Republican candidates for 2012
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BGFalcons82
I used to think like that, until I read a little more. Here's a link to a Walter E Williams article he wrote during the Bush flogging over potentiall privatizing a fraction of Social Security "donations" - http://www.wnd.com/news/article.asp?ARTICLE_ID=42988gut;911959 wrote:"Payroll tax" and "insurance premium" are one in the same here. It's a social insurance program operated like a ponzi scheme. You're basically buying an annuity. That those premiums have not been invested or saved in the "lock box" doesn't change the intent/design of the program. The fraudulent way the govt has chosen to operate the program is another matter.
Here's the take home -
The bottom line is that the payroll taxes dedicated to the social security "trust" fund deducted from each and every paycheck until the salary reaches $106,000 is just a tax collection. There are no "accounts" set up in anyone's name...regardless of how many letters stating so that they send out to soothe the masses. They can, and have, adjusted the percentages of "investment", the time people can start withdrawing from it, who's eligible, and whatever else the Congress feels like changing.[LEFT]
The next big lie is from the same Social Security pamphlet: "Beginning Nov. 24, 1936, the United States government will set up a Social Security account for you ... The checks will come to you as a right." First, there's no Social Security account containing your money, but more importantly, the U.S. Supreme Court has ruled on two occasions that Americans have no legal right to Social Security payments.
In Helvering v. Davis (1937), the court held that Social Security was not an insurance program saying, "The proceeds of both (employee and employer) taxes are to be paid into the Treasury like internal-taxes generally, and are not earmarked in any way." In a later decision, Flemming v. Nestor (1960), the court said, "To engraft upon Social a concept of 'accrued property rights' would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands ..." That flexibility and boldness mean Congress can constitutionally cut benefits, raise retirement age, raise Social Security taxes and do anything it wishes, including eliminating payments.
Read more: Social Security deceit http://www.wnd.com/news/article.asp?ARTICLE_ID=42988#ixzz1Z5y7uKE0[/COLOR][/LEFT]
The Chilean model sets up said accounts and gives credit where credit is due. See...that way, it is truly for retirement and not a nest egg for the Washington elite leeches to pilfer and insert an "IOU" in the treasury in place of cash. There is no way our federal budget could have grown the exponential way it has without our "leaders" getting their fingers on the decades of social security "excess" revenue and spending it with glee. Well, the piper is to be paid now that the costs are quickly approaching revenues and they're all flummoxed as to how to keep our socialist state afloat without using "IOU"s in the treasury. -
Heretic
John Kerry'd be a better comparison than Gore. Both Bush and Obama were generally unpopular presidents looking for a second term in an election that you'd THINK would go to the other party if they had a viable candidate. In 2004, the Dems apparently decided they didn't even need a viable candidate and went for Kerry, essentially handing the election to Bush.gut;911058 wrote:That small of a margin against an un-named Repub candidate? Pretty much says the Repubs will have to find someone worse than Al Gore to run in order for Obama to win the election.
That's pretty much the same situation the Repubs have now. An election they SHOULD win, as long as they can pick a viable candidate and not someone who will "inspire" a WTF THIS GUY SUCKS!!! reaction. -
Cleveland Buck
http://www.huffingtonpost.com/laura-trice/ron-paul-11-point-plan_b_947832.html
I'm happy to see someone put all of this in a column, although she left a couple important things out like repealing regulations (other than the EPA and Obamacare which she mentions in the article) and also the Free Competition in Currency Act that repeals the unconstitutional legal tender laws and repeals taxes on gold and silver and allows them to be used as currency. -
I Wear Pants11: Doesn't the gas tax go towards our (already in bad shape) highways? If we get rid of this what pays for them?
