Why Congress Must Stop The Money Pumping At The Fed

Discussion in 'Economics' started by libertad, Jan 6, 2009.

  1. http://mises.org/story/3279

    One can think of it this way.....

    If money pumping was a solution, there would be no
    poor countries....
  2. wave


    False lifestyles, false economy in the USA. See now they can pump all the $ they want and lower the FICOs to entice, but the former spenders are reformed and not buying and those that can (wealthier, upper FICOs) don't use credit. See where we are going?
  3. Not only are former spenders "reformed", they are acknowledged to be the high-default risk which they are. Even if they want to return to spendthrift ways, lenders will deny them credit.

    NObama and everybody else wants to "re-energize" the economy... to find the "catalyst". Of course they do... maintaning Gummint tax receipts depend upon it.

    But I think you're right. America is not now nor will be again (at least until the Boomers die off), in "growth" mode. The apparent "prosperity" of recent years was really only an excessive-credit flim-flam.

    We'll just be maintaining. The Gummint will take money away from the "haves" and give it to the "have nots" to spend... then the economy will "look" like it's doing better... but it'll really only be "balance sheet shuffling and illusion".

  4. Well said.
  5. So.... does that mean.... Now that the USA is running the money pump at full blast that we too will soon be poor?

    Historically, that's EXACTLY what it has meant.... though "soon" is highly variable.
  6. I don't think we'll be maintaining. To maintain, production has to keep pace with population growth. With government spending crowding out private investment and the zealous desire by the boomers to use government to rob their children to pay for the lifestyle to which they have become accustomed, what exactly is the incentive to invest and produce when it's so much easier to stick your hand out and demonstrate need? Government has made it pretty clear that gambling and laziness will be rewarded while prudence, investment and hard work will be punished. I don't think there's enough incentive to invest and work enough even to "maintain" current production and our current lifestyle. For my entire life, people around the world have wanted to immigrate to the United States. I wonder if in my lifetime we'll see net immigration FROM the United States as the smart, prudent and motivated seek greener pastures where they won't be robbed.
  7. I should have said, "maintaining at best".

    Say, with all the Gummint work projects NObama has in mind for currently unemployeds.... won't they all become Gummint employees? To have their health care and retirement needs met by the private sector?

    BTW... I don't share your view about "boomers using government to rob their children to maintain lifestyle..." I don't have the sense that hardly any of us have that in mind. True, future generations are being robbed... but it's GUMMINT doing it for their own greed and desire to overspend, not Boomers "demanding it".

    The only generation who is going to "make out" on Social Security and Medicare is the one currently retired. We Boomers are going to get HOSED when it comes our time... future generations are going to be DOUBLE HOSED...
  8. Being responsible living within your means and saving will get you know were these days.

    What will get you places is be irresponsible spending every penny you have. Why save you get no return. Why let someone manage your money when all they do is steal it, or stop you from getting it back by throwing up a withdrawal wall.

  9. In banking.....prospective future asset valuations are key....
    ie If there is a convincing case that asset valuations will increase....then they will loan....

    Tax takes away from valuation....net revenue adds to valuation....

    Also interest rates are so low.....there will be no long term debt committments....only rolling type MM committments....

    Thus the focus should be on pulling out all the stops to aid valuations....which means structural change....such as a 10% consumption tax....and a better, more wipespread stock exchange that offers proper regulation.....

    The $Trillions in losses would have a long time recovery period in rolling over short term debt..... whereas stocks can increase valuation prices considerably....and these stocks will be rising because of productivity.....
  10. Shagi


    Printing money always has severe consequences - be it Germany in the 1930's, Latin America in the 1980's, Zimababwe in the 1990's and USA you will see results next 5 years
    #10     Jan 6, 2009