Almost $18, 000, 000, 000, 000.00 in the hole! A big government joke!

brucep · Jan 17, 2014

joepistole said: ↑

Yes, but that doesn’t change anything. The United States is NOT Zimbabwe, it has a different monetary system. It has a different economy. It has a different government. It has a different role in the world. It has a different a lot of things.
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No, it has nothing to do with all things being equal. It has to do with the very nature of inflation…the inflation equation. In the high profile cases of hyperinflation like the Weimar Republic and Zimbabwe there were other forces present, but people like to focus on the money supply. I guess it makes better press and it’s easier to demagogue. It wasn’t just an increase in the money supply which caused their hyperinflation.

As I said, inflation is a bit more complicated than you seem to be able to appreciate. Back in my college days, I had a professor who was fond of defining inflation thusly, “too many dollars chasing too few goods and services”, and that is a pretty apt definition. The reason we don’t have inflation today despite a huge multitrillion dollar increase in the money supply is the supply side of the equation. There are plenty of goods and services. And that is why businesses, investors and economists pay so much attention to the monthly unemployment rate. I don’t know if you are old enough or remember Reagan’s supply side economics. But that is what Ronald Reagan’s supply side economics was all about back in the 80’s when the nation really did have an inflation problem as a result of the oil embargos of the 1970’s.

Your assertion that simply increasing the money supply automatically equates to inflation is just flat out wrong, but all too common, especially among the right wing lunatic fringes. And that is why all those fools who a few years ago with the announcement of quantitative easing drove the price of gold up to $1,900+ per ounce. Today gold is selling between $1,100 and $1,250 per ounce. No inflation, and they cannot figure out what went wrong. They got the money side of the inflation equation, but they were ignorant of the supply side of the inflation equation. The fools and the partisans didn’t understand inflation…most people don’t and that is why the issue is so frequently used for demagoguery.

But none of this changes the fact that contrary to your previous assertions, that the US can go bankrupt. It cannot. It unlike you or me can always print money. It prints more money all the time. As the nation grows economically, it needs more money. Economic growth requires a growing money supply. So the bottom line is the nation can grow and has grown the money supply without causing inflation. It has, and it has been doing so for a very long time and more dramatically so since The Great Recession.

I have no idea as to why you think this is relevant or important to this discussion. I don’t know what you are trying to argue. No one is arguing the money supply isn’t important. What is at stake is your assertion that any increase in the money supply (i.e. printing money) automatically means inflation. And that simply isn’t true. And it appears you have reluctantly conceded as much.

The reason the Federal Reserve has dramatically expanded the money supply (tripled) during the recession was to ensure the economy could emerge intact from the liquidity trap we found ourselves in in 2008. And it was the right thing to do, and it did so with virtually no inflation. It gets back to that other often ignored aspect of inflation…the supply side.

http://en.wikipedia.org/wiki/Liquidity_trap

Ah, no, that is hogwash. The fact is that if middle class Joe’s and Jane’s can afford to pay 25% to 35% of their income in income tax and payroll taxes as is the case, there is plenty of room for the top 10% to pay a similar amount and per my previous post, it would have a significant effect on fiscal policy. Your assertion was there was no ability to increase taxes significantly. And that too is just untrue. Tax rates on the top income earners has dropped dramatically since the 80’s when payroll taxes were dramatically increased.

Again, that simply isn’t true as evidenced by previous material. Income taxes which are paid mostly by the wealthy have gone down and payroll taxes which are paid mostly by the middle class have gone up, as evidenced by previously provided material.

LOL, ah, no, the facts are contrary to your claim, the US government is not capable of default unless congress just decides one day it isn’t going to pay its bills. Government as we have discussed ad nauseum can always print money to pay its bills. So it can never default as you had claimed. It does print money. Recently it has tripled the money supply with virtually zero inflation. It didn’t even come remotely close to producing Zimbabwe style inflation nor is it likely to if we properly manage our economy. You my friend are laboring under some severe, but not uncommon for those with little business or economic education, economic misconceptions.