10: Fair enough
9: Okay as long as it doesn't outlaw unions. No one should be forced or disallowed from joining a union
8: Sure
7: I've got complicated views on this issue but I'm not immediately oppossed to this
6: Fair enough
5: Okay
4: Yes
3: Again, complex opinions, not exactly oppossed or in support of this
2: Don't know that this is a great idea but an audit wouldn't be entirely bad
1: Refusing to raise the debt ceiling is stupid and reckless. If you're actually committed and doing well you will be able to balance the budget and such as quickly as possible but there is no reason to potentially harm our credit rating further by having us have to stop paying someone (whether that be our own programs or an outside creditor). -
gut
Which is little different from how most insurance operates. You're payout is often not guaranteed, subject to review and adjustment. And there is always the risk the insurance company defaults or goes bankrupt. Ponzi scheme is a nice politicized term, but it's pretty clearly social insurance with the normal sort of risks insurance carries with it (annuities, by the way, are full of hidden fees and risks and generally a lousy investment).BGFalcons82;911982 wrote: The bottom line is that the payroll taxes dedicated to the social security "trust" fund deducted from each and every paycheck until the salary reaches $106,000 is just a tax collection. There are no "accounts" set up in anyone's name...regardless of how many letters stating so that they send out to soothe the masses. They can, and have, adjusted the percentages of "investment", the time people can start withdrawing from it, who's eligible, and whatever else the Congress feels like changing.
I don't disagree, at all, with OTrap in that I'd gladly take that money in a fund to manage myself. But it is what it is. I would complain about it, except it's the about the only federal tax some 40-50% of the population pays, and you know damn well most would piss it away if it wasn't force-withheld from paychecks. In that regard, whatever money they get from it is just that much less in future handouts I'll have to subsidize with my taxes. No fucking way am I going to advocate abolishing the only federal tax 40-50% of the population pays, regardless of whether you think it's social insurance, tax or a ponzi scheme. -
gut
Yeah, I meant to say Kerry....he was just that forgettable.Heretic;911993 wrote:John Kerry'd be a better comparison than Gore. -
BoatShoes
I don't think it's a matter of being a "hypocrite" but I hear a lot of conservatives say this..."Oh well you know, I didn't like "No Child Left Behind" or "Medicare Part D" and I wasn't happy with his spending you know..." But if you look at Bush's gallup polling, his support amongst Conservative Republicans was in the 90% range when he was at his lowest polling amongst the general population and when more moderate republicans supported him less.majorspark;905197 wrote: Myself and many conservative railed against this. You would be hard pressed to find anyone on the right on this forum who would defend it. What is your point? Just because some big government republican supported a large socialist expansion at the federal level does not make everyone on the right a hypocrite by default.
Conservative Republicans defended Bush until the end in most cases in my experience. The Weekly Standard did not lament Bush like Paul Krugman laments Obama. Jmog says "Bush's first term was good?" What about the largest expansions of the welfare state since the 60's is good to a true conservative? So he cut revenue and made it harder to pay for the damn things???
The point is I suppose, that I often hear that "not all Republicans are Conservatives" but Conservatives never hold Republicans to the same standard they hold Democrats. And it's not about "hypocrisy" in my mind but just partisanship masked as grass roots populism. I don't know maybe this time around is different and Obama "broke the camel's back" but I just don't see how that can be true when his programs are less socialist (being that they were supported by yesteryear's conservatives and not yesteryear's liberals) and yet there was no national movement spawned to create a coalition of attorney's general to challenge them in federal court.
There was not a single Attorney General who filed a lawsuit against No Child Left Behind, which essentially created a nationwide school board, a huge usurpation of a power traditionally granted to the states (especially under the strict constructionist view). I mean at least there was Supreme Court Precedent (even if you suppose wrongly decided) supporting Congressional power to regulate health insurance. Yet the town halls were empty.
And so to me, it just seems that what the Republicans/Conservatives are claiming is a revolution against big government is really just a mask for deeply ingrained partisanship. If Mitt Romney wins the nomination, then that's all this is to me. If I'm a small government libertarian type...a huge federal subsidy for drugs and a national school board are much bigger steps towards "socialism" than a mechanism to punish people if they don't take responsibility for their own healthcare and refuse to purchase private health insurance in a nationwide market (albeit regulated blasted dems). If you take away the R's and the D's it seems to me it should be obvious which ones would instigate widespread anger at bigger government.
