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Disgusted with obama administration - Part II

  • gut
    BoatShoes;1504513 wrote:... $200 trillion plus in real assets and growing every year. etc. etc. etc.
    Which includes, what, $130T in oil and gas rights? That would be quite the dilemma for a liberal to face cashing in.
  • BoatShoes
    gut;1504540 wrote:You're playing semantics. Technically we can't be insolvent because we can just print money. But harping on it makes you look completely ignorant to the challenges and risks that the statement alludes to. And in typical liberal fashion you dodge the real issue. You've bought into the free lunch "new paradigm", and it's ridiculous because it's a bedrock economic principle that there is no free lunch. You simply choose not to see all the structural stresses building in the economy and how it is hurting growth. And it's only highlighted by the horribly misguided faith you have in some obscure and extraordinary policy responses that we just flip a swtich on to fix it when the shit hits the fan.

    But you're not worth debating. You don't even understand the fed funds rate and how it works. You're incapable of debating secondary, tertiary and long-term effects when you can't even grasp the fundamentals.
    It is important to harp on it because you have QuakerOats and the entire conservative movement saying that we're broke, insolvent, on the path to fiscal ruin. All of those phrases are inapplicable. The issue is....off into the future we have large commitments of real resources to the public purpose...i.e. real resources devoted to the medical and health needs of seniors and to retirees who aren't working/being productive any more....is this desirable in a real sense? That is the debate.

    It is not a claim of a free lunch as long as there is real production to be had. If there is no real production to be gained then you are right. As of right now there's lots of real production to be had.

    We're not anywhere close to the shit hitting the fan based on what you probably consider the shit hitting the fan. In fact we're already there in a real sense....losing billions of dollars of wealth and production day after day and month after month letting our economy run below potential. All we'd need to do is a sufficiently large tax cut w/o offsetting spending cuts. You're a conservative and you don't trust government crediting of bank accounts??? 10% cut in the marginal tax rate for everyone (not the most efficient cus of saving by higher earners but let's just do it for arguments sake because this is the standard conservative favorite). The real waste is in letting all of that output and wealth that we could have fail to materialize; letting entrepreneurs face uphill battles that are unnecessary.

    It is you who don't apparently understand the Fed Funds Rate works in our fiat monetary system. Consider the following:

    Suppose Congress buys a Fighter Plane from Boeing. Treasury spends$1 billion by crediting Wells Fargo's reserve account at the San Francisco FED by $1 billion. and then makes a call on a TTL account a JP morgan Chase in the amount by $1 billion because the government is running a balanced budget. In this scenario you have a net reserve add and a reserve drain. There are no excess reserves in the banking system.

    Spending by the government adds reserves to the banking system. Taxing and Bond Sales by the Government Drain Reserves from the banking system. When the government deficit spends, that is they spend more than they tax....if there is no bond sale...there will be a credit to a member bank's account without a corresponding debit elsewhere to match the resulting in excess reserves in the banking system. In this event...supposing that there is no interest rate paid on reserves...the overnight rate is bid down to zero. The Interbank Competition cannot eliminate the excess reserves in the banking system no matter how hard they try.

    That is why, if the FED is going to have a target rate and we're going to have a budget deficit...that is spend more than we tax and therefore create more reserves than we drain with calls on TTL accounts, you need a bond issuance by the treasury because the bond sale has the same effect of a call on a TTL account by draining reserves in the same amount that were credited by the deficit spending...and thus not putting downward pressure on the overnight rate and allowing the FED to hit its target rate.

    This is how it actually works in our monetary system. I challenge you to provide evidence that it does not. Why would the rate not go to zero in the event that there are excess reserves and the FED/Tsy do nothing to drain them since the FED isn't trying to hit an interest rate target?
  • BoatShoes
    If there are excess reserves in the banking system, no bank needs them and if a bank that is below its reserve requirement through competition you're going to have downward pressure until the rate goes to zero.
  • BoatShoes
    QuakerOats;1504537 wrote:Put the unfunded liabilities on the effing spreadsheet, just like we have to. Sell the assets, fund the liabilities; otherwise your are indeed insolvent, already. Only a liberal would look at decades of deficits, 75 TRILLION dollars of unfunded liabilities, and a handy new $7 trillion in debt from the imposter in the WH, and act as if all is well in the world. Is the liberal mind that genetically different, and deficient?
    Go ahead do it. And, while we're at it, Congress can instruct the FED to credit the Treasury General Account in the same amount, just like it did for banks during the financial crisis.

