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When did Scrooge become a role model?

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Re: When did Scrooge become a role model?

#11

Post by comment176 »

crpatino wrote: post #10
dantheman wrote: post #2

Complete and utter trash. "Returning to the original measuring stick, let us see if society is productive. Bashful is working to make ice cream. But Scrooge is not productive. If the venture is successful, then Scrooge will get money for nothing. He has gotten his money “to work for him.”23 In fact that is not what is happening. Money cannot work. Bashful is doing all the work and Scrooge is taking some of the reward…

Did you actually read the article? Hoarding 75% of the currency in an economy cannot, under any circumstance, be called "delayed consumption". Before Scrooge, everyone earned its keep and got whatever he wanted. Life was good. It is true that not everybody have the same income or savings, but in general everyone was well fed and was able to buy whatever he needed. The savings where delayed consumption, you know... sa…

True. In our specialized economy everyone's dependent on each other.

Re: When did Scrooge become a role model?

#13

Post by dantheman »

comment176 wrote: post #9
dantheman wrote: post #2

Complete and utter trash. "Returning to the original measuring stick, let us see if society is productive. Bashful is working to make ice cream. But Scrooge is not productive. If the venture is successful, then Scrooge will get money for nothing. He has gotten his money “to work for him.”23 In fact that is not what is happening. Money cannot work. Bashful is doing all the work and Scrooge is taking some of the reward…

The problem with your analysis is that a business needs investors and customers to succeed. Excessive saving can harm an economy.

Excessive saving cannot harm the economy, as more people save the interest rates go down -- the earn less, and there is plenty of money to be invested. People do not put money in their mattress, they invest it either through a savings account or in the stock market.

Re: When did Scrooge become a role model?

#14

Post by comment176 »

dantheman wrote: post #13
comment176 wrote: post #9

Earlier quoted context omitted.

The problem with your analysis is that a business needs investors and customers to succeed. Excessive saving can harm an economy.

Excessive saving cannot harm the economy, as more people save the interest rates go down -- the earn less, and there is plenty of money to be invested. People do not put money in their mattress, they invest it either through a savings account or in the stock market.

Think of this way. What if today, everyone decided to spend nothing and invest all their money. What will happen to the world economy? You can't make money investing in a business if no one is buying their product. That proves that there is a point at which savings can be harmful.

Excessive savings will drive down the interest rates, and they have. Despite the fact that government borrowing is through the roof, interest rates barely hover above zero because of excessive savings.

I don't mean to deny the importance of savings but be careful that you don't take demand for granted.

Re: When did Scrooge become a role model?

#15

Post by comment176 »

dantheman wrote: post #8
Retric wrote: post #5

Earlier quoted context omitted.

I suspect that China currency manipulation has reduced global economic efficiency. It's mostly second order effects ex: Cheap Chinese exports still require the same raw materials which drives up global commodities prices. Now if China was growing faster than other nations have when they transitioned to "modern" economy's that would be one thing. But South Korea experienced similar growth rates when they where develop…

I agree it's keeping the economy poorer, but is it harming the world economy? People are getting goods at lower prices, that frees up more money for investment. So I'd say if anything it's improving the world economy. Once again, I feel the only objection is that it is unfair to chinese citizens because the are essentially being stolen from. As for you comment on 2nd order effects, I think that is incorrect -- China…

What's the use of getting a good at a lower price if you've lost your job?

To get back to your original question, I think the global economy may have been hurt due to China's mercantilist policies. Some perceive China to be adopting non-cooperative "I win, you lose" strategies that will motivate defensive and non-cooperative measures from other countries. This is bad, potentially very bad.

Also, even if the global economy is better now than it was when China was undeveloped, that doesn't mean China's policies are ideal. The world economy might be even better than it is now if China changes its policies, increases its internal demand and spends down its surplus.

Re: When did Scrooge become a role model?

#16

Post by dantheman »

comment176 wrote: post #14
dantheman wrote: post #13

Earlier quoted context omitted.

Excessive saving cannot harm the economy, as more people save the interest rates go down -- the earn less, and there is plenty of money to be invested. People do not put money in their mattress, they invest it either through a savings account or in the stock market.

Think of this way. What if today, everyone decided to spend nothing and invest all their money. What will happen to the world economy? You can't make money investing in a business if no one is buying their product. That proves that there is a point at which savings can be harmful. Excessive savings will drive down the interest rates, and they have. Despite the fact that government borrowing is through the roof, inter…

Interest rates right now are not a function of saving, they are manipulated by the federal reserve. If you look at hayek's model of the business cycle you'll know that what we have going on right now is not good; primarily because we are printing money like crazy instead of letting the dollar adjust in value as it should.