Cleveland Buck and I disagree a lot but I think he's onto something; it is one thing to say "well I didn't like what those guys did either" and to talking about Fire and Brimstone like Ron Paul has been doing since the Nixon Shock. I know that if there were any states with a Libertarian Party member as Attorney General during the passage of "No Child Left Behind" they would have brought a lawsuit claiming it Unconstitutional. If TEA partiers want to really see a radical reduction in the size of government they will vote for Ron Paul IMHO.
Again, maybe the time has come where the real Conservatives are "Fed Up" with the establishment Republicans and they just swallowed their pride when W was President...I think you've intimated this as much before. I'm not a TEA partier so I don't know...but I guess I just don't see how such a block of people could be ostensibly furious over 1 president's domestic spending program creation....when there was such little anger manifested over a previous president's policies which, at least in my liberal eyes, were more in line with liberal ideology but that is just me. -
O-Trap
Let 'em, but DON'T let them mooch later just because they pissed away their own.gut;912649 wrote:I would complain about it, except it's the about the only federal tax some 40-50% of the population pays, and you know damn well most would piss it away if it wasn't force-withheld from paychecks.
It may sound heartless, and I certainly haven't crunched any numbers, but I am truly warming to the whole opt-out option (the "ten-percent-in taxes-but-don't-ask-the-government-for-anything" concept). As in, give the option for things like Social Security, but just don't make them mandatory. I see the problem, generationally, where if more want it later, and fewer wanted it sooner, there would be less to pay out ... but that's the same result as we're getting now, and it's getting pretty drastic at this point, so I can't imagine it being that much worse. -
gut
But you know that is never going to happen. This country won't turn it's back on grandma being out on the street with no food or shelter or healthcare. You know those people will happily take their money and then, years down the road when they don't have a pot to piss in, they'll demand the govt buy them one.O-Trap;912713 wrote:Let 'em, but DON'T let them mooch later just because they pissed away their own.
You can privatize it, but you still need to protect the idiots from themselves by forcing them to save. The mortgage interest deduction worked much the same way, up until the housing collapse, because it created financial incentive to own, becoming the biggest source of savings most people had. -
O-Trap
You're right that it will never happen, but it should.gut;912897 wrote:But you know that is never going to happen. This country won't turn it's back on grandma being out on the street with no food or shelter or healthcare. You know those people will happily take their money and then, years down the road when they don't have a pot to piss in, they'll demand the govt buy them one.
You can privatize it, but you still need to protect the idiots from themselves by forcing them to save. The mortgage interest deduction worked much the same way, up until the housing collapse, because it created financial incentive to own, becoming the biggest source of savings most people had.
Grandma should have been wise and frugal and planning for that day. The thing is, from an economic standpoint, we view the "government" as an entity detached from the general population, but the government is funded BY the general population.
As such, when granny ignores the charities and possible relatives, instead demanding that "the government" pay for her irresponsibility, she's really demanding that WE pay for her irresponsibility. She might as well walk up to you and demand that you give her money. -
Cleveland Buck
They will never go for it until they have to, and they will have to. If we have a hyperinflationary depression the government checks won't be worth anything anyway. And now everyone can see the foolishness of using your home as your savings. It doesn't work that way. Your home is a place to live. You need to save money on top of that. Imagine the real economic growth we could have had if instead of speculating on real estate people would have taken that money and invested it or saved it (and banks would therefore lend that out to businesses).gut;912897 wrote:But you know that is never going to happen. This country won't turn it's back on grandma being out on the street with no food or shelter or healthcare. You know those people will happily take their money and then, years down the road when they don't have a pot to piss in, they'll demand the govt buy them one.
