Biden: "“It’s time we remembered that ‘We the people’ are the government."
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https://www.breitbart.com/politics/2021/04/29/joe-biden-we-people-government/
Biden is a total idiot.
I hope all the Biden voters are happy with their choice.
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@raphjd Well, $6T in new spending proposed in 100 days comes to something like $18k per head. That kind of cash buys a lot of bread and circuses.
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@jsl76 Imagine if the Government was forced to have a balanced budget as was constantly demanded by Reagan? Even Bill Clinton was trying to do that. Biden has just decided that he can write any check for any amount and it doesn't matter.
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@raphjd The walls will cave in on Biden more and more over time. He is already in the dumper with all the world leaders. I swear, if Mr. Hankey from Southpark was a democrat, the democrats would elect him to be president. I have yet to come across anybody face-to-face that supports Biden. A lot of people hate Trump, but nobody likes Biden. Trump is like the disciplined school teacher while Biden is like the bumbling substitute that doesn't do anything but cater to the students so they will like him.
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@lololulu19 Having a balanced budget is not a good idea right now. The federal debt is our money supply. There are specific cases you might want to reduce the money supply but just having a "balanced budget" is not one of them.
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@storytellerd said in Biden: "“It’s time we remembered that ‘We the people’ are the government.":
@lololulu19 Having a balanced budget is not a good idea right now. The federal debt is our money supply. There are specific cases you might want to reduce the money supply but just having a "balanced budget" is not one of them.
We haven't had a "balanced" budget since Clinton - and Obama's reckless spending was only outdone by Trump's! -- that is, until Biden came along...
It remains to be seen how much of Biden's wet-dream-list of spending will ever see the light of day, but you can't fault him for one thing: the bitch dreams big!
Unfortunately, as we've discussed here: while the Gov't literally can just print more money, it results in inflation pressures... and usually when that "breaks", it breaks hard...
Buckle your seatbelts, campers... if Biden and the Dems actually get -- even half -- of this wanton cash infusion into the books, we'll see inflation like we haven't seen since the 1970's!
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@bi4smooth I would say it is doubtful that this level of spending will cause high inflation let alone hyperinflation. I find excess demand for something is rarely what causes inflation although the inflation in the '70s was from oil prices because of disruption in supply. Usually, it is just a company raising its profit margins or wall street speculating on commodities that causes inflation.
I've been waiting 20 years for high inflation and skyrocketing interest rates that economists freak out about. I haven't seen them yet. I think most economists don't know what they are talking about if I am quite honest.
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@storytellerd said in Biden: "“It’s time we remembered that ‘We the people’ are the government.":
@bi4smooth I would say it is doubtful that this level of spending will cause high inflation let alone hyperinflation. I find excess demand for something is rarely what causes inflation although the inflation in the '70s was from oil prices because of disruption in supply. Usually, it is just a company raising its profit margins or wall street speculating on commodities that causes inflation.
I've been waiting 20 years for high inflation and skyrocketing interest rates that economists freak out about. I haven't seen them yet. I think most economists don't know what they are talking about if I am quite honest.
I don't know what economists you talk to - I have dinner with some PhD, tenured professors from time-to-time, and I haven't heard my friends worry about inflation since the mid '90s... until the early Obama years (which they claim didn't happen because the banks "swallowed" the huge cash infusion instead of putting it "into" the economy).
Now, in my experience economics professors' prognostication skills are demonstrably worse than meteorologists
Still, while I'm not laying awake at night over it, I am making directed investments to protect myself should inflation take hold...
BTW:
- Have you looked at real estate prices lately? Here in Fla, homes sell in less than a week - for full asking price, if not higher!
- Or car prices? Dealerships are getting full sticker prices for popular new cars and trucks! People who "want a deal" are being turned away - because the next guy in the door will pay full price, and inventories are low!
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@bi4smooth I have. My brother-in-law is an architect, and some people in my family sell residential real estate. From the articles we have read it seems a lot of the price increases have been from rich foreign buyers and multinational corporations buying houses en masse to rent them out. I don't think it has affected my area of the country too badly yet.
I was on a call with my BIL and his doctor a few days ago and when the doctor found out he was an architect he started talking about housing. He lives in Orange County, California and he said houses there are selling for 20% over asking and being paid for in cash so he is having trouble buying a house. That's not something the average American can do. Well in this case not even a well-off specialist can afford to do that.
@bi4smooth said in Biden: "“It’s time we remembered that ‘We the people’ are the government.":
until the early Obama years (which they claim didn't happen because the banks "swallowed" the huge cash infusion instead of putting it "into" the economy).
lol, I would claim we didn't have inflation problems because we were going through a large deflationary event and were hemorrhaging jobs. It's a bit hard to cause inflation while that is going on. That stimulus could have quadrupled and I doubt we would have had any problems.
