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Fed Ends Zero-Rate Era

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Re: Fed Ends Zero-Rate Era

#321

Post by morgante »

toomuchtodo wrote: post #187
bpodgursky wrote: post #158

Earlier quoted context omitted.

This is super naive. For much of the past decade, congress could have removed the entire discretionary budget (yes, including the military) and still had a deficit. The deficit is driven by social security, medicare, and medicaid. If you want to balance the budget, you have to reform those.

> The deficit is driven by social security, medicare, and medicaid. If you want to balance the budget, you have to reform those. Or increase taxes? Social security taxation is limited to the first ~$120K of someone's income. Why?

> Or increase taxes? Social security taxation is limited to the first ~$120K of someone's income. Why?

Because social security is billed as a retirement scheme, not a wealth transfer scheme. The idea being that you get back out approximately what you get in.

Since benefits are capped, payments necessarily are. If you want to change social security into an explicit wealth transfer scheme, expect heavy resistance.

Re: Fed Ends Zero-Rate Era

#322

Post by canicode »

crdoconnor wrote: post #244
vezzy-fnord wrote: post #235

Earlier quoted context omitted.

The reason many economists are unsure or against the minimum wage is not because they're some agents of bourgeoisie capitalists, but because arguments in favor of it tend to be moral, not economic. For instance, here's a case for the minimum wage presented by an (otherwise very knowledgeable, I'll grant) Post-Keynesian economist: http://socialdemocracy21stcentury.blogspot.com/2013/02/the-e... It's pretty weak. The fi…

I'm not at all concerned about economists who are "for" or "against" the minimum wage. They can hold whatever opinions they want if they don't lie. It's the economists who poorly design studies with the intent of demonstrating that it either causes prices to rise uncontrollably (which it doesn't), causes unemployment to rise (which it also doesn't) and who pointedly never, ever, ever look at the effect it has on prof…

Please read this: https://www.reddit.com/r/explainlikeimfive/comments/3ulzdy/e...

Raising the minimum wage WILL increase unemployment. That's Economics 101. Companies are going to find ways to fire people, or give them fewer hours. Raising the minimum wage to something like $15 would be ludicrous.

Re: Fed Ends Zero-Rate Era

#323

Post by canicode »

crdoconnor wrote: post #320
greggman wrote: post #306

Earlier quoted context omitted.

It sounds like you've dismissed any economist who doesn't agree with you. You claim raising the minimum wage would never raise prices nor cause unemployment to rise. Ok, let's set it to $1000 a hr. Do you really think that would have no effect on either of those? Maybe there's some range on increase where the effects are offset by other effects but it's not lying to believe those effects will become real at some poin…

It hits profits first and hardest. Raise it significantly and it also causes prices to rise. Raise it to stupendous levels (in the US probably > $40-50 hr) and it eventually causes unemployment. Realistically speaking, though, most arguments are over minimum wage hikes that only affect profits and won't even have a minimal effect on prices. $10 -> $12 isn't even going to cause prices to rise, let alone have an effect…

If something is going to have an effect on profits, you can bet on the fact that a company will fight against it, hard. Because SHOCKER the point of a business is to generate PROFITS.

I think you're wrong in thinking that businesses will just give up, and take lower profits. No. They're going to cut hours, fire anyone they can, etc. to maintain their existing profit levels.

Re: Fed Ends Zero-Rate Era

#324

Post by canicode »

pitt1980 wrote: post #260
vezzy-fnord wrote: post #235

Earlier quoted context omitted.

The reason many economists are unsure or against the minimum wage is not because they're some agents of bourgeoisie capitalists, but because arguments in favor of it tend to be moral, not economic. For instance, here's a case for the minimum wage presented by an (otherwise very knowledgeable, I'll grant) Post-Keynesian economist: http://socialdemocracy21stcentury.blogspot.com/2013/02/the-e... It's pretty weak. The fi…

"agents of bourgeoisie capitalists" I don't wonder about the sincerity of most economists I do wonder if there are selection pressures to becoming an economist that prevent a diversity of viewpoints on certain issues sometimes those neatly line up with the bourgeoisie capitalists (who just coincidentally disproportionately have their names on university building and have levers on which university departments get gen…

Would you like a socialist society? Do you want a welfare state? I don't. Why shouldn't some people be able to afford luxuries like names on buildings?

Re: Fed Ends Zero-Rate Era

#325

Post by gotchange »

nikdaheratik wrote: post #295
gotchange wrote: post #167

Earlier quoted context omitted.

> The USD is about as free market as a currency can be reasonably obtain. Nothing about the USD is free market. The USD is shored up by the petro dollar standard and its status as a reserve currency esp. in the commodities market and its supply and management is governed by a quasi-private institution that is in bed with Wall St.

Not only did you ignore what the guy said, but you don't even seem to understand the points you are trying to make. The reason why the dollar is a reserve currency, and why so many oil contracts are made out in USD is because both parties have a reasonable expectation that it will retain its relative value over a reasonable time period. This means that it is a reserve currency because no one group can manipulate its…

Apparently you ignored conveniently the petrodollar part and the Fed being non federal or public institution and just focused on its status of reserve currency to discredit me. Maybe you need to get acquainted more with these points before writing your counterargument.