You can privatize it, but you still need to protect the idiots from themselves by forcing them to save. The mortgage interest deduction worked much the same way, up until the housing collapse, because it created financial incentive to own, becoming the biggest source of savings most people had.
People will eventually have to take care of themselves whether they want to or not. Only at that point it will be infinitely harder to do so. The sad thing is now if people relied on family and charities and even state and local governments when they need help, they would be so much better taken care of, and the federal government might not be bankrupt.
+1O-Trap;912907 wrote:You're right that it will never happen, but it should.
Grandma should have been wise and frugal and planning for that day. The thing is, from an economic standpoint, we view the "government" as an entity detached from the general population, but the government is funded BY the general population.
As such, when granny ignores the charities and possible relatives, instead demanding that "the government" pay for her irresponsibility, she's really demanding that WE pay for her irresponsibility. She might as well walk up to you and demand that you give her money. -
gut
You come out ahead paying a mortgage vs. paying rent in the long-run. Doesn't matter if the home value drops 50%, 50% of a big number is a hell of a lot more than 0.Cleveland Buck;912927 wrote:And now everyone can see the foolishness of using your home as your savings. It doesn't work that way. Your home is a place to live. You need to save money on top of that. Imagine the real economic growth we could have had if instead of speculating on real estate people would have taken that money and invested it or saved it (and banks would therefore lend that out to businesses).
As for speculating in real estate, no different than people who foolishly pumped money into the internet bubble and lost a small fortune.
Agree that people need to save money on top of everything else. But for 60 some years a pension/401k and your house provided quite a nest egg, and both got slaughtered in the financial meltdown. And the fact of the matter is that was a global crisis, nor was it the first housing bubble in history, much less the first bubble. The global economy is completely geared toward growth, and it's extremely difficult, if not impossible, to have growth in a deflationary environment. -
HitsRus
That's all fine and good if you have a decent IQ and a decent education. The realistic truth is that there are a lot of people who have neither the intelligence the education or the sophistication to plan for their own future. Moreover, even reasonably intelligent people get taken for a ride by investment hucksters. To blatanly generalize that grandma is a mooch is not accurate. People who have paid into SSI were given a promise from the governmnet. The problem is not so much with having a safety net for retirees, but in how the government sells it. (speaking of "hucksters")..... I have no problem with Social security remaining a 'pay as you go' system as long as it's sold that way. Further, for the more sophisticated person who is capable of managing their investments, private retirement vehicles should be encouraged and facillitated.Grandma should have been wise and frugal and planning for that day. -
Cleveland Buck
Of course owning is better than renting, that wasn't the argument. The argument is that your house isn't a savings account. And growth is definitely possible in a deflationary environment. It won't always look like the GDP numbers look today that are inflated by government spending and printing money. In a free market prices go down when the economy grows and the money supply stays relatively constant. You could always look to our greatest period of economic growth from the 1870s to the 1890s where we were on the strictest gold standard of our history, prices fell but the economy boomed.gut;913050 wrote:You come out ahead paying a mortgage vs. paying rent in the long-run. Doesn't matter if the home value drops 50%, 50% of a big number is a hell of a lot more than 0.
As for speculating in real estate, no different than people who foolishly pumped money into the internet bubble and lost a small fortune.
