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US Federal Reserve raises interest rates for first time since 2018

theguardian.com

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Re: US Federal Reserve raises interest rates for first time since 2018

#611

Post by AnthonyMouse »

schrodinger wrote: post #557
jnsie wrote: post #514

Earlier quoted context omitted.

> It's rare that anyone pitches the government as competent outside of military spending Genuine question - do people see military as competent when it comes to spending?

I don't want to say yes but damn if we don't have a lot of military might, and as much as an American I want to say stop spending it who will fill the void? We're probably the least bad of all possibilities, and if you disagree, please teach me because I'm legitimately open minded!

There are two straightforward answers to this.

The first is that other Western countries could pick up the slack instead of having it fall disproportionately on the US. It only got the way it is because the others were mostly bombed out after WWII and that's no longer the case.

The second is that if the US spent less and did less military interventionism, adversarial countries might not feel the need to spend as much either, and then the balance of power stays the same while everyone spends less money on bombs and warships.

The US is the only one who can initiate this because they're the only ones who can reduce military spending without being threatened even if others don't.

Re: US Federal Reserve raises interest rates for first time since 2018

#612

Post by AnthonyMouse »

pugz wrote: post #607
TrispusAttucks wrote: post #593

Earlier quoted context omitted.

There aren't really blue states. Only blue cities. https://miro.medium.com/max/1127/1*86sURhsiwekHqCuqjbFnkQ.pn...

What's the distinction? I always assumed "blue states" meant a majority of voters in that state voted blue, likewise for red states. Otherwise you might as well say "there's no blue cities, only blue neighbourhoods" and keep getting more granular down to the individual voter.

The distinction is that cities are blue and non-cities aren't, as a rule. "Blue states" are just states where the majority of the population lives in cities.

Re: US Federal Reserve raises interest rates for first time since 2018

#613

Post by landemva »

toyg wrote: post #608
landemva wrote: post #604

Earlier quoted context omitted.

This points to why the EU will likely disintegrate - member countries can't print to monetize country debt. Either EU members split out to regain currency autonomy, or EU officially federalizes member country debt.

Obviously the latter will happen - it is in fact already happening, between eurobonds and recovery fund. We just don't make a big song and dance about it - quiet work is how the EU is managing to do the unthinkable of federating this anarchic and unruly continent. The economic imbalances between EU states are nothing, compared to the ones between US states. Do you see the US "disintegrating" anytime soon?

USA federalized State debts a long time ago.

I could see Illinois imploding due to retiree obligations and pieces of Illinois being absorbed by neighbor States. More likely for federal government to take over State pensions because federal government can emit unbacked money.

Re: US Federal Reserve raises interest rates for first time since 2018

#614

Post by guelo »

pugz wrote: post #607
TrispusAttucks wrote: post #593

Earlier quoted context omitted.

There aren't really blue states. Only blue cities. https://miro.medium.com/max/1127/1*86sURhsiwekHqCuqjbFnkQ.pn...

What's the distinction? I always assumed "blue states" meant a majority of voters in that state voted blue, likewise for red states. Otherwise you might as well say "there's no blue cities, only blue neighbourhoods" and keep getting more granular down to the individual voter.

City folk aren't real muricans

Re: US Federal Reserve raises interest rates for first time since 2018

#615

Post by guelo »

briHass wrote: post #521
mjevans wrote: post #496

Earlier quoted context omitted.

Or alternately raise taxes in the good times (rather than interest rates) and pay down that debt... which at least in the US we've got one political party dead set against at all costs.

I assume you're taking a swipe at Team Red, but do remember that the recent TCJA had a provision that removed the ability to deduct state/local (SALT) taxes from your Federal taxes due, above a certain amount. One could consider this very fair: if you argue for higher (Federal) taxes, you should pay what's owed, regardless of what you paid to any local governments, especially since you have much more control over whe…

It was a tax cut bill with tax increases targeted at political enemies. There are many other loopholes that could have been closed but Trump was all about attacking political enemies. The anger wasn't at the tax increases it was about the abuse of power.

Re: US Federal Reserve raises interest rates for first time since 2018

#616

Post by AnthonyMouse »

lupire wrote: post #576
briHass wrote: post #521

Earlier quoted context omitted.

I assume you're taking a swipe at Team Red, but do remember that the recent TCJA had a provision that removed the ability to deduct state/local (SALT) taxes from your Federal taxes due, above a certain amount. One could consider this very fair: if you argue for higher (Federal) taxes, you should pay what's owed, regardless of what you paid to any local governments, especially since you have much more control over whe…

Somehow the Red "cut the taxes and spending" never give back the net inflows they take from Blue states.... Blue states have higher taxes to care for their citizens so they have to take less in Federal handouts.

That's not how it works:

https://worldpopulationreview.com/state-rankings/donor-state...

California is a net recipient of federal money (though not by a lot). The biggest donors are the blue states in the northeast. But plenty of blue states are recipients and the biggest recipients are the swing states, because politicians shamelessly buy their votes.

And the reason the states in the northeast pay the most isn't because of state-level benefits reducing the need for federal programs (which rarely if ever happens). It's because those states are disproportionately the wealthy people who pay the most taxes.

But getting rid of the SALT deduction didn't care about that. Wealthy people in California lost more than equally wealthy people in New Hampshire, even though California is a net recipient and New Hampshire is a net donor, because New Hampshire has lower state and local taxes.

Re: US Federal Reserve raises interest rates for first time since 2018

#618

Post by Scarblac »

zer0tonin wrote: post #351
Scarblac wrote: post #269

Earlier quoted context omitted.

I seem to recall that France used to do this -- create money for government spending, taxed money ceases to exist, no need for government debt. But I can't find anything about it, and I don't know if I'm just not using the right search terms. Has this been put into practice in large countries before?

Is France a small country now?

It's not, I'm just doubting my own memory so was wondering in general if there was an example, France or elsewhere.

Re: US Federal Reserve raises interest rates for first time since 2018

#619

Post by kavalg »

AviationAtom wrote: post #240
mtoner23 wrote: post #205

Earlier quoted context omitted.

Or you could use your capital to invest in a business to increase the supply of goods that this excess money is chasing. That would help fight inflation.

This is one of the best ideas, but it would be wise to find a business that is recession resistant.

Any ideas what kinds of businesses these might be?

Re: US Federal Reserve raises interest rates for first time since 2018

#620

Post by raxxorrax »

roenxi wrote: post #303
andreyk wrote: post #137

An interesting aspect of this is that the endless printing of money in the last few years was a sort of stress test of modern monetary theory, which has been seeing lots of discussion in those same years. I never quite understood how this theory would work while avoiding inflation, and what's happening now seems to at least be related - https://www.nytimes.com/2022/02/06/business/economy/modern-m... Conceptually the…

An important point to keep in mind when talking about MMT in a policy setting is that the people who will implement it don't care about theory and will make a series of short-term politically expedient and/or vaguely corrupt decisions. If they implement MMT, there are good odds that it will just look like money printing. It doesn't really matter what the academic plan is, the policy isn't going to follow it. Much lik…

I also don't see the positive result to be honest. We will get high prices and high interest charges? That is only a beneficial development for a very select group of people.

So if that is the result of such a monetary theory or not, maybe it does not have beneficial goals?

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