Obama: Worst President Ever? Topic

MikeT23
Posts: 58012 (0)
Hall of Famer
87 1 47 1 189
Prospect
Posted by jrd_x on 6/14/2012 1:06:00 PM (view original):
Posted by MikeT23 on 6/14/2012 1:02:00 PM (view original):
Handing that money out in $100,000 increments to 10 poor people would also create momentary demand.    But 10% inflation affects everyone else.
A business (or government) handing out cash like that certainly would create demand.

We're getting to the inflation part, but it may take years if tec is going to argue that a business spending capital doesn't help the economy. 

So maybe the government should hand out money?

Where will it come from?

6/14/2012 1:24 PM
jrd_x
Posts: 1481 (0)
Prospect
3
Prospect
There's actually an argument for that in certain situations.  But let's finish inflation first and then come back around to that.

Still waiting for tec to acknowledge that a business spending capital helps everyone in the economy (including small businesses and individuals). 
6/14/2012 1:26 PM
tecwrg
Posts: 18997 (0)
Hall of Famer
4 1 166 32 129
Prospect

For the sake of moving along in this discussion, let's say I'm entirely on board with what you're saying.  Proceed.

6/14/2012 1:30 PM
MikeT23
Posts: 58012 (0)
Hall of Famer
87 1 47 1 189
Prospect
Where does the government get money?
6/14/2012 1:37 PM
jrd_x
Posts: 1481 (0)
Prospect
3
Prospect
Posted by tecwrg on 6/14/2012 1:30:00 PM (view original):

For the sake of moving along in this discussion, let's say I'm entirely on board with what you're saying.  Proceed.

Great.

Recapping #2.  A bunch of capital sitting idle in a recession is bad.  Getting that capital moving again is essential to increasing demand and improving the economy.

We agree on this.

The next question, is there policy that can be implemented to encourage the capital to move?  

Ignoring fiscal policy solutions (stimulus, tax cuts, regulatory changes, etc.) for the moment because this discussion is on monetary policy and that is set by the fed, the tools we have are somewhat limited.

Would you agree that the fed driving down interest rates encourages capital movement?
6/14/2012 1:42 PM
tecwrg
Posts: 18997 (0)
Hall of Famer
4 1 166 32 129
Prospect
Sure.
6/14/2012 1:51 PM
jrd_x
Posts: 1481 (0)
Prospect
3
Prospect
And what can the fed do if it lowers interest rates to zero (or essentially zero) and capital is still not moving enough to recover the economy?
6/14/2012 2:06 PM
MikeT23
Posts: 58012 (0)
Hall of Famer
87 1 47 1 189
Prospect
Give out money?
6/14/2012 2:31 PM
tecwrg
Posts: 18997 (0)
Hall of Famer
4 1 166 32 129
Prospect
Posted by jrd_x on 6/14/2012 2:06:00 PM (view original):
And what can the fed do if it lowers interest rates to zero (or essentially zero) and capital is still not moving enough to recover the economy?
Enlighten me, please.
6/14/2012 3:15 PM (edited)
MikeT23
Posts: 58012 (0)
Hall of Famer
87 1 47 1 189
Prospect
So it's not give out money?
6/14/2012 2:52 PM
toddcommish
Posts: 5084 (0)
Hall of Famer
516 10 1 14 16 90
Prospect
PRINT MORE MONEY.  HAND THE FRESHLY MINTED BILLS TO PEOPLE WHO DON'T WORK.

It's the liberal way.
6/14/2012 3:31 PM
MikeT23
Posts: 58012 (0)
Hall of Famer
87 1 47 1 189
Prospect
If the gubmint gives me money, I'm gonna make it rain!!!!


6/14/2012 4:03 PM
jrd_x
Posts: 1481 (0)
Prospect
3
Prospect
Posted by tecwrg on 6/14/2012 3:15:00 PM (view original):
Posted by jrd_x on 6/14/2012 2:06:00 PM (view original):
And what can the fed do if it lowers interest rates to zero (or essentially zero) and capital is still not moving enough to recover the economy?
Enlighten me, please.
Inflation is essentially lowering interest rates to negative.  Now, capital is encouraged to move, not because it doesn't make money sitting still, but because it actually losses money sitting still.

Lowering interest rates encourages capital to move, which increases demand, which helps improve the economy.  Increasing inflation has more downside than just lowering rates and if it exceeds a certain level, the upside is completely wiped out by the downside.  But right now, while we are in a prolonged slump and inflation has been historically low (~2%), increasing it a few percentage points has more positive than negative.
6/14/2012 4:47 PM
MikeT23
Posts: 58012 (0)
Hall of Famer
87 1 47 1 189
Prospect
Not for anyone on a fixed or semi-fixed income. 
6/14/2012 4:51 PM
jrd_x
Posts: 1481 (0)
Prospect
3
Prospect
Posted by MikeT23 on 6/14/2012 4:51:00 PM (view original):
Not for anyone on a fixed or semi-fixed income. 
That is a downside.  While it helps the economy recover overall, there are some people who are affected.
6/14/2012 4:53 PM
◂ Prev 1...113|114|115|116|117...462 Next ▸
Obama: Worst President Ever? Topic
△Top△Bottom

Search Criteria

Terms of Use Customer Support Privacy Statement

© 1999-2025 WhatIfSports.com, Inc. All rights reserved. WhatIfSports is a trademark of WhatIfSports.com, Inc. SimLeague, SimMatchup and iSimNow are trademarks or registered trademarks of Electronic Arts, Inc. Used under license. The names of actual companies and products mentioned herein may be the trademarks of their respective owners.