Agree that people need to save money on top of everything else. But for 60 some years a pension/401k and your house provided quite a nest egg, and both got slaughtered in the financial meltdown. And the fact of the matter is that was a global crisis, nor was it the first housing bubble in history, much less the first bubble. The global economy is completely geared toward growth, and it's extremely difficult, if not impossible, to have growth in a deflationary environment. -
O-Trap
I didn't mean to imply that EVERYONE is a mooch. However, I know a TON of people who never finished high school and who are not what most would consider of a healthy intelligence. Even they are able to observe their surroundings, though. With as many free financial planning classes, as well as privately funded charities and services, I'd bet you'd see a LOT fewer being foolish with their finances. Programs like that are very much like a safety net below a highwire. If people aren't given it, fewer will walk that dangerous highwire.HitsRus;913095 wrote:That's all fine and good if you have a decent IQ and a decent education. The realistic truth is that there are a lot of people who have neither the intelligence the education or the sophistication to plan for their own future. Moreover, even reasonably intelligent people get taken for a ride by investment hucksters. To blatanly generalize that grandma is a mooch is not accurate. People who have paid into SSI were given a promise from the governmnet. The problem is not so much with having a safety net for retirees, but in how the government sells it. (speaking of "hucksters")..... I have no problem with Social security remaining a 'pay as you go' system as long as it's sold that way. Further, for the more sophisticated person who is capable of managing their investments, private retirement vehicles should be encouraged and facillitated.
But as I said, I'm very aware that things like prolonged, unforseen medical expenses or investment swindlers exist that play into it, but if the safety net didn't exist, I'd wager that those instances would be few enough that charitable and privately funded non-profit organizations would be enough.
And this may be the most heartless part, but it is not my civic obligation to help even if it was through nobody's fault. I do think it's my MORAL obligation, but as with the Moral Majority back in the,'90s, I'm not all that comfortable with Federal government enforcing moral behavior. -
bigdaddy2003
It seems as if Herman Cain may be picking up some momentum. I hope it lasts. -
I Wear Pants
A high wire without a safety net is pretty obviously dangerous. But we're talking about stupid people so I don't think poor money management is nearly that clear of a danger to them. They don't understand enough to realize what they're doing is dumb.O-Trap;913163 wrote:I didn't mean to imply that EVERYONE is a mooch. However, I know a TON of people who never finished high school and who are not what most would consider of a healthy intelligence. Even they are able to observe their surroundings, though. With as many free financial planning classes, as well as privately funded charities and services, I'd bet you'd see a LOT fewer being foolish with their finances. Programs like that are very much like a safety net below a highwire. If people aren't given it, fewer will walk that dangerous highwire.
But as I said, I'm very aware that things like prolonged, unforseen medical expenses or investment swindlers exist that play into it, but if the safety net didn't exist, I'd wager that those instances would be few enough that charitable and privately funded non-profit organizations would be enough.
And this may be the most heartless part, but it is not my civic obligation to help even if it was through nobody's fault. I do think it's my MORAL obligation, but as with the Moral Majority back in the,'90s, I'm not all that comfortable with Federal government enforcing moral behavior. -
gut
That really doesn't appreciate how much the economy and financial system are geared towards growth (as in RETURN). In a deflationary environment, there's a positive return to stuffing money under the mattress, which actually works to drive up the cost of capital since the riskless return (even more riskless than treasuries) is now not only no longer negative, but positive.Cleveland Buck;913111 wrote:Of course owning is better than renting, that wasn't the argument. The argument is that your house isn't a savings account. And growth is definitely possible in a deflationary environment. It won't always look like the GDP numbers look today that are inflated by government spending and printing money. In a free market prices go down when the economy grows and the money supply stays relatively constant. You could always look to our greatest period of economic growth from the 1870s to the 1890s where we were on the strictest gold standard of our history, prices fell but the economy boomed.
Also, wages tend to be sticky, at least in the short-run. So when prices start falling, the company has a hell of a time cutting wages which would be necessary for them to continue growing the bottom line in deflation. That's the problem with why deflation is so pesky for growth, because nearly all costs are sticky, if not at least semi-fixed. So prices fall, then profits take a hit and that's counter-growth. There's only so much you can make-up on volume, not mention capacity constraints.
