really mess me up. Interesting idea, though.

[-] 1 points by ancillary (65) 2 years ago

you see, you guys have to realize that any way forward will have tradeoffs. Overall benefits of inflation to the OWS people would be higher than drawbacks.

[-] 1 points by zer0 (43) 2 years ago

Lol, is that your way of saying we have to accept the lesser of two evils? The Germans tried that, and they got Hitler. They miscalculated which was the lesser of the two.

[-] 3 points by ancillary (65) 2 years ago

Hitler analogies are always made by retards.

[-] 1 points by zer0 (43) 2 years ago

Inflation does not REALLLY benefit workers. It creates a larger gap between the rich and the poor. As Dontbedaft said it removes the middle class. Go look at some Austrian Economics, I.e. Economics instead of Keynesian. We're talking about a capitalist economy here. Inflation devalues currency, how the HECK does that help the workers? I have 5 dollars, I want to buy hamburger that cost three dollars tomorrow. Overnight they inflate the money and mcdonalds ups price to 6 dollars. That 'benefits' mcdonals NOT THE WORKER.

And at that the FED has BEEEEEN inflating our money for the past 40 years! and they've been especially doing it to prolong this economic crisis. Go look up Quantitative Easing 1 and 2. Inflation is putting more money into the market (like inflating a balloon) that devalues the money. How can devalued money help ANYONE? Now that is not to say that DEFLATION helps people EITHER. Japan has been screwed up from rapid DEFLATION. Inflation and Deflation are tools that are USED BY BANKERS WHO CONTROL OUR ECONOMIES.

[-] 1 points by ancillary (65) 2 years ago

McDonalds is one of the largest employers in the country, don't you realize? If McDonalds could charge more money, they could pay their workers more money, and those workers would have more to spend.

[-] 1 points by zer0 (43) 2 years ago

HAHAHAHAHA. And has the wage for any single McDonalds Employee risen since QE1 and QE2???? NO. The wages stay the same. The PRICES get higher because McDonalds has to buy its COMMODITIES for MORE. Your argument is outside the parameters of economics.

Money is what we use to BUY stuff. Inflation makes money worth LESS. That means that items are now worth MORE. For EVERYBODY. The Elite, The Middle Class and the poor. EVERYBODY. Also since we're the Reserve Currency of the World then that means EVERYBODY IN THE WORLD is affected. So if McDonalds has to run a business and make a profit in order to stay open then they have to buy all of the stuff they use to produce their products. Meats, potatoes, energy, etc. Now lets say the dollar is inflated, the price of all of those things go up, because they're now more valuable because the dollar is less valuable. Now that means McDonalds has to raise the prices on the products that it is in because it COSTS MORE TO MAKE IT. Why the HELL would they pay their workers more? Their workers are not going up in value unless minimum wage goes up. Your argument fails dude.

[-] 1 points by ancillary (65) 2 years ago

Inflation hasn't budged with QE1 and QE2. It's been zero despite them. It would probably be deflationary, in fact, without them.

[-] 1 points by zer0 (43) 2 years ago

=/ do you even know how the FED inflates money? The FED prints 600 Billion dollar notes. Then they buy assets from companies. Like Mortage Backed Securities. Those companies get more money. And the people get none. The people haven't gotten pay raises. The people haven't gotten cheaper commodities. They've only gotten a bunch of worthless dollars. You can't just inflate when there is a problem. That is much of what has gotten us into the mess we're in.

[-] 1 points by ancillary (65) 2 years ago

When the mortgage bubble burst, about 3 trillion dollars evaporated.

QE1 and QE2 have filled a fraction of that.

[-] 1 points by Dontbedaft (155) 2 years ago

Inflation benefits debtors, but if the money never existed, the bankers couldn't care less.

[-] 1 points by khewitt333 (35) from Brooklyn, NY 2 years ago

Inflation is when prices increase but wages do not. How do higher prices create jobs? How will higher prices improve the housing market? How will higher prices ease fears causing instability in the stock market or calm the global financial insecurity? In a time of high unemployment, people don't have the money to buy things, so higher prices will not prompt more buying, and so will not create jobs. The problem is not that prices are too low. If people had the money and opportunity right now, everyone would be buying houses because prices are dirt cheap! People do not have the money, they do not have the credit (banks aren't lending!) and they do not feel secure enough in their jobs to purchase houses. Inflation will not solve these problems. Perhaps higher wages is a better answer.

[-] 1 points by ancillary (65) 2 years ago

obviously high wages come from somewhere, right? I would point towards...you guessed it, higher prices.

