All Forums > General Discussion > Non-Sports > Who should give in?
3/21/2013 11:23 AM
Posted by swamphawk22 on 3/20/2013 5:27:00 PM (view original):
You still seem to view the economy as infinite.

If we keep borrowing that ties up a part of the economy.

You can argue if that makes the economy sluggish, but you cannot argue that there is only so much money. We are not priniting money out of the blue, we are borrowing it from someone else.
That's the point. We're borrowing money that would otherwise be sitting still in a savings account or CD. Even if the government is wasteful and inefficient, wasteful and inefficient spending is better (for the economy when demand is depressed) than no spending.
3/21/2013 11:28 AM
Finance 101.

You put your money in a CD.

The group that offers the CD pays you.

They need to invest that money somewhere or they lose money.

It doesnt just sit there.
3/21/2013 12:13 PM
Posted by swamphawk22 on 3/21/2013 11:28:00 AM (view original):
Finance 101.

You put your money in a CD.

The group that offers the CD pays you.

They need to invest that money somewhere or they lose money.

It doesnt just sit there.
If there was some shortage of capital, I'd agree with you. But we had the exact opposite. Public companies and banks were flush with cash. They just didn't have a reason to spend it because of the depressed demand.
3/21/2013 1:46 PM
Again if you have cash in the bank you are making money.

The bank is losing money.

They need to invest.

So if there were no bonds they would need to create markets.
3/21/2013 2:12 PM
Posted by swamphawk22 on 3/21/2013 1:46:00 PM (view original):
Again if you have cash in the bank you are making money.

The bank is losing money.

They need to invest.

So if there were no bonds they would need to create markets.
Not necessarily. My regular bank savings account pays .01% interest. Banks get more than that from the Fed on their reserves.
3/23/2013 1:12 PM
I think you mean 1%, but that still represents money that isnt being made.
3/25/2013 10:26 AM
Posted by swamphawk22 on 3/23/2013 1:12:00 PM (view original):
I think you mean 1%, but that still represents money that isnt being made.
No, I mean .01%. Rates aren't higher because banks are flush with capital.
3/28/2013 4:07 PM
your return is either 0.01 or 1%.
3/28/2013 6:52 PM
Posted by swamphawk22 on 3/28/2013 4:07:00 PM (view original):
your return is either 0.01 or 1%.
No. The actual rate of the regular savings account that I have is 0.01%.

Not a typo.

I have a CD with AIG that pays 1.05% but it has a $10,000 minimum and I can't touch the money for a specified period of time.
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All Forums > General Discussion > Non-Sports > Who should give in?

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