We've already seen one-side of the negative consequences of artificial manipulation of supply of capital leading to excessive risk-taking. The opposite-end where shortage of capital in a fixed money supply arbitrarily drives the cost of capital very high is arguably worse and is definitely counter-growth. The theory of wages and input costs falling to offset that is nice for the classroom, but fails in the real world. Just the TIME of transferring capital (much less finding it) for investment alone becomes a huge drag. -
gut
So one person pays $1000 a month in rent, and the other pays a $1000 a month mortgage on a $200k house. 30 years down the road, the former has nothing to show for his $1000 and the latter has $200k, probably more at least at the rate of inflation. So where did the money come from then?Cleveland Buck;913111 wrote:Of course owning is better than renting, that wasn't the argument. The argument is that your house isn't a savings account. -
O-Trap
I'd be curious who these people are. I mean, I live in an area with a lot of high school drop outs and people many would consider less intelligent, but I don't know a single one who can't comprehend the idea of putting some of their paycheck aside for when they're too old to work.I Wear Pants;913201 wrote:A high wire without a safety net is pretty obviously dangerous. But we're talking about stupid people so I don't think poor money management is nearly that clear of a danger to them. They don't understand enough to realize what they're doing is dumb.
Now, if we're dealing with those with mental disabilities, that's another matter, but I've yet to meet a person who is not handicapped, yet is also incapable of understanding that they'll need money in order to live, even after they work. Where are these people?
Yet again, even as such people may or may not exist, why do they have an inherent right to live off those in the community? -
majorspark
Zogby poll.bigdaddy2003;913169 wrote:It seems as if Herman Cain may be picking up some momentum. I hope it lasts.
A new Zogby poll puts Herman Cain​ at the top of the Republican field, as the top choice of 28% of poll respondents. (IBOPE Zogby International says the polling sample consists of “all likely voters and of likely Republican primary voters.”
Rounding out the top three are Rick Perry at 18%, and Mitt Romney at 17%. Fourth place goes to Ron Paul at 11%. Paul’s the most solid performer in Zogby’s polling history for the 2012 GOP race – his 11% might as well be chiseled in stone.
A new Zogby poll puts Herman Cain​ at the top of the Republican field, as the top choice of 28% of poll respondents. (IBOPE Zogby International says the polling sample consists of “all likely voters and of likely Republican primary voters.”
Rounding out the top three are Rick Perry at 18%, and Mitt Romney at 17%. Fourth place goes to Ron Paul at 11%. Paul’s the most solid performer in Zogby’s polling history for the 2012 GOP race – his 11% might as well be chiseled in stone.
http://www.humanevents.com/article.php?id=46473 -
gut
That used to be the mentality in America, but somewhere along the line we developed this national consciousness that some [many] people simply are incapable of helping themselves. You make a great point that a lot of that money wasted by the govt would probably find it's way to charities to help people falling through the cracks. But somewhere along the line govt got this idea that in order to save everyone, helping 10 people who could make it on their own if forced for every 1 person who can't is somehow an acceptable cost.O-Trap;913163 wrote:I didn't mean to imply that EVERYONE is a mooch. However, I know a TON of people who never finished high school and who are not what most would consider of a healthy intelligence. Even they are able to observe their surroundings, though. With as many free financial planning classes, as well as privately funded charities and services, I'd bet you'd see a LOT fewer being foolish with their finances. Programs like that are very much like a safety net below a highwire. If people aren't given it, fewer will walk that dangerous highwire.
The theory of incentives to work and so on are a bit esoteric and academic, but you can't help but look at Europe and even the US (where improvements in the standard of living have fallen off a cliff, and this is now the first generation, I think, that will be worse off than their parents) and see the academic theory in practice.