Right now, the prices of Chinese goods are so low that workers in the USA simply cannot compete. That means that they cannot WORK and cannot EARN MONEY.

That is why their wages are so low -- because the prices paid for the goods are low.

And you know what? In China, the people there cannot afford to buy goods that they make. The Chinese government effectively robs from their people to export cheap goods to the USA and enrich a small group of connected industrialists.

[-] 1 points by ancillary (65) 2 years ago

The thing is, short term inflation will hit the poor (you) hard, as you'll see whatever little money you have not go as far.

In the medium to long term though, inflation will benefit those on the bottom, because inflation means rising wages for working people, and declining real value for people who are already wealthy.

In general there is an inverse relationship between employment and inflation. The problem with high inflation was that people would be working harder but would only be sitting in place in terms of real material wealth. Low inflation's problem is high unemployment, as the number of unemployed keep wages that can be demanded down.

Which situation do you think we're in?

[-] 1 points by marsdefIAnCe (365) 2 years ago

"The only way out of debt is inflation,"

I can name at least one other: default. But nice try...

[-] 1 points by ancillary (65) 2 years ago

Inflation is effectively a default, only gradually and without a shock.

[-] 1 points by marsdefIAnCe (365) 2 years ago

It is the opposite in some sense. The TBTF should be defaulting, but instead the Fed transfers wealth from workers to bankrupt institutions via inflation.

[-] 1 points by ancillary (65) 2 years ago

maybe, but in this situation we are in, on a broad level, this is the best solution.

[-] 1 points by marsdefIAnCe (365) 2 years ago

Best for who?

I would much rather see the oligarchy (a small fraction of the top 1%, talking about owners of the private central banks) declared bankrupt and their assets seized.

[-] 1 points by ancillary (65) 2 years ago

Well, that's entirely unrealistic I hope you realize.

Better instead to gradually simply make those large holdings worth less money through inflation. Inflation enriches workers and makes the already-rich poorer.

[-] 1 points by marsdefIAnCe (365) 2 years ago

Absurd. The rich get first access to fresh money. It works precisely the opposite of how you say.

[-] 1 points by ancillary (65) 2 years ago

You're not really explaining yourself.

[-] 1 points by 4Turning (1) 2 years ago

Inflation will not affect the 1%. It will hurt the rest of us whose pay does not increase accordingly. Deflation would be much more beneficial to the rest of us 99%. There is another way out of debt - restructure it. This is the real answer. Inflation helps only the 1 %

[-] 1 points by ancillary (65) 2 years ago

deflation helps those who hold onto debts, not those who have to pay back debts.

As it is, the 99% are deeply indebted from student loans to consumer loans to housing loans.

Those 99% who have so much debt would be served by inflation reducing the real burden of those debts. Think: if your 40k in student loans were instead 20k, wouldn't that be better? that can happen through inflation. better yet, there doesn't need to be a law to debate to get this done. Just a slight change in policy by the federal reserve.

[-] 1 points by 666isMONEY (348) 2 years ago

all the ppl in debt (homeowners) got screwed, now U wanna screw those who saved?

[-] 1 points by ancillary (65) 2 years ago

someone is always getting screwed. overall IMO the benefits of more inflation greatly outweigh the negatives.

[-] 1 points by 666isMONEY (348) 2 years ago

actually, i believe in eliminating money . . . maybe when the $ystem collapses, ppl will realize money is unnecessary. Modern machinery & abundance makes money unnecessary. I'm also for technocracy: the US Senate is a millionaire's club = 1%. We don't need politicians, we need technocrats to distribute goods & services. half the ppl in U$A work at unnecessary jobs (bankers, insurance, real estate, cashiers, etc.).

[-] 1 points by davisstraub (52) 2 years ago

We need 5 to 6% inflation to soften the private and public debt overhang.

[-] 1 points by ancillary (65) 2 years ago

I feel like, given high debt levels, we'd need a decade of about 15% inflation to get us in the clear.

[-] 1 points by davisstraub (52) 2 years ago

Maybe, but that may be a bit extreme.

[-] 1 points by RichardGates (1529) from Fort Walton Beach, FL 2 years ago

not here dude. up a dollar in the last year

[-] 1 points by RichardGates (1529) from Fort Walton Beach, FL 2 years ago

no, they want to print to keep inflation up. what is the opposite of inflation? so what does deflation do to the price of a gallon of milk? anybody?