    [video=youtube;My-fLLCKr2g][/video]

    The question is about real resources in our economy. Can the people, firms and natural resources within our country meet these future commitments to the elderly? Unequivocally yes. Is it desirable? That is a political question.
  • BoatShoes
    gut;1504541 wrote:Which includes, what, $130T in oil and gas rights? That would be quite the dilemma for a liberal to face cashing in.
    A good thing you point that out. Let's imagine a world wherein the Secretary of the Interior traded Oil & Gas rights to people who own treasury securities. Suddenly now because large amounts of treasury securities are "A drag on growth" do we suddenly have strong economic growth as the "drag" is removed because the U.S. government has no outstanding treasury securities????
  • gut
    BoatShoes;1504593 wrote:A good thing you point that out. Let's imagine a world wherein the Secretary of the Interior traded Oil & Gas rights to people who own treasury securities. Suddenly now because large amounts of treasury securities are "A drag on growth" do we suddenly have strong economic growth as the "drag" is removed because the U.S. government has no outstanding treasury securities????
    LMAO....I'm just going to save myself some time and say you're clueless, because you always are.

    When you can explain, or show, where you came up with a 0 laissez faire fed funds rate...until then you belong in the kiddie corner with the people who haven' learned anything about economics yet.
  • BoatShoes
    gut;1504615 wrote:LMAO....I'm just going to save myself some time and say you're clueless, because you always are.

    When you can explain, or show, where you came up with a 0 laissez faire fed funds rate...until then you belong in the kiddie corner with the people who haven' learned anything about economics yet.
    When there are excess reserves in the banking system and they are not drained because of taxes or a bond sale the rate goes to zero.

    You can see it all described by staff at the New York Fed here if you're so inclined.

    http://www.newyorkfed.org/research/staff_reports/sr337.pdf
  • QuakerOats
    change alright ..........and no hope ...

    http://www.washingtonpost.com/business/economy/us-disability-rolls-swell-in-a-rough-economy/2013/09/20/a791915c-1575-11e3-804b-d3a1a3a18f2c_print.html
  • gut
    BoatShoes;1504621 wrote:When there are excess reserves in the banking system and they are not drained because of taxes or a bond sale the rate goes to zero.

    You can see it all described by staff at the New York Fed here if you're so inclined.

    http://www.newyorkfed.org/research/staff_reports/sr337.pdf
    You are flat out wrong. Once again, you've apparently misunderstood something you claim to have read (which has become an alarming trend for you).

    The fed funds rate is what banks charge each other on overnight deposits. Your insistence that the non-interventionist rate would be zero implies either a world of negative real interest rates and/or a 0% cost of capital and default risk.

    You just refuse to understand how it actually works. The banks charge each other a rate (LIBOR is an estimate in London). The fed intervenes to move that rate toward a target, which the retail rate will follow. This means what banks charge each other represents a haircut on retail rates (it may not even be a haircut in the technical sense, but simply reflective of risk and time).

    Thus your arguing that this rate is 0 without fed intervention is simply ignorant. From your paper:
    "At least conceptually, nothing prevents a central bank from targeting and implementing an interest rate of zero in the overnight market"

    Now, why would it be CONCEPTUAL that a bank could TARGET an overnight rate of 0? Do you not see how that shits all over your argument the rate would be 0 if the fed did nothing? There is absolutely nothing laissez-faire about what is required to achieve a 0 fed funds rate. 0% is not a non-interventionist form in any shape or form. It requires supplying a massive amount of reserves, and an assumption of default and basis risk (in other words, a ginormous subsidy and market distortion).
  • IggyPride00
    The most important red line of Barack Obama’s presidency was scrawled hastily in January 2007, a few weeks before he even announced he was running for president.

    Soon-to-be-candidate Obama, then an Illinois senator, was thinking about turning down an invitation to speak at a big health care conference sponsored by the progressive group Families USA, when two aides, Robert Gibbs and Jon Favreau, hit on an idea that would make him appear more prepared and committed than he actually was at the moment.


    Why not just announce his intention to pass universal health care by the end of his first term?


    Thus was born Obamacare, a check-the-box, news-cycle expedient that would ultimately define a president.

    “We needed something to say,” recalled one of the advisers involved in the discussion. “I can’t tell you how little thought was given to that thought other than it sounded good. So they just kind of hatched it on their own. It just happened. It wasn’t like a deep strategic conversation.”

    [LEFT]
    Read more: http://www.politico.com/story/2013/09/obama-health-care-conversion-obamacare-97185.html#ixzz2fjfy8KjE
    [/LEFT]
    From a Politico article this morning. Obamacare was born because he needed something to say at a healthcare convention.

    You can't make this stuff up.
  • BoatShoes
    gut;1504956 wrote: It requires supplying a massive amount of reserves, and an assumption of default and basis risk (in other words, a ginormous subsidy and market distortion).

    And there is it s right there. You provide the answer yourself. Where do new reserves come from in the absence of FED OMO's...when the FED is laissez-faire...from deficit spending. When the government deficit spends it adds new reserves to the banking system. To take from the FED staff in its hypothetical about an intraday market "The FED would have to supply enough reserves so the rate is close to zero". What they're saying is excess reserves...which is exactly what happens when the government deficit spends.