The problem as I see it is socialism is not remotely pro-growth. Giving money to people who piss it away is no different than lending money to bad business plans or poorly run companies - the latter is a failing strategy (and so is the former, though not so readily apparent). I'm almost going to favor national health care here, but it's an example of of social service which could be pro growth with everyone paying and it reducing costs for businesses. Another example could be free energy (electricity and natural gas to homes). When handouts and services are very disproportionately used you end-up with extremely costly programs that aren't robust enough to help foster growth. Subsidize resources that everyone can use and benefit from - including businesses - and then you foster growth. Giving a crack whore a welfare check, not so much. -
gut
It tends to hit home when it's too late, staring down the barrel of retirement in 15-20 years with no savings to speak of. I've seen college educated kids, right out of school, who don't even contribute enough to get the company 401k match.O-Trap;913211 wrote:I'd be curious who these people are. I mean, I live in an area with a lot of high school drop outs and people many would consider less intelligent, but I don't know a single one who can't comprehend the idea of putting some of their paycheck aside for when they're too old to work.
A big part of the problem is just a lack of discipline and the new American dream of living beyond one's means. People just don't understand frugality and planning decades ahead for retirement. They buy too much house, they buy (or worse, lease) a new car....expensive cell phones (and saw research recently that many have more plan than they need) and cable bills....Going for the 50" tv when they really should save a few hundred bucks and get the 37" (and an off brand). It goes on and on. It's a mentality that a few hundred bucks doesn't get them anywhere and an inability to recognize that $10-$20 here and there across hundreds of transactions adds up. -
O-Trap
I wonder how doable it would be to compare the number of people who went hungry in their senior years prior to Social Security compared to today. Given inflation and the arbitrary view of what the "poverty line" actually is, that might be difficult, but I'd still be interested if it could be done.
-
Cleveland Buck
If our economy is so geared up to inflated prices and returns in the financial sector, and I agree that it is, then that should change. It's not like we have a productive economy. That is the reason we are in this mess in the first place. The financial industry needs to be contracted and resources in the economy allocated where they can be productive again.gut;913205 wrote:That really doesn't appreciate how much the economy and financial system are geared towards growth (as in RETURN). In a deflationary environment, there's a positive return to stuffing money under the mattress, which actually works to drive up the cost of capital since the riskless return (even more riskless than treasuries) is now not only no longer negative, but positive.
As far as people stuffing money under their mattress, in a free market the behavior of people always tell business what it needs to know to meet their needs. If people were hoarding their cash under their beds and not in banks, then interest rates would increase to the point where the economy would go into a recession forcing those people to spend their hoards of money. The chances of that happening are slim though. In an ideal economy prices fall because productivity increases and the money supply remains relatively unchanged. I'm not talking about prices falling off of a cliff though where you think you can get rich by putting $10 under your pillow and leaving it there.
Yes the transition from a centrally planned economy to a free market economy would suck. Wages would be too high for a while, that's why we would have an instant crash in our economy if we tried to do it. After a couple of years though, these things get worked out, as long as the government doesn't interfere. Wages would eventually fall where they had to and people would get back to work.gut;913205 wrote: Also, wages tend to be sticky, at least in the short-run. So when prices start falling, the company has a hell of a time cutting wages which would be necessary for them to continue growing the bottom line in deflation. That's the problem with why deflation is so pesky for growth, because nearly all costs are sticky, if not at least semi-fixed. So prices fall, then profits take a hit and that's counter-growth. There's only so much you can make-up on volume, not mention capacity constraints.
The cost of capital is high when people are spending their money, which means business should be investing their cash on the lower end production processes like getting their products to the stores and what not. The cost of capital is low when people are not spending their money and they are saving it, which means business can go ahead and borrow to invest in longer term processes like R&D and adding capital goods for increasing production when they are ready to do so. The economy isn't supposed to be in constant overdrive both producing and consuming non stop. I don't know how you come up with that this fails in the real world. It has never been tried. The closest would be the industrial revolution in the United States.gut;913205 wrote: We've already seen one-side of the negative consequences of artificial manipulation of supply of capital leading to excessive risk-taking. The opposite-end where shortage of capital in a fixed money supply arbitrarily drives the cost of capital very high is arguably worse and is definitely counter-growth. The theory of wages and input costs falling to offset that is nice for the classroom, but fails in the real world. Just the TIME of transferring capital (much less finding it) for investment alone becomes a huge drag.