[-] 1 points by Febs (824) from Plymouth Meeting, PA 2 years ago

Nothing. Milk has national price controls on it.

[-] 1 points by RichardGates (1529) from Fort Walton Beach, FL 2 years ago

up a dollar in my are in the last year dude. north florida.

[-] 1 points by Febs (824) from Plymouth Meeting, PA 2 years ago

http://www.ers.usda.gov/publications/aib761/aib761.pdf

That is a pdf file about the existing Federal price controls on milk. Milk prices can fluctuate but only within the range established.

[-] 1 points by RichardGates (1529) from Fort Walton Beach, FL 2 years ago
[-] 1 points by ancillary (65) 2 years ago

The price of milk is the same as it was five years ago.

If the price of milk went up, US dairy farmers would be able to spend more money, say investing in a Caterpillar machine, thus employing US workers...

[-] 1 points by mgiddin1 (1057) from Linthicum, MD 2 years ago

Yeah, HELLO! Why do you think Bernanke keeps printing and printing and printing? Well, besides the obvious reason - that the toxic losses incurred by banks have been transferred over to the taxpayers. But - the national deficit ain't so bad if you crank up hyperinflation.
Never mind that you will drive the $USD into the ground, and what's left of the middle class with it.

[-] 1 points by jemcgloin (63) from Staten Island, NY 2 years ago

The Fed keeps printing and printing but all of the cash goes to the global banks for near zero interest rates. They have $trillions in reserves that they refuse to spend until the economy comes back, and the economy can't come back until the consumers have rising incomes instead of smaller incomes. (A new study says that the real median income is down 9.6% since 2007!) The Fed should be returned to the treasury dept. and any expansion of the money supply (which is sometimes necessary) should be divided equally among all of the people.

[-] 1 points by mgiddin1 (1057) from Linthicum, MD 2 years ago

All of OWS is yelling about what they think the problem is, but noone really understands what is happening. Here are the cold, hard facts - and they are scary.
http://lewrockwell.com/rep2/100-stats-collapsing-economy.html

[-] 1 points by jemcgloin (63) from Staten Island, NY 2 years ago

Most of the statistics are dead on. The problem is they start by trying to blame it on Obama. I doubt if he is the solution, but I know he didn't create the problem. The problem is supply side economics. It is so imbedded in American Culture now that even the "liberal Media" can't see any alternative. The current economic crunch (which cut revenues drastically and led to much of the large debt numbers over the last few years) was created by policies voted for by a congress controlled by Republicans for 12 years leading up to 2007 and eight years by by President Bush. Ron Paul is still a Republican.

The real job creators are the consumers. If the consumers have money to spend, then businesses will be able to expand, and will be able to find money to invest. When the stock market rewards companies that fire workers, steal pensions, and move factories overseas, and politicians cut the salaries and benefits of public workers, social security, medicare and other benefits, than the money that is spent in local businesses will shrink. Tax cuts are more likely to be spent overseas, invested in risky instruments like the ones that crashed the economy, or put into speculating on commodities driving up the prices for food energy and precious metals. Over the last 30 years the real income of 80% of Americans is flat, while the income of the richest 2% has multiplied by six. (And two former census officials released a study yesterday that says that the real median income is down 9.6% since 2007!) At the same time the capital gains taxes, and corporate taxes are down, and the top income tax income rate has been cut in half. What do we have to show for it? The biggest recession in 60 years. Tax cuts do not grow the economy. Businesses are sitting in $2.9trillion in cash, waiting for consumers to start spending again. At the same time Republicans are demanding more cuts in incomes and benefits for the middle class. It is a downward spiral designed by transnational corporations to turn the United States of America into a third world country. Saudi Arabia just awarded a $1trillion deal to a Spanish consortium to build a high speed rail system. How come it didn't go to American companies? Because, we never built a high speed rail system. It's "too expensive." The Chinese have built 7,000 miles of high speed rail, and many other capital projects. The Chinese stimulus plan was $3trillion--6 times bigger than ours. They do all of the things we can't afford, but we owe them a trillion dollars.
Make giant corporations and billionaires invest in your country, not someone else’s.

