The fraying of the U.S. global currency reserve system • Hacker News Board

Re: The fraying of the U.S. global currency reserve system

#221

Post by cloudinshape » Sun, Dec 13, 2020, 9:44 PM UTC

8note wrote: post #205

cloudinshape wrote: post #138

Earlier quoted context omitted.

You have to square the circle. Wages in the US are artificially high because of the dollar's position, but the US needs to either a) match the wages of the countries producing similar stuff or b) increase productivity and value to the levels of countries like Germany. Since b) requires decades in factories, supply chains, trade agreements and most importantly training in actually producing things which means science…

There is also d) the owners take smaller profits

I know these discussions always end up in worker vs owner debates, but what I'm talking here is about the nation.

Factories will need to adjust their prices, now you take that as you will, and if one is naive one can think it means executives will take a pay cut while workers do not, but in the end it mean less wealth for everyone, less money for taxes, less money for shareholders, less money for executives, and of course less money for workers. That is less wealth for the nation.

So yes, owners will take smaller profits, along with everyone else.

Re: The fraying of the U.S. global currency reserve system

#222

Post by HexagonalKitten » Sun, Dec 13, 2020, 9:45 PM UTC

silexia wrote: post #213

ekam wrote: post #167

Earlier quoted context omitted.

What’s wrong with Bitcoin?

If legislation came against it, it would have it's value damaged. No one seems to use it for actual transactions. It uses enormous amounts of electricity.

And a vast majority of BTC is owned by the Bitfinex criminals who created Tether. You can't win against the bank and in this case the bank is the Ponzi schemers themselves.

Re: The fraying of the U.S. global currency reserve system

#223

Post by HexagonalKitten » Sun, Dec 13, 2020, 9:47 PM UTC

specialist wrote: post #208

I'm just a simple bear, so I don't understand any of this stuff. (I comfort myself knowing I'm in good company.) Skim reading this, I provisionally label Lyn Adlen as an advocate of monetary policy. As every one knows, abandoning the gold standard, adopting fiscal policy, makes monitarians anxious. Over time, I'm leaning towards a refreshed Keynesian view: empire means huge military means deficits. Both trade and fed…

Petrodollars will stop mattering when tanks and rockets stop burning hydrocarbons.

Petrodollars are backed by the ability to apply force.

Re: The fraying of the U.S. global currency reserve system

#224

Post by jfim » Sun, Dec 13, 2020, 9:49 PM UTC

AnthonyMouse wrote: post #191

jfim wrote: post #169

Earlier quoted context omitted.

> Tax cuts and subsidies are equivalent. They're not. One can't cut taxes below zero, for starters. Some industries need more than just having negligible taxes to get started, especially in capital intensive businesses. Furthermore, the idea that the only lever that the government has to induce people to do things is lowering taxes is completely absurd. Tax cuts didn't build the Hoover dam, the interstate highway sys…

> They're not. One can't cut taxes below zero, for starters. You might want to check with the IRS, since that's exactly what the EITC does. It's also the de facto result when a company takes a tax loss (e.g. from deducting more expenses than it had in revenue, common for startups) and can then sell the tax loss to another company to offset its tax burden. > Tax cuts didn't build the Hoover dam, the interstate highway…

> that's exactly what the EITC does

The EITC is for individuals that have low incomes, AFAIK. Can you elaborate on how the EITC would increase the amount of US manufacturing?

> It's also the de facto result when a company takes a tax loss (e.g. from deducting more expenses than it had in revenue, common for startups) and can then sell the tax loss to another company to offset its tax burden.

Can the tax loss be sold separate from the legal entity itself?

> As opposed to Tesla's plant at Niagara Falls, or the various privately-owned rail networks in the world, or SpaceX?

Are you saying that without the TCJA, none of these would have been built?

> But that's actually more expensive, and less productive, than just making it more cost effective to manufacture things domestically than somewhere else

Making it "more cost effective" through tax cuts helps existing businesses, not starting new ones.

If a business needs $10 million in capital to buy the machinery necessary to make widget X, and has to compete with an existing factory that produces equivalent widgets and has paid off their existing machinery, how can they compete? The existing business already has relationships with suppliers, customers, and distributors, and if the new entrant looks like it will be trouble, they can just cut their profit margin such that the new entrant will be struggling to cover the extra expenses associated with building all of those relationships while paying off the loans to acquire the machinery.

Heck, both of those businesses could reduce their profit margins to zero, with both having an effective tax rate of zero, and only the established one would be able to effectively compete due to lower costs.

> That's the problem. It doesn't matter how willing one side is to negotiate if Democrats are too busy fabricating lies about Russia collusion to come to the table.

Or one could say that the Republicans are unwilling to play ball as well (eg. over COVID-19 related stimulus). The fact is, whether one party is at fault over the other, Americans and US businesses are paying the cost of the lack of bipartisan initiatives to improve the state of US manufacturing.

Re: The fraying of the U.S. global currency reserve system

#225

Post by jtbayly » Sun, Dec 13, 2020, 9:50 PM UTC

GcVmvNhBsU wrote: post #187

jtbayly wrote: post #168

Earlier quoted context omitted.

So an attempt was made to bring back manufacturing, and that’s so terrible? Let’s all roll our eyes at the Republicans.

It’s fair to eye roll at ineffective agreements that don’t pan out. Racing to the bottom with tax incentives is not the only way to bring back manufacturing and hasn’t seemed to work when it’s tried.

I don’t mind eye rolling at corporate handouts and deals that are mirages. But the parent comment only seems to be mocking the idea of bringing manufacturing back and saying how dumb Republicans are for wanting to do it.

