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Debt, Spending, & Keynesian Foolishness
You know, only a childish kook would believe that crap, without knowing that the real culprit of all this is not the companies, trying to seek economic protection, but the actual people they think can solve the troubles for them. And I am talking about the political prostitutes in DC. They are the ones who are the most guilty. Yet they are the ones who deflect their guilt by going after others. And people, who have more intelligence than common sense needed to keep them intellectually afloat, continue to fall for all this manure.

THAT is the real shame.
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“Socialism always begins with a universal vision for the brotherhood of man and ends with people having to eat their own pets.”
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Silver has hit appears to have hit a "circuit breaker".

http://www.kitco.com/charts/livesilver.html

Compare "normal trading" to what appear to be "price controls" for 4/22 trading. Either the sovereigns are directly intimidating the market makers or they are muscling their way (with actual stock and purchases) to feign price stability. But how the heck can this be conducted on a global scale?? Gold has been 'flattened' as well. I haven't seen anything that looks like you can't actually do physical purchases ... but then again, I don't frequent the same outlets as the world's bankers.

This is pretty wild sh*t. I can't imagine that they could keep it up very long without some sort of police action. Yikes!
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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Obama Wrote:Obama said Saturday there is no "silver bullet" that will slash gas prices immediately. But he said there are things government can do to help make a difference in the long term. They also include boosting U.S. oil production, rooting out any illegal activity by traders and speculators and ending $4 billion in annual taxpayer subsidies to oil and gas companies.
Instead of subsidizing yesterday's energy sources, we need to invest in tomorrow's
link
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Fredledingue Wrote:
Obama Wrote:Obama said Saturday there is no "silver bullet" that will slash gas prices immediately. But he said there are things government can do to help make a difference in the long term. They also include boosting U.S. oil production, rooting out any illegal activity by traders and speculators and ending $4 billion in annual taxpayer subsidies to oil and gas companies.
Instead of subsidizing yesterday's energy sources, we need to invest in tomorrow's
link

Fred, The Boy Wonder has been saying things like that, and doing just the opposite, from day one. American Indians used to call that "speaking with a forked tongue."

Here is the thing. Many people tend to be swayed by intentions, and equate intent with actions. But actions really do speak louder than words: unless you keep speaking in platitudes over and over, and over, and.......................... Hitler and his henchman Goebells drove home. It's called the Big Lie.

In other words, the Boy Wonder says one thing, and then does the opposite.

Tell me Fred, do you believe he will actually do what you posted above? Do you? And knowing that he is responsible for helping raise the cost of energy in the US, do you think he will change course? Do you?

Well, I don't, but I will say this. If he actually does take those steps, and not create a smoke screen, then I will believe him. I think you know what this means in Russian, right?

"doveryai, no proveryai"
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“Socialism always begins with a universal vision for the brotherhood of man and ends with people having to eat their own pets.”
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John L Wrote:...he[Obama] is responsible for helping raise the cost of energy in the US...

This is just another right wing lie. Oil production in the US is up since Obama took office. And everything that he might want to do that would increase the price hasn't been done. If you really knew anything about economics you wouldn't be repeating this lie.
The rightist motto: "Facts?... we don't need no stinkin facts."

[Image: Obama08_Logo150.gif]
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jt Wrote:You must be getting happier by the day, Q. All those electric cars and windmills and the nationalization of oil companies across the world. The "big oil problem" will soon be solved.
yes. down with that scum. the first commercial electric aircraft is on the market, and it is not more expensive than a good car. unrivalled low operating costs, too. flying that thing without engine noise must be a joy. i think the next generation of drones will be electric, because at 50 decibel, you can't hear them from 100 yards away.

Quote:[Image: 110325electric.jpg]

Electric airplanes are getting more numerous, with the latest making its initial flight in Augsburg, Germany. The Elektra One, developed by Calin Gologan of PC-Aero, was flown by test pilot Jon Karkow.

Since that flight, the aircraft has completed an additional three flights for up to 30 minutes. It will next be upgraded with a variable pitch prop and retractable landing gear.

Karkow was the project leader and test pilot for the around-the-world Virgin Global Flyer, and more recently served as technical program manager for the Virgin Galactic commercial space program at Scaled Composites in California.

The single-seat Elektra One is claimed to have a three-hour endurance using rechargeable batteries and a range of more than 216 nm. The aircraft has a payload of 220 pounds and is claimed to cruise at 86 knots.

It is the first of a family of airplanes. The Elektra Two will carry two passengers, while the Elektra Four will carry four. Half of the design work is completed for the two-seat model.

