Trump SAVES 1000 Carrier Jobs!....

[tod evans]

Its implied in the 60 million deficit of capitol that the business is already budgeting on the up coming fiscal year and whatever Trump promised them for creating this headline for them, they will get. I Like you said though this is geopolitics as usual, it's nothing out of the ordinary.

Hugh?

Whachu say Willis?

 

[Suzanimal]

You're not supposed to focus on honest use of language and proper terminology, let alone the ideas expressed clearly and succinctly......

Its implied in the 60 million deficit of capitol that the business is already budgeting on the up coming fiscal year and whatever Trump promised them for creating this headline for them, they will get. I Like you said though this is geopolitics as usual, it's nothing out of the ordinary.

Hugh?

Whachu say Willis?

 

[Dr.No.]

Then the conversation is completely moot, is it not? Why run a deficit at all or even consider taxing individuals when they can just print all the money they need. Surely it would be less troublesome to just open a state bank and pay interest on deposits than it is to make individuals, corporations, and banks convert their money into bonds to accomplish the same. Why add the extra step? Talking about smoke filled rooms.....

Why does anyone pay taxes if the government can print its own? If the government collects tax for other reasons then what are they? Are they to pick winners and losers?

1) If the government runs deficits that are too large, it will result in inflation. For example, let us say there was full employment. If the government then put in an order for 100 billion in military equipment, the economy would have to "find" labor in order to make that equipment. This would ultimately lead to them "poaching" employment from someone else. That would mean that one segment of the economy would show a loss of productivity while the military side would go up. Production stays the same, but money (demand) goes up. Hence, inflation.

2) So, the government taxes so that it can spend more on essential services. For example, the government may be able to run a trillion dollar deficit without inflation. But they need to spend much more than 1 trillion to fund their projects. They can get that extra spending power and not cause inflation via taxation. Which is why we should want to generally reduce what government does, and let the private sector handle what it can.

3) Private banks are needed so that private banks can expand the money supply in an endogenous, logical, and careful way. We don't want government to be involved in deciding who is creditworthy or not. At the same time, the government likes to put upward pressure on the interest rate. When the government runs deficits, it net adds financial assets to the private sector. These primarily show up on the books of the member banks of the Fed, in the form of assets in their accounts at the Fed...or, as reserves. Reserves are the currency of the banking system...they can use them to fill reserve requirements (which are paltry), meet cash demand, and as a liquidity hold against their obligations. So when banks increase their obligations (ie, make loans), they like to have a certain amount of reserves to stay "liquid". But, as the government continues to run deficits, the reserves stockpiles get bigger and bigger. At some point, the banks have enough liquidity...and interest rates head toward zero. Knowing that they will always be able to meet their liquidity obligations with no penalties, the cost of money heads towards zero. So, the Federal Government offers debt to the public. When individuals, corporations, and banks buy this debt, they are essentially writing checks to the federal government. To fulfill those checks, the banks have to transfer the reserves back to the government. This drains reserves from the system, and makes the cost of money go upwards. Now, when banks make loans, they have to figure that they'll need to hold more reserves as a liquidity reservoir, and give up on any money they could have gotten from sticking those reserves in a bond.

If it helps you understand this, this is why the Federal Reserve started paying interest on reserve balances. With QE, the banks's reserve balances swelled; the short-term interest rate headed towards zero. The Fed started paying interest on reserves to keep a lower cap on the interest rate.

 

[nikcers]

Hugh?

Whachu say Willis?

Companies budget their spending for the next fiscal year in November when he made that deal with Trump they signaled a bigger deal with their parent company. Trump wants to rebuild our military advantage over China. China's rebuke to Trump was not for talking to Taiwan, it was signaling Trump to back off. My guess this was his plan all along, Russia isn't at all glad that China helped us tank fossil fuel prices by selling solar panels for pennies on the dollar.

 

[Krugminator2]

1) Crowding out theory specifically holds that interest rates will rise as government debt rises, due to the crowding out of funds. That hasn't happened at all.

Actually that isn't true. Bonds have plunged since Trump was elected in anticipation of crowding out from increased government spending.

Rates haven't risen during Obama because 1) He really hasn't been a budget buster since the initial stimulus is passed. And gov't employment has been flat since 2010. 2) In a credit collapse people are paying down debt instead of investing and unemployment rises to unusually high levels. It takes more government spending to have a crowding out effect because you have more unemployed people.

 

[Dr.No.]

Actually that isn't true. Bonds have plunged since Trump was elected in anticipation of crowding out from increased government spending.

Rates haven't risen during Obama because 1) He really hasn't been a budget buster since the initial stimulus is passed. And gov't employment has been flat since 2010. 2) In a credit collapse people are paying down debt instead of investing and unemployment rises to unusually high levels. It takes more government spending to have a crowding out effect because you have more unemployed people.

Yeah, there's always an excuse. I suspect that bonds have "plunged" because people expect interest rates to go up. We'll see what happens when rubber meets the road.