Re: The fraying of the U.S. global currency reserve system

#226

Post by CuriouslyC » Sun, Dec 13, 2020, 9:51 PM UTC

HexagonalKitten wrote: post #219

CuriouslyC wrote: post #87

Earlier quoted context omitted.

The beauty of inflation is that it hurts you in direct proportion to how well off you are, and it can't be dodged (i.e. it's like a wealth tax, only actually achievable). We could drive inflation while also ameliorating a lot of the pain it would cause by implementing UBI (in fact, I'm pretty sure big deficit spending is the only way UBI will ever happen). Defaulting would screw a lot of institutional pension investo…

Actually, all you have to do to dodge inflation is dump your idle currency into literally anything else. Rich people hang in the circles where these plans are made so you'll never take them by surprise. (It'd be interesting to look at Cyprus' banking records and see who would have been impacted had the haircut happened suddenly, two months earlier.) So inflation is irrelevant for the little guy, and easily dodged by…

No argument against the rich having the most time to prep for inflationary policy, but the middle class has their wealth mostly tied up in mortgages, so in no way would they get shafted. Pensions and social security would be garbage, but they're garbage now for most people anyhow.

Re: The fraying of the U.S. global currency reserve system

#227

Post by [deleted] » Sun, Dec 13, 2020, 9:59 PM UTC

lettergram wrote: post #49

CoffeeDregs wrote: post #12

"Instead of drawing down our gold reserves, however, we gradually draw down our domestic manufacturing base and it gets replaced piece-by-piece in foreign countries." To me, this is the money shot. I hadn't seen this expressed before and it makes perfect sense. I'm baffled that we (the US) caused this to happen to the US. I'm (unhappily) registered Republican but I argued vociferously to a Dem friend in 2000 that our…

My father was one of the last tool makers in the US working for Molex. They spent years teaching the Chinese, the Chinese would disassemble all molds sent over to China and often break them, so my fathers team would have to fix / rebuild them. They spent years training the Chinese side-by-side in the US. In the end they still haven’t exactly caught up to the quality we had in the US. However, they now have 5x the too…

[deleted]

Re: The fraying of the U.S. global currency reserve system

#228

Post by Zenst » Sun, Dec 13, 2020, 10:01 PM UTC

lettergram wrote: post #49

CoffeeDregs wrote: post #12

"Instead of drawing down our gold reserves, however, we gradually draw down our domestic manufacturing base and it gets replaced piece-by-piece in foreign countries." To me, this is the money shot. I hadn't seen this expressed before and it makes perfect sense. I'm baffled that we (the US) caused this to happen to the US. I'm (unhappily) registered Republican but I argued vociferously to a Dem friend in 2000 that our…

My father was one of the last tool makers in the US working for Molex. They spent years teaching the Chinese, the Chinese would disassemble all molds sent over to China and often break them, so my fathers team would have to fix / rebuild them. They spent years training the Chinese side-by-side in the US. In the end they still haven’t exactly caught up to the quality we had in the US. However, they now have 5x the too…

>To compete, you really do have to cut minimum wage. You have to loosen regulations, and importantly, you have to do massive tariffs / sanctions on China for the next decade.

Not so, import taxes and one avenue that should be explored is true carbon costs/impact factored in. Why should something made locally be more expensive than something made the other side of the World and shipped all that distance. Clearly some impact costs not being factored and the whole carbon aspect should be utilised for many benefits - balancing out imports for one.

Re: The fraying of the U.S. global currency reserve system

#229

Post by readams » Sun, Dec 13, 2020, 10:04 PM UTC

AnthonyMouse wrote: post #76

lettergram wrote: post #49

Earlier quoted context omitted.

My father was one of the last tool makers in the US working for Molex. They spent years teaching the Chinese, the Chinese would disassemble all molds sent over to China and often break them, so my fathers team would have to fix / rebuild them. They spent years training the Chinese side-by-side in the US. In the end they still haven’t exactly caught up to the quality we had in the US. However, they now have 5x the too…

> To compete, you really do have to cut minimum wage. You have to loosen regulations, and importantly, you have to do massive tariffs / sanctions on China for the next decade. Part of the problem here is that the existence of some kind of universal "more regulations / less regulations" slider is an illusion. It allows the problem to be cast in partisan terms when that isn't the problem at all, because the problem isn…

The problem here -- and perhaps the main problem in all our politics -- is that large swaths of the electorate do not understand the concept of second order effects. Regulations are always good because they consider only the first order effect. That is, the goal of the regulation is usually a laudable one that everyone would support. But you have to look at the costs and unintended consequences of the regulation to really know whether it's a good idea.

This is something that eludes most people, especially among progressives.

Re: The fraying of the U.S. global currency reserve system

#230

Post by SubiculumCode » Sun, Dec 13, 2020, 10:11 PM UTC

tastyfreeze wrote: post #199

SubiculumCode wrote: post #196

Earlier quoted context omitted.

Inflation inflation inflation, gold proponents always want to talk about inflation, never about the steering wheel that fiat currencies provide: Steering that allows us to right the course of our economic ships. When you link to gold, you go where the wind blows you. No control. No steering. Moreover your historical argument is weak. By analogy, we should also not have government, because every society that has forme…

That steering wheel is driving us off a cliff. If the result of having a steering wheel is a loss of trust in the currency and ultimately the collapse of that currency I would rather be blown by the wind.

But it hasn't happened to our currency. The only thing that's happening to our currency right now is our political instability, which frankly is a little unsettling at the moment with all the talk of secession martial law, suspension of the Constitution, and religious fervor for Trump that we are seeing on the far right at this moment in time.