Every electric airplane needs a solar-powered hangar, right? After all, there is a lot of battery recharging to do between flights. Elektra One comes with its own solar-powered hangar. The complete system, airplane and hangar, will enter the market at a goal price of $141,300, a variable price based on the Euro.

The aircraft will first be offered in Germany in the Ultralight class, or it can be sold in the United States as Experimental when it comes to market. Eventually it will be sold as a U.S. light sport aircraft, when ASTM standards are completed for electric aircraft. That could take one to two years, designer Gologan said in a telephone interview from Germany. Gologan will complete German and ASTM certification, and then sell the project to Neo Wings for serious production.

The aircraft will enter the NASA/CAFÉ Green Flight Challenge in July 2011. The aircraft will be shown at Aero Friedrichshafen in April, where it will enter a separate competition for efficient aircraft. Its hangar will be used at the show.

“We are [going to be] flying at zero carbon dioxide, a three-hour endurance, noise of 50 decibels, which is half that of an LSA and five times less than a Part 23 airplane, and at low cost of $35 to $40 per hour,” Gologan said.

http://www.aopa.org/aircraft/articles/20...light.html
"You know, Paul, Reagan proved that deficits don't matter." Dick Cheney
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Spiffy. I wonder how big the battery is?

From the article: "low cost of $35 to $40 per hour".

Hmm. Electricity must be very expensive in EUland. $35 will buy many KWH in the US, probably around 350 KWH. 1KWH = 3.6MJ of energy. It would take a 3.6 kg Li battery to store that. Thus a 360 Kg battery would contain about 100KWH of energy. It is hard to imagine that the small plane would have a bigger battery than that.
Jefferson: I place economy among the first and important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our choice between economy and liberty, or profusion and servitude. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy.
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here's their website. http://www.pc-aero.de/
empty weight, battery, and payload 100 kg each, 16 kw engine. juice is about 24 eurocent per kwh in germany, somewhat more if you choose from renewable sources.
"You know, Paul, Reagan proved that deficits don't matter." Dick Cheney
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Isn't that neat? It won't be long before you can take your extended family cross country, or for a Sunday afternoon spin to the city, and back. Will you be sure to post pictures here "Q"? I'm looking forward to them.
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“Socialism always begins with a universal vision for the brotherhood of man and ends with people having to eat their own pets.”
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[Image: kn043011dAPR20110429034514.jpg]
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“Socialism always begins with a universal vision for the brotherhood of man and ends with people having to eat their own pets.”
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Why "democrats"? Republican are as well responsible, irresponsible should I say for the debt/deficti/spending craze.
You realy think that Trump will reduce the it? Come on...
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(04-30-2011, 06:15 PM)Fredledingue Wrote: Why "democrats"? Republican are as well responsible, irresponsible should I say for the debt/deficti/spending craze.
You realy think that Trump will reduce the it? Come on...

Unfortunately you are correct there Fred. However, when it comes to spending, the Jackasses are the world's best at doing it.

So what do I think of all this talk about reform?


[Image: sk042811dAPR20110428124535.jpg]

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“Socialism always begins with a universal vision for the brotherhood of man and ends with people having to eat their own pets.”
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Dr. Thomas Sowell discusses the Keynesian Fed and how fancy-speak really doesn't change things. An ugly economic policy is still ugly, no matter how it is dressed out.

Quote:Fed Up with the Fed?
By Thomas Sowell
5/3/2011


When people in Washington start creating fancy new phrases, instead of using plain English, you know they are doing something they don't want us to understand.

It was an act of war when we started bombing Libya. But the administration chose to call it "kinetic military action." When the Federal Reserve System started creating hundreds of billions of dollars out of thin air, they called it "quantitative easing" of the money supply.

When that didn't work, they created more money and called it "quantitative easing 2" or "QE2," instead of saying: "We are going to print more dollars-- and hope it works this time." But there is already plenty of money sitting around idle in banks and businesses.

The policies of this administration make it risky to lend money, with Washington politicians coming up with one reason after another why borrowers shouldn't have to pay it back when it is due, or perhaps not pay it all back at all. That's called "loan modification" or various other fancy names for welching on debts. Is it surprising that lenders have become reluctant to lend?

Private businesses have amassed record amounts of cash, which they could use to hire more people-- if this administration were not generating vast amounts of uncertainty about what the costs are going to be for ObamaCare, among other unpredictable employer costs, from a government heedless or hostile toward business.

As a result, it is often cheaper or less risky for employers to work the existing employees overtime, or to hire temporary workers, who are not eligible for employee benefits. But lack of money is not the problem.