The last PHD I talked about this in any depth with was the Dean of Gies business school. He was telling me about how large deficits are bad and it was going to make dogs and cats live together, mass hysteria. Then he sent me a paper from the brookings institute to read claiming that, and I'm paraphrasing "This isn't a partisan issue. Even lefty economists agree with this." He said that because I'm obviously on the political left and I guess he thought that if a leftist said it I would believe it.
I read the paper. I think it came out in 2003, and every prediction it made was wrong. It is now 18 years later and nothing in it has come true. I was like dude none of this shit happened and his reply was "Just wait." It's been 18 fucking years dude c'mon. All the paper did was reiterate to me that economists don't know what they are talking about and neo-liberal think tanks that push out bullshit papers aren't to be trusted.
About the cars I can't comment on that at all. I know nothing about cars. If I had to speculate I would say that possibly could be caused by excess demand if production slowed during the pandemic.
My cousin works at GE and they are running behind on appliance orders. If I'm remembering correctly, and I might not be because this conversation was a while ago, he said they usually try to keep production to where they need to make 4000 units, but at the time they were behind by 80,000 units.
I'm super tired and this post got really long, but I'm not going to go back over it and see if it makes sense. I'm just going to hit submit and hope for the best. Have a good night!.
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So I'm not going to include your post here - it would make everything too lengthy... besides, people can scroll up.
Firstly, understand that macro-economics is the study of how masses of people make decisions about money. In other words, it's wildly complex and speculative!
As for the Brookings Institute's paper from 18 years ago, understand that the same Brooking Institute published other papers back then that turned out to be completely true! It's the nature of the business!
In a way, it's like the people who "predicted" that the Tampa Bay Rays would win the American League in 2020... Now that it happened, they seem like geniuses! But in Sports, we know better! They know were just lucky!
Economists (or, more correctly, Macro-Economists) are like sports bettors! (Which is something I said in my earlier post - when I said their ability to predict the future was less than weather forecasters! I'm not talking about the weather-man predicting rain today (that's actually not so hard - in weather OR economics!) ... but about the forecasts of things like "this will a really bad hurricane season" or "this will be a mild hurricane season")
So the problem we have (you and I) is that we're not arguing about the same thing... I'm not so much talking about Gov't deficits causing inflation... at least not that alone!
The problem is that people think of our economy as-if it were like a swimming pool: With only 4 people in the pool, there is plenty of room for everyone to swim, and when the water gets a little low, we can put a hose in and re-fill it.
But pools aren't that simple... some of the swimmers bring friends (now there are more swimmers, but the same amount of water)... some of the swimmers pee in the pool (meaning we need to add chemicals and add a pool filter to keep everyone healthy & free to swim)... and sometimes it rains or it gets really hot (which changes how much and how often we need to add - or remove - water to keep everyone happy).
In the case of macro-economics, people often think of it as a pool - even with the added complexities - except that our economic "pool" has to GROW (and, possibly shrink) as more (or fewer) "swimmers" enter (or exit) the economy.
In economic terms, my concern is the growth in the "Money Supply"
Think of it this way: if you consider our economy as a Monopoly game: when new players come along, if we don't ADD money to the game, eventually there's only $1 per player... and there can't be much of an "economy" because, while there may be $1 million in the "game" and 1 million players, they will not each have exactly $1! That kind of order doesn't exist in any real universe! No, some players will have $1000's, while others have $0...
Now, if you add $10k to the game for each user as they join, but not by giving it to the new user, but rather by just adding it to the "bank" (which, in Monopoly is the "money supply"), things get interesting...
Indeed, I'm going to stop here and suggest you try the following:
- Play monopoly with some of your friends, but change some things:
Start with 1/2 the startup cash, and 1/2 the money in the bank (but leave the prices of everything else the same)... in other words, the same game with 1/2 the money supply. - For more fun, adjust the game 1 more time: all properties are sold at auction. When you land on a property, you can purchase it for the listed price... BUT another player can offer more money for that property, and steal it from you by agreeing to pay more than you're willing to pay for it!
- Now replay that game, but start with 5x the cash to start, and 5x the amount of money in the bank!
It's not that prices go up - that's too obvious! The thing to look at is the behavior of the players! Some players will "adjust" to the fact that $1 in the last game is equivalent to just $0.20 in the earlier one... but the majority will not! They will see that they have more money and will spend "wildly" - so a property they'd only pay $350 for in the first game will be "worth" $2000 or even $3000 in the later one - because they have it! Even though mathematically the equivalent price is just $1750!
NOTE: To be useful, your players can't be told that they're playing with a reduced or expanded "money supply"... they just need to play as-is, without knowledge of the changes you've made.... like "typical" people in an economy!
- Play monopoly with some of your friends, but change some things:
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@storytellerd True.. a balanced budget is not realistic... but neither is pissing away $6 trillion in 3 months on PORK.
