31–40 of 56 posts
Bitch about people who didn’t save for an emergency expense or for retirement. Bitch about people who spend frivolously. And now, miraculously, bitch about people who are saving. This is not a complex problem. If you want people to spend money you must give them a proper safety net. That means pensions and health care.
Even with the macroeconomic effects as valid the mode of thinking is so painfully backwards and entitled in so many ways. 1. The job of the producers is to produce what the consumers want, not the consumers to accept whatever they want to produce! It is not a birthright to guaranteed profit from whatever they want to produce being sold. That has never existed. It brings to mind every idiot CEo of a business which fai…
https://www.linkedin.com/in/matt-egan-7b75542b
He is a journalist who worked for Fox and now CNN and likely doesn’t know what he is talking about.
Before someone jumps on the apparent logical fallacy, let me point out that I started by saying his argument isn’t sound or valid, as the comment I am responding to correctly explains.
Earlier quoted context omitted.
Good analysis. Relying on credit to enable consumer spending happened in the mid 1920s as stagnant wages, and income inequality reduced the discretionary budget of most consumers. At best spending on credit is a temporary boost to the economy as consumers will eventually be tapped out and spending will stop. I agree with you, consumer debt isn't the solution, more affluent consumers is the solution. Raise wages, sell…
This sounds exactly like what's happening in America today. Bring jobs back to the country, which elevates wages due to low unemployment, high worker demand. Bring manufacturing back to the country, which causes better products by them being designed closer to the people who would consume/use them.
(I almost said ”offshored" but Mexico and South America)
It's only a problem if you subscribe to (in my opinion, the flawed and incredibly destructive) modern economic theory which is largely a continuation of the Keynesianism of the mid-20th century. Ask any economist why deflation is a bad thing and they will generally tell you that it is because they want to avoid a deflationary spiral with collapsing prices and high unemployment, which is why they want to ensure that c…
> b) ... this means that if more people put money in the bank, the bank will have more money to lend out and interest rates would fall This is not how lending works for banks in the western world. Banks do not lend out their customers savings. Basically banks are legally allowed to create money out of thin air. They are only limited by their equity in how much money they can create as they have to reserve a certain a…
The whole system creates money. And it's not some weird sort of stealing (unless a creditor defaults, of course), it's a lubricant and catalyst of economy, and why I don't have to maintain a herd of cows just for use in trading my computer software for your pickles. Money (currency) is only useful when it moves, so creating it is good for people.
Anyone can create money. If I write "IOU a chicken, redeemable by whoever holds this paper" on a sheet of paper, I just created money (but not US legal tender fiat currency)
As bad as it is, I feel like this is our chance to do some large scale norm changes. Eg. Shorter standard work week, more time off. No as some liberal/socialist agenda but as a way to reach full employment again. I don’t think we’re ready for basic income, but whatever the right stepping stone is, I think govt has a big enough reason to address it now. Edit: our/we = US, habit and context of article
> No as some liberal/socialist agenda but as a way to reach full employment again. You know that this is bascially the same reason socialists are in favor of shorter working weeks, right? Their "socialist agenda" is virtually the same as your reasoning.
This depression will test our country’s ability to rally and cross political lines for the good of the people the way we have in the past. Something that previously was far left may seem viable to right leaning constituents when they’re struggling to meet basic needs.
Wow they criticise you when you spend and now they criticise you when you save.
Earlier quoted context omitted.
> b) ... this means that if more people put money in the bank, the bank will have more money to lend out and interest rates would fall This is not how lending works for banks in the western world. Banks do not lend out their customers savings. Basically banks are legally allowed to create money out of thin air. They are only limited by their equity in how much money they can create as they have to reserve a certain a…
They don’t lend out their customer’s savings directly per-se but you have to have deposits in order to have assets to lend against. Otherwise, why wouldn’t you be able to create a bank out of thin air and loan money? Customers cost money, why even have them? I think what you missed in the article you linked is the concept of reserve requirements. What the person you’re responding to said is actually correct, again ot…
Under the followup regime (Basel III) its: https://en.wikipedia.org/wiki/Basel_III#Leverage_ratio
Earlier quoted context omitted.
Good analysis. Relying on credit to enable consumer spending happened in the mid 1920s as stagnant wages, and income inequality reduced the discretionary budget of most consumers. At best spending on credit is a temporary boost to the economy as consumers will eventually be tapped out and spending will stop. I agree with you, consumer debt isn't the solution, more affluent consumers is the solution. Raise wages, sell…
This sounds exactly like what's happening in America today. Bring jobs back to the country, which elevates wages due to low unemployment, high worker demand. Bring manufacturing back to the country, which causes better products by them being designed closer to the people who would consume/use them.
Earlier quoted context omitted.
> b) ... this means that if more people put money in the bank, the bank will have more money to lend out and interest rates would fall This is not how lending works for banks in the western world. Banks do not lend out their customers savings. Basically banks are legally allowed to create money out of thin air. They are only limited by their equity in how much money they can create as they have to reserve a certain a…
They don’t lend out their customer’s savings directly per-se but you have to have deposits in order to have assets to lend against. Otherwise, why wouldn’t you be able to create a bank out of thin air and loan money? Customers cost money, why even have them? I think what you missed in the article you linked is the concept of reserve requirements. What the person you’re responding to said is actually correct, again ot…
That certainly seems to match the customer service attitudes I've seen from many banks...