Those who are true believers in the old-time Keynesian economic religion will always say that the only reason creating more money hasn't worked is because there has not yet been enough money created. To them, if QE2 hasn't worked, then we need QE3. And if that doesn't work, then we will need QE4, etc.

Like most of the mistakes being made in Washington today, this dogmatic faith in government spending is something that has been tried before-- and failed before.

Henry Morgenthau, Secretary of the Treasury under President Franklin D. Roosevelt, said confidentially to fellow Democrats in 1939: "We have tried spending money. We are spending more than we have ever spent before and it does not work."

As for the Federal Reserve today, a headline in the Wall Street Journal of April 25th said, "Fed Searches for Next Step."

That is a big part of the problem. It is not politically possible for either the Federal Reserve or the Obama administration to leave the economy alone and let it recover on its own.

Both are under pressure to "do something." If one thing doesn't work, then they have to try something else. And if that doesn't work, they have to come up with yet another gimmick.

All this constant experimentation by the government makes it more risky for investors to invest or employers to employ, when neither of them knows when the government's rules of the game are going to change again. Whatever the merits or demerits of particular government policies, the uncertainty that such ever- changing policies generate can paralyze an economy today, just as it did back in the days of FDR.

The idea that the federal government has to step in whenever there is a downturn in the economy is an economic dogma that ignores much of the history of the United States.

During the first hundred years of the United States, there was no Federal Reserve. During the first one hundred and fifty years, the federal government did not engage in massive intervention when the economy turned down.

No economic downturn in all those years ever lasted as long as the Great Depression of the 1930s, when both the Federal Reserve and the administrations of Hoover and of FDR intervened.

The myth that has come down to us says that the government had to intervene when there was mass unemployment in the 1930s. But the hard data show that there was no mass unemployment until after the federal government intervened. Yet, once having intervened, it was politically impossible to stop and let the economy recover on its own. That was the fundamental problem then-- and now
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“Socialism always begins with a universal vision for the brotherhood of man and ends with people having to eat their own pets.”
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Sowell is forever incisive and lucid.
Jefferson: I place economy among the first and important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our choice between economy and liberty, or profusion and servitude. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy.
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Professor Donald Boudreaux points out more Naive Keynesiasism: A Failure of Imagination.

There is never an end to the rot when Keynesian theory is applied, all in the name of Collectivist intrusion.

Quote:Each of us has a set of peeves—things that disproportionately irritate us.

By their nature, most peeves are small. For example, I bristle at the failure to use hyphens correctly. As my late, great teacher Fritz Machlup pointed out, a foreign exchange student is typically not a foreign-exchange student. The first is a student studying temporarily in a foreign country, while the second is a student of international currency transactions. (I can’t resist recalling a classified ad whose author offered for sale a “black-man’s bowling ball.” I’m quite sure that this hyphen was misused.)

Some peeves, however, are large. These are ones that spark over-the-top irritation. One of my largest peeves is the frequently heard assertion that because personal consumption expenditures are currently (say) 70 percent of GDP, our standard of living will fall if personal consumption expenditures fall below that level.

This notion is Keynesianism at its most naive—Keynesianism that, though rejected or slathered with conditions by most or all Keynesians in the academy, motivates the (mis)understanding of too many reporters, pundits, and politicians who speak on economic issues.

I avoid here any discussion of the many conceptual problems involved in measuring economic output and in classifying expenditures. (Okay; I’ll mention just one such problem: A large chunk of “personal consumption expenditures” in the United States is on medical care, which is financed massively by government. As Michael Mandel points out, “[I]t’s misleading to say that ‘consumer spending is 70 percent of GDP’, when what we really mean is that ‘consumer spending plus government health care spending is 70 percent of GDP.’”)

The fundamental error woven throughout such naive Keynesian arguments about the importance of a particular level of consumer spending to the economy is that there is no “correct” or “optimal” level of consumer spending apart from whatever is the level that results from individuals freely choosing to spend and to save.

The Precious Aggregate

Suppose Americans for the past several years spent 70 percent of their incomes on consumer electronics, Las Vegas vacations, and massage therapy, while saving the remaining 30 percent for retirement. There is in this pattern of spending and saving nothing inherently natural or precious. It’s simply the measured aggregate result of how hundreds of millions of Americans chose to allocate their resources over the past several years.

What happens if this year Americans’ preference for saving changes so that they now spend only 60 percent of their incomes on consumer electronics, Vegas vacations, and massage therapy, while saving 40 percent for retirement?

One effect is that producers and importers of consumer electronics will earn less money than before, as will masseuses and owners of Vegas hotels and casinos. Another effect is that some workers in these industries will lose their jobs.