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@lololulu19 said in Biden: "“It’s time we remembered that ‘We the people’ are the government.":
@storytellerd True.. a balanced budget is not realistic... but neither is pissing away $6 trillion in 3 months on PORK.
To be clear: $2T is already gone - out the door!
The other $4T are in 2 separate packages that one can only hope are "pie in the sky" numbers posited solely to come down from ... that is, I certainly hope this is just a bargaining tactic... (I want to spend $1T, so let's ask for $2T and see where we can get from there!)
BTW: It seems that @lololulu19 and I agree about something! He must be turning into a liberal!
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@bi4smooth Really interesting seeing your post - and I largely agree with you about your concern.
I do think though that we have had so many years of quantitative easing - without - the corresponding increase in inflation everyone was expecting... that we are likely looking at an update to how economics thinks about the topic. There are, of course, many reasons for this lack of inflation... but it is interesting to see that the vast supply of money that's coming in hasn't even remotely moved inflation.
Do you know of Mark Blithe? His book on austerity is well worth a read. And he has some pretty convincing ideas about why inflation is not happening ATM. Worth looking out a few of his lectures on YouTube if you are interested (and haven't already seen them!).
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@calatar said in Biden: "“It’s time we remembered that ‘We the people’ are the government.":
@bi4smooth Really interesting seeing your post - and I largely agree with you about your concern.
I do think though that we have had so many years of quantitative easing - without - the corresponding increase in inflation everyone was expecting... that we are likely looking at an update to how economics thinks about the topic. There are, of course, many reasons for this lack of inflation... but it is interesting to see that the vast supply of money that's coming in hasn't even remotely moved inflation.
Do you know of Mark Blithe? His book on austerity is well worth a read. And he has some pretty convincing ideas about why inflation is not happening ATM. Worth looking out a few of his lectures on YouTube if you are interested (and haven't already seen them!).
The term "quantitative easing" came from the 2008 fiscal crisis. The term was used for when the Bush administration realized that the bankruptcy of Lehman Brothers and the essential "vanishing" of huge sums of money OUT of our economy had to be "replaced", or things would potentially continue to collapse. That cash infusion did not work as expected - because it was "given" to the major banks - with the understanding that they would "loan" it out to "prop up" the economy. That did NOT happen: the cash wasn't used by the banks for loans - it was used (almost entirely) to "prop up" the cash basis of the banks, show "fake" improvements in their "profitability", and then proffer huge bonuses to the bank executives for miraculously saving the institutions!
The continuation of adding "cash" into the economy can be largely used to explain the US economy's unrivaled run of success (expansion - with minimal inflation) from 2009/2010 through the 1st quarter of 2020 (e.g. until the pandemic). This "slow growth" approach was experimental, but proved to be exceptionally successful!
However, the lack of inflation can be pretty-easily traced to the fact that the "cash infusions" through this time were relatively small. Unlike the THREE lump-sum payments of the covid-relief plans - which were not small, they were HUGE! The first two were demonstrably needed due to economic contractions similar to the fiscal crisis in 2007/2008. And, this time we learned: we didn't send the cash to the banks, we sent it directly to the people (who promptly SPENT it - exactly what was needed!)
The need for the 3rd (and largest) "infusion" (aka: stimulus check) was less obvious, but time will tell if it was "too much too fast"... but the early signs are that there are inflationary signs... significant ones. In the real-estate, home-building, auto-making, and dozens of other industries. Some can be attributed to short-term supply-chain issues, but all at once?
If Biden gets his way, and the Federal Gov't pumps another $2-4T into this economy, I think we're in for a bumpy ride...
BTW: I read recently where Warren Buffet is warning people about possible inflation. Mind you, that doesn't make me (or him) right - but I'm not embarrassed to have come to the same conclusion as arguably the most successful investor of all time....
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Nice thoughtful response! What a pleasant change from what gets posted here so often
Thank you!Yes, I agree with you - in the US economy there are significant inflationary signs. Will be very interesting to see if this actually results in inflation though - as there have been a lot of these signs over the years... and still nothing. It should, don't get me wrong! But, so far... nada.
There are a lot of countries in Europe which have used quantitative easing (yeah I know about that phrase being made up since 2008 - printing money!) - also showing little to no inflation, yet lots and lots of inflationary pressures. It's just that the deflationary pressures are greater - still. Although very hard to quantify!
BTW - not to nit pick, but Buffett actually said he was seeing inflation in what his businesses were doing... everything was costing more (was at his last Annual Report for Berkshire Hathaway...). Not that he was expecting more inflation. I have a lot of time for that man (obviously... super successful!) and so I tend to make sure I don't 'read between the lines' with him, as he's normally super precise in what he's saying. I think he was probably making a more painful comment that inflation isn't measured very well if lots of the things that people buy are getting more expensive, but that's not showing in the inflationary numbers (something I would tend to agree with... inflationary numbers being rather political beasts and tied to so much related to how the government functions!).