Why didn't bonds go down during Obama's stimulus? If people are paying down debt, they still have less money to invest in government bonds, according to crowding out theory. So wouldn't bonds go down and yields go up? It would make sense to say that there were "fewer investment options" (hence more unemployed people), but it doesn't make sense to say that debt was being paid off yet there were still plenty funds available to go into government bonds.

 

[nikcers]

Yeah, there's always an excuse. I suspect that bonds have "plunged" because people expect interest rates to go up. We'll see what happens when rubber meets the road.

Why didn't bonds go down during Obama's stimulus? If people are paying down debt, they still have less money to invest in government bonds, according to crowding out theory. So wouldn't bonds go down and yields go up? It would make sense to say that there were "fewer investment options" (hence more unemployed people), but it doesn't make sense to say that debt was being paid off yet there were still plenty funds available to go into government bonds.

Look if you aren't willing to discuss the implications our foreign policy has on the dollar then we are having a dishonest discussion. You are essentially just having a fallacious argument with yourself.

 

[Krugminator2]

You're not supposed to focus on honest use of language and proper terminology, let alone the ideas expressed clearly and succinctly......

Except Ron is wrong. Setting aside the Carrier deal, finding loopholes in general to decrease taxes for any reason isn't a good idea for numerous reasons. Ron is of the belief that if you decrease taxes government will have less money to spend therefore government will shrink. That sounds goods. Milton Friedman believed that. Walter Block thinks like that. But it is clearly wrong.

Government doesn't need taxes to fund itself with a printing press. What happens in reality, decreased taxes paradoxically increase government spending. Decreased taxes means the pain of government spending isn't felt as acutely from taxpayers. Spending actually goes up because there are no direct consequences to the increased spending . A libertarian economist name Bill Niskanen who used to run the Cato Institute did a study on this. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.578.3954&rep=rep1&type=pdf

The other problem with loopholes is they don't change incentives in the same way an across the board cut does. The encourage rent seeking and lobbying. The don't change incentives across the board to produce more. As far as the tax credits that Ron endorsed in the video, Keynesians like them. Free market people should not.

 

[Krugminator2]

Yeah, there's always an excuse. I suspect that bonds have "plunged" because people expect interest rates to go up. We'll see what happens when rubber meets the road.

Why didn't bonds go down during Obama's stimulus? If people are paying down debt, they still have less money to invest in government bonds, according to crowding out theory. So wouldn't bonds go down and yields go up? It would make sense to say that there were "fewer investment options" (hence more unemployed people), but it doesn't make sense to say that debt was being paid off yet there were still plenty funds available to go into government bonds.

Not sure why you put plunged in scare quotes. Bonds have had a pretty large move (for bonds)since the election.

 

[Dr.No.]

Look if you aren't willing to discuss the implications our foreign policy has on the dollar then we are having a dishonest discussion. You are essentially just having a fallacious argument with yourself.

Do tell.

Not sure why you put plunged in scare quotes. Bonds have had a pretty large move (for bonds)since the election.

Maybe it is just precision of language. "Plunged" is a very strong word. But that is just a matter of language, and we can get beyond that. If you'd address my other points...

Government doesn't need taxes to fund itself with a printing press. What happens in reality, decreased taxes paradoxically increase government spending. Decreased taxes means the pain of government spending isn't felt as acutely from taxpayers. Spending actually goes up because there are no direct consequences to the increased spending . A libertarian economist name Bill Niskanen who used to run the Cato Institute did a study on this. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.578.3954&rep=rep1&type=pdf

Hmm, correlation does not equal causation. One could make the case that when receipts go down, unemployment is high, so those benefits kick in and government spending goes up. Or, when receipts go up, government is engaging in a policy of running smaller deficits or surpluses; hence it is a part of overall strategy.

 

[nikcers]

Do tell.



Maybe it is just precision of language. "Plunged" is a very strong word. But that is just a matter of language, and we can get beyond that. If you'd address my other points...

China's economy was supposed to crash, they started dumping bonds, and we started zero rating bonds to smooth out the stock market crash. China then proceeded to parade their fucking nukes on CCTV to celebrate winning world war 2. China has been dumping the treasuries ever since because there is a bubble. Instead of debating this we talked about Trumps dick, and then Trump even cancelled the last republican debate to give a speech to Israel. He didn't even win the primary till Indiana, who for some strange coincidence the Governor is now the fucking VP.

 

[Philmanoman]

The auto bail outs didn't offer huge tax breaks?
Did the bail out save millions of jobs?
What if all 1 million people went on unemployment instead?

Isn't it the same principles?

 

[nikcers]

The auto bail outs didn't offer huge tax breaks?
Did the bail out save millions of jobs?
What if all 1 million people went on unemployment instead?

Isn't it the same principles?

No they are different principles because its Trump and not Obama. Did anyone watch the very first presidential debate? Do you know what the very first question they hit Rand Paul on? Who are you going to talk to first, China or Russia? Are you guys still watching the MSM for news and don't know what's going on with our trade relations? Do you guys ever watch Ron Paul?