[-] 1 points by mgiddin1 (1057) from Linthicum, MD 2 years ago

I agree with your comment that they focus a bit too much on Obama. That is unusual for this site - they are libertarian and usually take pains to point out that Bush et al are just as much at fault.
I don't understand why Ron Paul doesn't just run as an independent or a libertarian - he doesn't agree with much if anything that the other nominees spout off about, and he wants to bring the troops home, period. I will point out though - that the original Repubs were against interventionist aggressive foreign policy too, until the neocons hijacked the party - and later did the same to the Tea Party.
As for your comments RE consumers - I think we need a whole human paradigm/economic system that changes this. WHY do we exists as statistics that are expected to consume? Think about this from a philosophical standpoint. How materialistic is that? Also, do we really need any more trinkets? And the truth is - think what you will about global warming, personally I think it is another liberty-sucking racket - we are devastating the very Earth and natural resources that we depend upon as a species. There is no denying the destruction that is occurring - it is so in our faces. BP oil spill, Fukushima, no one is even talking about these anymore!

[-] 1 points by jemcgloin (63) from Staten Island, NY 2 years ago

You are right that we need a new way to measure economic health besides a constantly growing GDP. We don't need more stuff. But we also don't need more cuts in jobs, pay, and benefits.

[-] 1 points by mgiddin1 (1057) from Linthicum, MD 2 years ago

I envision a world in which people are truly free to create products that clean up this mess we've created. Where we can work together and not have people in Washington DC telling a huge, diverse country what to do from afar. Our jobs, our organizations, currency, schools, and representatives (if we have any) should be local; even the state level is too remote to be responsive.
Also, the truth about the foreign wars is that it's about power, exploiting natural resources, and I don't think many people believe that we are over there 'building democracy' any more than they believe in Santa Claus. Recently I read that our electronic trash goes to Africa, where it creates an environmental nightmare there. Children burn the plastic off, breathing in the fumes, just to get a few scraps of stuff to sell from the rubble. Another example is the real story behind Coke - they use up and pollute third world countries' water supplies and pay the people there slave wages.
This is bigger than us. This is bigger than U.S. This is a human problem. However, I DO NOT advocate a one-world government anymore than I think everyone wears the same shoe size or has the same religion.

[-] 1 points by MattLHolck (16833) from San Diego, CA 2 years ago

when the banks lost the money

somebody must have found it

[-] 1 points by jemcgloin (63) from Staten Island, NY 2 years ago

They lost your money, and their CEOs found it

[-] 1 points by mgiddin1 (1057) from Linthicum, MD 2 years ago

Yeah, maybe it was in those planes of cash that the military lost on the way to the middle east. Hmm, I remember Rummy saying something about losing 2.3 trillion on - what day was it? Oh, September 10th, 2001.
http://www.cbsnews.com/stories/2002/01/29/eveningnews/main325985.shtml

[-] 1 points by jph (2652) 2 years ago

Yes, is is amazing how so few saw that little ploy,. he announced that 2.3 TRILLION was missing the day before 9/11,. and of course it was gone from the media the next day., but of course he had no foreknowledge of the attack.., right.

[-] 1 points by mgiddin1 (1057) from Linthicum, MD 2 years ago

Oh, and follow the money. Do you know who Larry Silverstein is? You should.

[-] 1 points by jph (2652) 2 years ago

The only evidence needed to show that the towers did not fall due to the planes, is the ample video evidence of the towers exploding all the way to the ground,. in a perfect controlled demolition pattern no less. We need not care about what hit the pentagon,. who could have set the charges, or any other speculation. We can clearly see that the 3 towers fell in perfect freefall controlled demolition style, yet the official conspiracy is that the planes and fires somehow managed to cause this. This is simple not possible. We are talking about simple high-school physics here. This is also the reason so many first responders ran INTO the buildings, STEEL FRAMED skyscrapers have never and do not collapse like that due to fire. Period.

This is enough to justify an actual open investigation! (ps I do know many of the interesting facts about that event but the above is really the only truth needed.)

[-] 1 points by mgiddin1 (1057) from Linthicum, MD 2 years ago

All I can say about that is - look up Building 7 and judge for yourself.

[-] 1 points by ancillary (65) 2 years ago

The middle class is already being ground into the ground.

Inflation is between zero and 2%.

Another side benefit of more inflation is that it will push China to stop manipulating its currency. It's the closest thing to a no-brainer in this environment.

[-] 1 points by mgiddin1 (1057) from Linthicum, MD 2 years ago

No, inflation is currently at 3.8% http://www.usinflationcalculator.com/inflation/current-inflation-rates/ They distort the CPI to not include gas and groceries. I see, so the rate of inflation does not reflect how much it costs for us to travel, eat, go to work, heat our houses.