Naive Keynesians focus like lasers on this effect. They worry that workers—some of whom are laid off and all of whom now (the naive Keynesians tell us) are more anxious about their economic futures—will reduce their spending even further. And because workers reduce their spending, investors (it is alleged) will reduce their investing.

It’s a spiral downward. The economic rot spreads.

And because before consumers changed their behavior, personal consumption expenditures were 70 percent of GDP, naive Keynesians—after intoning that “consumption is 70 percent” of the economy—will demand government action to restore that level of consumption.

But the fact is that, in this example, personal consumption expenditures are not any longer 70 percent of GDP. They are lower. And there’s nothing wrong or undesirable about this fact.

When income earners change the amounts they spend relative to the amounts they save, they of course change the pattern of economic activity. One trouble with naive Keynesians is that they assume the earlier pattern of economic activity—the one that prevailed before the “disruptions” when the level of employment was high—is somehow special. They take that earlier pattern as defining some sort of standard that ought not be disrupted—and if disrupted, ought to be restored.

With people now spending only 60 percent of their incomes on consumption goods and services, while saving 40 percent, naive Keynesians assume that—in the absence of government intervention—the economy will shrink, jobs will disappear, and people will become poorer. The reason is that some chunk of necessary consumer expenditure is now going into savings.

“How can the economy recover,” ask naive Keynesians, “if the 70 percent of it that is personal consumption expenditures is not all used for that purpose?”

Naive Keynesians commit too many errors even to list in the space allotted to me in this column. Perhaps foremost among these errors is their mistaken presumption that the practical imagination and initiative of entrepreneurs is as narrow and as anemic as their own in fact is.

If it were true that entrepreneurs were so dull that none of them could ever figure out how to employ a greater supply of saved resources in ways that improve the operational efficiency of a factory, increase the quality of a consumer good, and enhance worker training so that more will be produced in the future when those higher retirement savings are drawn down, then perhaps increased savings would always spell economic trouble.

Precluding Economic Change

But that would be a world in which any economic change spelled trouble. It would be a world in which, even if people merely changed the kinds of consumer goods they purchased (rather than changed the total amount they purchase), entrepreneurs would be unable to figure out how to adjust to such changes in consumer preferences.

Any change would spell damnation, releasing spooky animal spirits that scare everyone into withdrawing as much as possible from the economy.

Open-eyed observation of the commercial world in which we live should be sufficient to dispel these naive-Keynesian presumptions and fears. Entrepreneurs are forever on the lookout for ways to improve efficiency, to make their products more attractive to consumers, and to introduce totally new products.

Change is a natural and ever-present part of the competitive market process. So just because naive Keynesians can’t imagine how increased savings might be productively employed to make the economy stronger—just because they can’t imagine what capital goods the economy would produce if consumers changed their preferences and started saving more—does not mean that pattern of spending and saving which existed in the recent past is better than any one that will emerge in the future.
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“Socialism always begins with a universal vision for the brotherhood of man and ends with people having to eat their own pets.”
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Alas, too bad Walter Williams did not address this issue. Boudreaux is just not up to illustrating his point well.
Jefferson: I place economy among the first and important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our choice between economy and liberty, or profusion and servitude. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy.
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I don't know if this has been posted here at the forum yet. If so, forgive the repeat, but this is a good illustration for the budget cuts being proposed on the Democratic side.

Obama's proposed cuts

Mind you, if you apply the proposed Republican cuts, it ain't all that much more impressive.
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Right you are. And if we actually have the moral integrity to admit it, all those Jackasses and Dumbasses would quickly be replaced with a bunch, eager to do what is right for the country.

I hope you are not about to hold your breath on this prospect.
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“Socialism always begins with a universal vision for the brotherhood of man and ends with people having to eat their own pets.”
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No, I think we're going to have to wait for the federal government to completely collapse, and hope that the individual states (those not running on the federal model) can hold it together long enough to rebuild a federal government more in line with the original constitutional concept. Better hope that they do, as opposed to the alternatives.
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(05-11-2011, 03:40 PM)Huh...What? Wrote: No, I think we're going to have to wait for the federal government to completely collapse, and hope that the individual states (those not running on the federal model) can hold it together long enough to rebuild a federal government more in line with the original constitutional concept. Better hope that they do, as opposed to the alternatives.

When that does happen, I personally think some of those states, such as Texas, are not going to want to stick around and have to shoulder the burden of hoisting up the Rust Belt/NE corridor basket cases. And I would not blame them either.

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“Socialism always begins with a universal vision for the brotherhood of man and ends with people having to eat their own pets.”
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