Re: Fed Ends Zero-Rate Era

#326

Post by dragonwriter »

daveguy wrote: post #311
vezzy-fnord wrote: post #100

Earlier quoted context omitted.

I made some perhaps overly hasty generalizations. HN is a community that is heavily skewed towards a belief in transhumanism (especially that AGI will be coming very soon) and moreover that high rates of technological unemployment are upon us, necessitating a UBI or stronger reforms to make sure the general-purpose labor saving of AGI doesn't cause social unrest from crowding humans out of the labor market. I can't i…

I have made a comment or two recently about how unlikely AGI/superintelligence is in the next 50+ years. Those comments received a net positive response. I don't think HN is as biased toward AGI as you might think. Then again automation in labor tasks doesn't require AGI --just specialized programs that work well. Advanced automation is very likely to have an impact in the next 5-10 years.

Advancing automation in labor has been having a progressive effect for several decades, and will to all evidence keep doing so for the foreseeable future.

Re: Fed Ends Zero-Rate Era

#327

Post by toomuchtodo »

someguydave wrote: post #305
toomuchtodo wrote: post #198

Earlier quoted context omitted.

> 120k may seem like a lot, but it isn't in several parts of the US now (e.g SF Bay Area, New York). And national tax policy shouldn't be dictated by ~2 major urban metros. I agree that tax policy needs to encompass more than just the salary of the working class, but let's not joke ourselves. Medicare already taxes your entire wage base, there's no reason Social Security shouldn't. We keep kicking the can down the ro…

>We keep kicking the can down the road, and its time to own up to the liabilities we've created. I'm afraid it's quite impossible to 'own up' to those liabilities. Look at the debt clock: http://www.usdebtclock.org/ The GAAP liabilities of USG amount to $100 trillion, yet the net assets of the entire US are only $116 trillion. Nearly all of the assets in the entire country would need to be sold to pay for the liabili…

> primarily reducing social security payments (particularly when most of the boomers are drawing on them)

Disagree. Removing the payroll cap for social security taxation causes Social Security to become solvent permanently [1].

> and cutting medical spending - probably by instituting controls on what the government will pay for in terms of end-of-life care.

Sort of agree. The US needs to go single payer, and institute price controls on health services.

[1] http://www.pbs.org/newshour/making-sense/what-impact-would-e...

Re: Fed Ends Zero-Rate Era

#328

Post by TheOtherHobbes »

canicode wrote: post #322
crdoconnor wrote: post #244

Earlier quoted context omitted.

I'm not at all concerned about economists who are "for" or "against" the minimum wage. They can hold whatever opinions they want if they don't lie. It's the economists who poorly design studies with the intent of demonstrating that it either causes prices to rise uncontrollably (which it doesn't), causes unemployment to rise (which it also doesn't) and who pointedly never, ever, ever look at the effect it has on prof…

Please read this: https://www.reddit.com/r/explainlikeimfive/comments/3ulzdy/e... Raising the minimum wage WILL increase unemployment. That's Economics 101. Companies are going to find ways to fire people, or give them fewer hours. Raising the minimum wage to something like $15 would be ludicrous.

Nonsense. That's simply wrong.

And if Econ 101 states it's true, then Econ 101 is wrong too.

Here's a more fact-based explanation, with links to studies and comments by economists:

http://www.dol.gov/minwage/mythbuster.htm

Re: Fed Ends Zero-Rate Era

#329

Post by TheOtherHobbes »

eru wrote: post #281
latch wrote: post #240

Earlier quoted context omitted.

Not all other prices are set by competition. There's much manipulation through things like subsidies, tariffs, tax incentives, and bailouts. Also, having lived in Singapore for years, it's a wonderful city and I love it, but the wage story isn't necessarily one to mimic. It might look grand as a foreigner, but your cleaning lady is probably sharing a 3 bedroom apartment with 16+ other women and doesn't see her family…

And, yet, she still makes more money than in her home country.

And spends almost all of it on rent.

Re: Fed Ends Zero-Rate Era

#330

Post by TheOtherHobbes »

brc wrote: post #249
cubano wrote: post #236

Earlier quoted context omitted.

> To buy something, first you have to produce something worthy of exchange. Everyone has to start from this point. But so many people from the Marxist-leaning schools just don't and refuse to, because at its core this belief destroys pretty much every argument they make about moving from a market-based system to a collective one.

Sure. The Marxism school of thought is one of fantasies, of free lunches from artful arrangement of resources. The problem is that this persistent belief stretches from hard core far-left socialist/communists right up to the centre right of political thought (though I despise the left/right denomination, I use it here to illustrate fashionable thinking). Eventually, beliefs will have to change - anything that can't g…

>The Marxism school of thought is one of fantasies, of free lunches from artful arrangement of resources.

Actually the Marxist school of thought is one of economic self-determination.

That ideal went badly wrong with the concept of the dictatorship of the proletariat.

Even so. Economic freedom - specifically the moral right of the working classes to benefit from the economic value of their labour - is the bedrock concept of both Marxism and Socialism.

And the bedrock moral value of American corporate capitalism is the elimination of that right in favour of distribution of value exclusively to a social conceit called "capital".

Now - in fact both are oversimplified and wrong-headed, and both lead to disaster in different ways.

A useful synthesis may be possible, perhaps. But it's going to take a much more insightful analysis than anything that appeared in previous centuries.

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