[-] 1 points by MattLHolck (16833) from San Diego, CA 2 years ago

if the minimum wages index is tied to

the inflation index of food/housing cost increase

[-] 1 points by MattLHolck (16833) from San Diego, CA 2 years ago

I didn't include gas because

it's pointless to have to drive to and from work when one could have a local job

[-] 1 points by Febs (824) from Plymouth Meeting, PA 2 years ago

Yeah if you want complete anarchy when inflation creates a bubble that bursts with no return to normalcy possible.

Inflation is a sign of a growing economy - it does not force an economy to grow healthfully. So many economists think that causation is reversible in this instance and it is not.

[-] 1 points by ancillary (65) 2 years ago

The problem with the USA is the debt overhang. Economy will not grow until the debt is worked away. Inflation makes this faster.

[-] 1 points by Febs (824) from Plymouth Meeting, PA 2 years ago

Yes and it also destroys the ability of the poor and middle class to save which forces them into exposing their savings to market risk. This artificially increases investment which artificially creates a boom without demand. When the contraction finally hits that savings is damaged by the loss of growth.

Trust me the negatives of inflation far outweigh its perceived positives.

We have a debt and there are no easy ways out. Like it or not we have do with less by spending less just as individual families and businesses have to do when they are over-leveraged. The appeal of inflation appears like a problem solver and it is what our legislators are addicted to but I assure you it is a huge cause of most of our problems.

In effect its legal counter fitting - it happened to the Continental currency which is where we get the phrase "not worth a Continental" which is why the Constitution mandates the coining of our money in commodities which cannot be created out of thin air.

[-] 1 points by ancillary (65) 2 years ago

No policy will be completely free of downside. Yes, inflation erodes savings but in the current no inflation/high unemployment environment, poor and middle classes are losing ground due to losing jobs/cut wages. With an inflationary environment at least they can get work.

[-] 1 points by jemcgloin (63) from Staten Island, NY 2 years ago

At this time global cash is going to the treasury and US bonds. The effective borrowing rate for the US government is near zero. Any business looking at a zero interest rate would borrow and invest while it was cheap. We have a crumbling infrastructure (hurting the economy), a shortage of jobs, and near zero interest rates. We need to borrow and spend to jump start the economy, then raise taxes on the mega rich to pay for it.

For all of you anti-Keynesians out there: WWII was the largest spending spree in US history, resulting in a much larger debt to GDP ratio than we have now. It increased the GPD greatly. And it was paid for by having a top tax rate of 90%. The economy did fine at that time, and has only gotten worse as we keep decreasing the tax rates, and squeezing the pay of workers to increase corporate profits and CEO pay packages.

[-] 1 points by ancillary (65) 2 years ago

it appears that this is impossible though due to ideological Republicans.

The sheer amount of debt overhang and the unwillingness of Republicans to stomach any sort of revenue raising measures means that the only result possible is inflation.

[-] 1 points by jemcgloin (63) from Staten Island, NY 2 years ago

Nothing is impossible if the People wake up and take control back from the Global Corporations. Occupy Everywhere!

[-] 1 points by ancillary (65) 2 years ago

It is impossible right now. 2012 elections might change things. Channel your energy into taking back control of the House!

[-] 1 points by jemcgloin (63) from Staten Island, NY 2 years ago

I'm sick of Democrats voting for Republican policies and having liberals blamed for the results. I occupy Wall St because the real middle is not halfway between the Repocrats and the Demublicans. The real middle needs to take control of the house and the senate and the presidency.

[-] 1 points by ancillary (65) 2 years ago

When Democrats controlled the House and Senate, real health care reform was passed. Real financial reform can be accomplished with Democratic control.

More Republican control =

1) more debt ceiling brinksmanship 2) more cutting of government in the middle of a recession 3) more culture war garbage about abortion.

[-] 1 points by Febs (824) from Plymouth Meeting, PA 2 years ago

The reasons there aren't jobs right now is uncertainty not lack of liquidity so attempting to solver a problem not at the root won't help.

That being said you're still only thinking short term. What happens when that artificial high wears off and we bust? The artificial housing market Greenspan admits to having created lead us here - how high will your inflation plan get us and how low will we go when we sink?

The only solution as I pointed out is the unpopular one because it means we have to suffer. This tragedy is the result of people pursuing short term feel good inflationary policies for decades. Yes its unfair we have to pay for their good times but it is what it is and it would be unfair and unwise to repeat their mistakes. Unfair because future generations don't deserve it and unwise because they system cannot weather another major shock so the effect would be a total monetary collapse on us.