Re: When did Scrooge become a role model?

#17

Post by comment176 »

dantheman wrote: post #16
comment176 wrote: post #14

Earlier quoted context omitted.

Think of this way. What if today, everyone decided to spend nothing and invest all their money. What will happen to the world economy? You can't make money investing in a business if no one is buying their product. That proves that there is a point at which savings can be harmful. Excessive savings will drive down the interest rates, and they have. Despite the fact that government borrowing is through the roof, inter…

Interest rates right now are not a function of saving, they are manipulated by the federal reserve. If you look at hayek's model of the business cycle you'll know that what we have going on right now is not good; primarily because we are printing money like crazy instead of letting the dollar adjust in value as it should.

The Fed can't manipulate interest rates down. They have to offer a high enough rate to sell their notes. Right now there is such over-saving that the fed can clear the sales by offering almost zero (really negative rates if you factor in inflation) interest rates. For all the talk I hear of the Fed printing at record rates, I have yet to see anyone point to a treasury auction that failed.

"we are printing money like crazy instead of letting the dollar adjust in value as it should." I can read that as you advocating for a variety of different things, and so I can't tell exactly what point you are trying to make.

Any way, thanks for the discussion and good luck in your engineering career.

Re: When did Scrooge become a role model?

#18

Post by dantheman »

comment176 wrote: post #17
dantheman wrote: post #16

Earlier quoted context omitted.

Interest rates right now are not a function of saving, they are manipulated by the federal reserve. If you look at hayek's model of the business cycle you'll know that what we have going on right now is not good; primarily because we are printing money like crazy instead of letting the dollar adjust in value as it should.

The Fed can't manipulate interest rates down. They have to offer a high enough rate to sell their notes. Right now there is such over-saving that the fed can clear the sales by offering almost zero (really negative rates if you factor in inflation) interest rates. For all the talk I hear of the Fed printing at record rates, I have yet to see anyone point to a treasury auction that failed. "we are printing money like…

The fed doesn't sell treasury bonds in fact it buys them: http://online.wsj.com/article/SB123739788518173569.html

Right now what is going on is the fed is loaning money to banks at 0%, the banks are buying treasury bonds which pay 4% and so they get free money fix their balance sheet at our expense. Every dollar the FED prints the less the money you own is worth.

Re: When did Scrooge become a role model?

#19

Post by comment176 »

dantheman wrote: post #18
comment176 wrote: post #17

Earlier quoted context omitted.

The Fed can't manipulate interest rates down. They have to offer a high enough rate to sell their notes. Right now there is such over-saving that the fed can clear the sales by offering almost zero (really negative rates if you factor in inflation) interest rates. For all the talk I hear of the Fed printing at record rates, I have yet to see anyone point to a treasury auction that failed. "we are printing money like…

The fed doesn't sell treasury bonds in fact it buys them: http://online.wsj.com/article/SB123739788518173569.html Right now what is going on is the fed is loaning money to banks at 0%, the banks are buying treasury bonds which pay 4% and so they get free money fix their balance sheet at our expense. Every dollar the FED prints the less the money you own is worth.

Earlier you argued that people are not saving too much. However, your article says that people are in fact saving so much that the Fed is trying to turn them away. According to the article, the Fed first dissuaded savers by lowering the interest rate to zero, and when that proved ineffective they bought back the treasuries they had previously issued. I assume you have withdrawn your earlier argument.

I think your point now is that the government should not have bailed out the financial sector. That's a different discussion that should have its own thread. Perhaps your point is that the Fed and the Treasury are working against each other? I don't distinguish between the two and believe Bernanke/Geithner work hand in hand, but again that's a different discussion.

Also, for accuracy's sake, treasuries are not paying anything close to 4%, unless you're looking at very long term rates which are neither here nor there.

You jump around a lot, which makes it difficult to see the point you are trying to make. Unless you want to revive your "society can never save too much" argument, I would like to end this discussion.

Re: When did Scrooge become a role model?

#20

Post by BenjaminRoss »

comment176 wrote: post #9
dantheman wrote: post #2

Complete and utter trash. "Returning to the original measuring stick, let us see if society is productive. Bashful is working to make ice cream. But Scrooge is not productive. If the venture is successful, then Scrooge will get money for nothing. He has gotten his money “to work for him.”23 In fact that is not what is happening. Money cannot work. Bashful is doing all the work and Scrooge is taking some of the reward…

The problem with your analysis is that a business needs investors and customers to succeed. Excessive saving can harm an economy.

Not in Silicon Valley. Here success starts and ends with attaining investors. Customers and sales are immaterial.
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