    So, again, in the event of government deficit spending, if there is no reserve drain....the rate goes to zero...as you seem to acknowledge when you say "It requires supplying a massive amount of reserves." That is what happens when the government deficit spends...it adds new reserves to the banking system. Currently we're required to issue treasury securities and those bond sales drain the same amount of reserves as are added with the deficit spending. It is the treasury/deficit spending that adds the new reserves and if the FED just sits there and doesn't drain them to hit a target rate...otherwise known as "laissez-faire"/hands-off...the rate goes to zero.
  • gut
    BoatShoes;1506092 wrote:...otherwise known as "laissez-faire"/hands-off...the rate goes to zero.
    Oh, that explains it. You don't understand laissez-faire. It's the OPPOSITE of govt intervention to manipulate and distort markets, which is precisely what you are proposing.

    Although I suppose in the liberal world perhaps laissez-faire means MORE govt to counteract the negative effects of govt.
  • QuakerOats
    gut;1506118 wrote:Although I suppose in the liberal world perhaps laissez-faire means MORE govt to counteract the negative effects of govt.
    No doubt; it is a twisted world they reside in.


    PS -- Lois 'the bitch' Lerner retired from the IRS today; I look forward to the day she loses the taxpayer-funded pension.
  • BoatShoes
    gut;1506118 wrote:Oh, that explains it. You don't understand laissez-faire. It's the OPPOSITE of govt intervention to manipulate and distort markets, which is precisely what you are proposing.

    Although I suppose in the liberal world perhaps laissez-faire means MORE govt to counteract the negative effects of govt.
    Now, now, now....what did I say? I was talking about if the FED was laissez-faire lol. i.e. didn't do OMO's...no target rate...and you disputed that.

    I said if the FED was hands off/laissez-faire in the event of government deficit spending....there would be excess reserves in the banking system and the rate would go to zero. You disputed that claim but that is exactly what happens.

    Hence the point...back to what we we're originally talking about....it is silly to say a FED Funds Rate of zero is "artificial" as that is exactly what would happen the majority of the time if the FED did nothing as the government continually spends more than it taxes...in other words... adds more reserves to the banking system than it drains.
  • gut
    BoatShoes;1506145 wrote:Now, now, now....what did I say? I was talking about if the FED was laissez-faire lol. i.e. didn't do OMO's...no target rate...and you disputed that.
    Yes, and you were and continue to be 100% wrong. The fed funds rate would not be 0 in that scenario. You don't understand how it all works and are confusing a misunderstanding of multiple concepts. 0% is not a natural rate, and achieving such a rate would require continuous and massive fed intervention.

    I'm done debating this. Everything you've said in this exchange continues to be wrong and/or irrelevant.
  • BoatShoes
    gut;1506196 wrote:Yes, and you were and continue to be 100% wrong. The fed funds rate would not be 0 in that scenario. You don't understand how it all works and are confusing a misunderstanding of multiple concepts. 0% is not a natural rate, and achieving such a rate would require continuous and massive fed intervention.

    I'm done debating this. Everything you've said in this exchange continues to be wrong and/or irrelevant.
    Do you agree that with excess reserves (you called them a massive amount of reserves) the rate goes to zero or, if the FED pays interest on reserves, it will fall to the interest rate on reserves, if there is no subsequent, further action taken to drain those reserves? You indicated as much in your earlier post.
  • QuakerOats


    REPORT: IRS head to keep annual pension worth more than $50,000...



    Criminal
  • BGFalcons82
    Unfortunately, it isn't criminal when the POTUS and Att'y General are complicit and refuse to uphold laws when it's in their interests. She did her duty to quell the 2010 TEA Party uprising by successfully defunding many of them. To the Obamabots, she's just a foot soldier who did her job. "What difference does it make, anyway?"
  • QuakerOats
    obama will negotiate with Iran, Syria, and North Korea, but he will not negotiate with republicans who stand with the majority of Americans regarding obamaKare.


    We have elected the enemy!
  • gut
    BGFalcons82;1506444 wrote:Unfortunately, it isn't criminal when...
    What bothers me is she's been collecting her paycheck on administrative leave for how many months now? And now that it's come to light she likely is guilty of multiple fireable offenses...not to mention lying to Congress...she's going to retire and keep her pension and benefits.

    And THAT, my friends, is how you legally bribe a witness.
  • QuakerOats
    Rare footage of the young Ben Bernanke (or is it Boatshoes):
  • QuakerOats
    http://www.bloomberg.com/news/2013-09-26/americans-reject-by-61-obama-demand-for-clean-debt-vote.html
  • gut
  • QuakerOats
    President Raises Debt Ceiling Seven Times, Costing $43,000 Per Household...


    Treasonous
  • IggyPride00
    Senior White House adviser Dan Pfeiffer signaled the tone of the standoff on Thursday, telling CNN’s Jake Tapper, “What we’re not for is negotiating with people with a bomb strapped to their chest.” For good measure, he called the Republicans’ list of conditions for raising the debt ceiling “ransom demands” and added, “It’s not a negotiation if I show up at your house and say, ‘Give me everything inside or I’m going to burn it down.’”
    I have never seen a White House openly mock the opposition party to the degree this White House is the Republicans right now.

    They are literally laughing at them and making on the record comments likening them to suicide bombers.

    I guess this is the Chicago way of doing business.