[-] 1 points by ancillary (65) 2 years ago

There doesn't need to be a "bust". There just needs to be a realignment. Inflation doesn't result in busts anyways. That's what a bubble is, but inflation is by definition a steady rise in prices and corresponding wages. Bankers HATE inflation btw, so if you want to make Wall St. unhappy, call for more inflation.

With cheap Chinese imports, the US has effectively had zero inflation since the mid 90's. This is why there are no jobs and why there is a giant pool of (Chinese) money inflating among other things a giant housing bubble in the USA.

[-] 1 points by Febs (824) from Plymouth Meeting, PA 2 years ago

Yes there needs to be a bust - the market always makes sure phantom capital vanishes from it. Inflation is a bubble if that inflation is artificial increase in the money supply.

Inflation follows real growth but you cannot create real growth through inflation - you're reverse causality.

[-] 1 points by ancillary (65) 2 years ago

The "market" does not make sure phantom capital vanishes. The Federal Reserve might.

[-] 1 points by Febs (824) from Plymouth Meeting, PA 2 years ago

Yes the market does. It is why the .com bubble popped, it is why the housing bubble popped. The market always reaches equilibrium regardless of how people try to interfere with it. This recession is the cure - the medicine is bad but that is because our system was so sick. They refuse to let the bad capital and investments vanish so we languish. Their cures are simply more poison because the poison tastes better than the medicine - it just doesn't work.

Inflation is plainly a naive and simplistic cure to our complex and deep-rooted problems. It is the same reasoning as "I won the lottery right after I stubbed my toe so I am going to sit here and kick the wall until I get rich."

[-] 1 points by ancillary (65) 2 years ago

You're still stuck in the same old boom/bust paradigm. Inflation of 5%/yr =/= new housing bubble. Historically the relationship between inflation and employment is more inflation = more employment. But too much inflation and wages earned by all are less substantial.

We're in an era of high unemployment.

[-] 1 points by Febs (824) from Plymouth Meeting, PA 2 years ago

You're reversing the causation still.

A good stable economy increases demand for dollars as business expands - this pressure causes more currency to be created.

You cannot create a good stable economy by causing inflation and hoping that the void is filled - this causes mal-investment.

Have you ever read Capital and Interest?

[-] 1 points by ancillary (65) 2 years ago

There is a demand problem in the economy and that is linked to an overhang of debt. Inflation reduces the burden in real terms.

Currency doesn't just come out of nowhere -- the money supply is issued by the Federal Reserve. Although, for the past two decades or so China has sold the US goods and then sat on the dollars that the US sent over. So that inherently leads to reduced money supply (though some of that money showed up in the housing bubble).

So yes, in this situation, by stimulating inflation you 1) reduce real debt overhang and 2) disincentivize Chinese manipulation of currency. Both work to increase demand for US workers and voila, you get a recovery.

[-] 1 points by Febs (824) from Plymouth Meeting, PA 2 years ago

Yes my point exactly - the money supply is issued by the Federal Reserve. All of their manipulations come at cost. Macro economics is a (literally and technically - it has a specific meaning ) "complex system". The unintended consequences of manipulation are ignored because no one wants to see them. The politicians profit from phantom money handed out in their districts which helps them get re-elected which allows them to get more money from their business sponsors. Why take a stand against this system so long as you control the printing press?

[-] 1 points by ancillary (65) 2 years ago

Well, it seems to me that people who control the banks have memories of such events which is why they are such inflation hawks. And there is merit to it, since the bailout resulted in the US government assuming massive amounts of bad debt.

But at this point it seems to me that it's more stubbornness than anything. The US has a lot of debt, but that debt is denominated in a currency that the US controls. To not fully leverage this advantage is puzzling, especially since a large proportion of the pain of more inflation would be felt by foreigners.

[-] 1 points by Febs (824) from Plymouth Meeting, PA 2 years ago

They love inflation because it makes them money. The Fed loans them 1 billion dollars and they use the fractional reserve system to turn that into 100 billion (likely more due to how savings and checking accounts are actually classified) then they earn interest on the loans of 100 billion which more than makes up for the interest the Fed is charging (near enough to zero as to be zero now).

What isn't to like if you 're a banker?

[-] 1 points by LearnSomeHistory (58) 2 years ago

Inflation is unpredictable. It's a consequence of an overheated economy. A inflation rate of 8% or 9% per year is not reason for alarm, but double digits inflation is reason for concern.

[-] 1 points by ancillary (65) 2 years ago

I honestly believe that the federal reserve bank possesses the necessary expertise to clamp down on inflation if it goes too high.