The wisdom printing unlimited amounts of money is another issue and one in which you are trying to use to obfuscate. As I have said many times before there is no substitute for rational fiscal policy - something we have yet to see from the Republican controlled House or the Republican controlled government prior to The Great Recession.

Inflation is like medicine, a little can be good, a lot can be bad. And contrary to your assertion, it affects everyone negatively. Stock prices are not buoyed by inflation because costs and revenues do not go up evenly across all sectors at the same time. It doesn’t hurt those dependent on government programs as much as those programs usually have cost of living adjustments automatically included in their entitlements. It negatively affects fixed income dependent folks be they rich or poor as it devalues their fix investment. So the bottom line is contrary to your assertion excessive inflation affects everyone negatively, rich and poor.
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Thanks for writing that down.

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Write4U · Jan 18, 2014

Question regrading the Free Market choices in Medicine.

a) It is Not by choice that people get sick.

b) It is Not by choice that a sick person must see a doctor and there is no appreciable competition among medical professionals.

c) It is Not by choice that a doctor prescribes the proper medicine for the illness.

d) It is Not by choice that the pharmacy fills the prescription.

e) It is Not by choice that a prescription may call for a patented medicine (no competition).

f) It is Not by choice that the patient must pay any amount for that patented medicine (there is no cap on profit).

I just heard from a researcher that a patient was charged $13000.00 for a patented medicine which costs $300.00 to munfacture.

But because there is no Free Medical market, It is not by choice that the patient MUST pay $13000.00 (and good luck with your insurance company, who may refuse to cover that medicine).

Except for over the counter drugs, there is no Free Market in Medicine in the US. This is why Canada can offer much lower prices, because when they negotiate with US manufacturers they place a cap on profit margin and the manufacturer is faced withe Choice of serving a large market of several million people at lower profit or NO market for their patented drugs. Guess who wins.

In the absence of choice the solution is a strictly regulated Medical Market with Caps on profit margins. Only then will we ever see lower prices in the US!

Health care offers no choices to the patient at any stage. There is no Free Market for the patient in the Medical field.

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Billy T · Jan 18, 2014

Write4U said: ↑

Question regrading the Free Market choices in Medicine.

a) It is Not by choice that people get sick.
b) It is Not by choice that a sick person must see a doctor and there is no appreciable competition among medical professionals.
c) It is Not by choice that a doctor prescribes the proper medicine for the illness.
d) It is Not by choice that the pharmacy fills the prescription.
e) It is Not by choice that a prescription may call for a patented medicine (no competition).
f) It is Not by choice that the patient must pay any amount for that patented medicine (there is no cap on profit).
I just heard from a researcher that a patient was charged $13000.00 for a patented medicine which costs $300.00 to munfacture.

But because there is no Free Medical market, It is not by choice that the patient MUST pay $13000.00 (and good luck with your insurance company, who may refuse to cover that medicine).

Except for over the counter drugs, there is no Free Market in Medicine in the US. This is why Canada can offer much lower prices, because when they negotiate with US manufacturers they place a cap on profit margin and the manufacturer is faced withe Choice of serving a large market of several million people at lower profit or NO market for their patented drugs. Guess who wins.

In the absence of choice the solution is a strictly regulated Medical Market with Caps on profit margins. Only then will we ever see lower prices in the US! Health care offers no choices to the patient at any stage. There is no Free Market for the patient in the Medical field.
Click to expand...

All True (except drug development, not manufacture, is the main cost that must be recovered).

Do you know how much it costs to support an old person in the last 3 years of his/her life? The US has a "Fee for Service" instead of a European like medical system. I.e. one with the AMA restricting the supply of Doctors (will not approve or staff new medical schools). That does make US medical costs more than twice those in Europe, but we have a great cost saving to with our system as US life expectancy is ~ 3 years less.
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Almost $18, 000, 000, 000, 000.00 in the hole! A big government joke!

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Almost $18, 000, 000, 000, 000.00 in the hole! A big government joke!

brucep Valued Senior Member

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Write4U Valued Senior Member

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