 

[Ender]

No they are different principles because its Trump and not Obama. Did anyone watch the very first presidential debate? Do you know what the very first question they hit Rand Paul on? Who are you going to talk to first, China or Russia? Are you guys still watching the MSM for news and don't know what's going on with our trade relations? Do you guys ever watch Ron Paul?

Like here?

http://www.ronpaulforums.com/showth...mp-amp-The-Carrier-Deal&p=6376483#post6376483

 

[Dr.No.]

China's economy was supposed to crash, they started dumping bonds, and we started zero rating bonds to smooth out the stock market crash. China then proceeded to parade their $#@!ing nukes on CCTV to celebrate winning world war 2. China has been dumping the treasuries ever since because there is a bubble. Instead of debating this we talked about Trumps dick, and then Trump even cancelled the last republican debate to give a speech to Israel. He didn't even win the primary till Indiana, who for some strange coincidence the Governor is now the $#@!ing VP.

China and other foreign central banks have started dumping US bonds in order to cover the flight of capital that has plagued their nations. IE, a credit crunch; they want to support the renminbi. China specifically has been trying to boost its foreign-exchange reserves, and as their government props up their own market, they are using US dollars to hedge their liquidity. There were willing buyers for whatever China was selling. Heck, China has moved on to dumping equities instead of treasuries. As oil prices have come down, Saudi Arabia, Russia, Qatar, UAE have been doing the same, selling a combination of their treasury holdings and their equity (stock) holding.

 

[nikcers]

China and other foreign central banks have started dumping US bonds in order to cover the flight of capital that has plagued their nations. IE, a credit crunch; they want to support the renminbi. China specifically has been trying to boost its foreign-exchange reserves, and as their government props up their own market, they are using US dollars to hedge their liquidity. There were willing buyers for whatever China was selling. Heck, China has moved on to dumping equities instead of treasuries. As oil prices have come down, Saudi Arabia, Russia, Qatar, UAE have been doing the same, selling a combination of their treasury holdings and their equity (stock) holding.

Okay so what's causing credit to crunch? Are we playing an international shell game with a lot of mal investment that is going to lead to world war 3 and China and Russia want us to take sides?

The maturity dates on zero coupon bonds are usually long term, with many having initial maturities of at least 10 years.
[TABLE="class: cbnewsitem-emission-details"]
[TR]
[TH][TABLE="class: cbnewsitem-emission-details"]
[TR]
[TH]Amount[/TH]
[TD]107,001,454,400 [/TD]
[/TR]
[/TABLE]

Settlement date[/TH]
[TD]08/27/2015 [/TD]
[/TR]
[TR]
[TH]Maturity date[/TH]
[TD]02/25/2016

[/TD]
[/TR]
[/TABLE]

 

[Zippyjuan]

China and other foreign central banks have started dumping US bonds in order to cover the flight of capital that has plagued their nations. IE, a credit crunch; they want to support the renminbi. China specifically has been trying to boost its foreign-exchange reserves, and as their government props up their own market, they are using US dollars to hedge their liquidity. There were willing buyers for whatever China was selling. Heck, China has moved on to dumping equities instead of treasuries. As oil prices have come down, Saudi Arabia, Russia, Qatar, UAE have been doing the same, selling a combination of their treasury holdings and their equity (stock) holding.

China has reduced foreign reserves a bit but is hardly "dumping". http://www.scmp.com/news/china/mone...-reserves-fall-more-expected-september-us188b

The mainland’s forex reserves, the world’s largest, shrank by US$18.8 billion to about US$3.166 trillion last month, according to data from the State Administration of Foreign Exchange.

Total reserves fell to below the US$3.18 trillion expected by economists polled by Reuters and Bloomberg.

September’s drop was small compared with overall reserves, but it was larger than a decline of US$15.89 billion in August and was the biggest in three months.

That is about one half of one percent.

But, the decline in reserves slowed this year as Beijing tightened capital controls and cracked down on suspicious forex trading, and China’s economic growth turned better than expected.

 

[nikcers]

China has reduced foreign reserves a bit but is hardly "dumping". http://www.scmp.com/news/china/mone...-reserves-fall-more-expected-september-us188b



That is about one half of one percent.

Yeah because our current adminstration has signaled that we were a one China nation, and we even acted like we were going to elect a one China president

 

[Dr.No.]

China has reduced foreign reserves a bit but is hardly "dumping". http://www.scmp.com/news/china/mone...-reserves-fall-more-expected-september-us188b



That is about one half of one percent.

Try going back more than one month. Sheesh, do you just parrot the recent articles? China's forex reserves have dropped by nearly a trillion in two years.

 

[Zippyjuan]

You didn't say two years ago. You said they "are" dumping them- that means now. But you also said in the same statement:

China specifically has been trying to boost its foreign-exchange reserves

So they are dumping AND boosting them. And you said I was the one who was confused.

But you are right that they are trying to protect the value of their money vs the dollar.