By using this site, you agree to our Privacy Policy and our Terms of Use. Close

Forums - General Discussion - Krugman: Spend Now, Save Later

Akvod on 10 August 2010
mrstickball said:
Akvod said:
mrstickball said:
richardhutnik said:
Akvod said:
richardhutnik said:

What exactly is the Fed supposed to do, when it has interest rates set to near zero?  Is it going to run ads that tell people to not save and to borrow more, because it is their patriotic duty?  I think it is time for people to decouple their futures from what the Fed does.  Also, maybe the Federal government can stop lying about what inflation is.  If the government can't figure out what is going on, maybe it can start by not lying to themselves.

If real deflation comes, despite them doing all this, maybe it is a sign that things are systemically broken with the economy.  I am sorry government, but I am not working now.  I can't spend to drive the economy when I have no income.  Maybe you can get me something called... a job?

How are you going to get a job, if consumers don't demand anything? If consumers don't demand, then producers don't supply.

Like I say fucking every single time and get ignored:

Firms won't demand Factor for Proudction (you, labor), if no goods and services (GDP) are being demanded. If consumers won't demand anything, who will?

What is the byproduct of the economy going global and businesses increasingly relying on foreign labor in the likes of China, India and Eastern Europe?  The end result will be an averaging of total costs across the entire system, which means the pressures downward on prices will happen, and the nature pressures are deflationary.  Tell me how you get around this outside of tariffs?

There is the need for the goods and services people can help produce to be genuinely needed in the system, or you won't get them accepted.  Maybe you can get things propped up with faux demand by the government, but that still won't be sustainable.  Factor in increases in efficiencies and productivity demands and you have X units of labor producing more, so there is less need for more labor.  Actually LESS labor is needed, which increases the spiral of labor being let go.  The past 20 years has produced a trendy mindset of increasing profits by laying people off.

See, the thing is, with the reduction of required labor for goods, it can and does result in a deflation of prices, since more goods can be produced for less money. For example, it takes less people to produce an XBLA game than a AAA title, therefore, the price is lower.

What should happen in such a scenario is that excess money should result, allowing for it to be invested in other good and service types that were not initially purchased. For example, the average spending habits of an American 100 years ago was radically different than it is today - more entertainment goods such as music, games and movies are being purchased now as opposed to then. Much of this is due to consumers having much cheaper prices for food as a result in agrucultural gains throughout the 20th century.

So the answer, really, is innovation: What technoligies can be leveraged to create new jobs for people to do. What kind of software can be developed that will require new engineers, ect. For example, in my case, I created a product that has demand that had no one filling the need, therefore its a new innovation causing new consumer spending. The problem with the US is that capital, as well as business regulations, may stiffle such productivity causing fewer jobs than there should be.

So are you saying that this recession was caused due to boredom? What has SIGNIFICANTLY changed before the housing bubble burst and credit crisis?

Nothing.

Perhaps people are simply feeling that they have a low permanent income, and that their wealth decreased due to the housing bubble burst and stock crash? And are spending less?

You're fucking claiming, that the reason why there's such low demand is simply because there's nothing people want. Bull shit. Fucking BULLSHIT. Boredom did not cause one of the biggest recessions. We've had so much innovation these past few years, technology has been increasing at an expotential rate. FUCKING BULLSHIT.

Way to really take what I say and warp it into your own way. Your very mature when you start cursing like a sailor, exclaiming I'm saying things when I am not.

My argument about production is that in some cases, new technology will antiquate certain business practices, and its up to entrepreneours to create new jobs and businesses to create new jobs for people. We're not quite having that due to the incredible amount of red tape in America that is preventing a recovery as fast or as wide as we'd want it.

Having said this, I was merely talking about production and consumption in general, not about the recession. Way to go (yet again) putting words in my mouth, and flying off the handle.

If your wanting to ask why I believe the recession happened, I take after the stance of Peter Schiff. I'd suggest reading up on him (if you haven't) as to why the recession happened.


Yes, but that's why I asked you, what has SIGNIFICANTLY changed? You make it sound like companies just dumped a bunch of jobs because they became super duper efficient due to some alien technology. I don't care about the long term RIGHT NOW. This is what's making me fucking feel like there's a tumor in my balls. Why, of all the times we could have done it and we can do it later, do we have to tackle the debt issue NOW? Why are we talking about trade imbalances RIGHT NOW. That's why, in the very beginning of this thread I posted the article: Spend NOW, save LATER.

And this thread IS about the recession. Why did you decide to just talk about "innovation" if you weren't meaning it in the context of the recession? That's just so fucking random man.

And don't tell me to read up on Peter Schiff. I post specific articles from Paul Krugman that relates to the topic at hand instead of telling you to read all of his writings.



Around the Network
mrstickball on 10 August 2010
Akvod said:
mrstickball said:
Akvod said:
richardhutnik said:

What exactly is the Fed supposed to do, when it has interest rates set to near zero?  Is it going to run ads that tell people to not save and to borrow more, because it is their patriotic duty?  I think it is time for people to decouple their futures from what the Fed does.  Also, maybe the Federal government can stop lying about what inflation is.  If the government can't figure out what is going on, maybe it can start by not lying to themselves.

If real deflation comes, despite them doing all this, maybe it is a sign that things are systemically broken with the economy.  I am sorry government, but I am not working now.  I can't spend to drive the economy when I have no income.  Maybe you can get me something called... a job?

How are you going to get a job, if consumers don't demand anything? If consumers don't demand, then producers don't supply.

Like I say fucking every single time and get ignored:

Firms won't demand Factor for Proudction (you, labor), if no goods and services (GDP) are being demanded. If consumers won't demand anything, who will?

He could always create demand for something by starting a business. How else do you think that most of the products even get to us?

Errr creating a firm would constitute an increase in supply. While there will be technically an increase in AD due to business spending that person will have to be even more alturistic than a government may be, to create a business when nobody will buy his goods.

Creating inventory when nobody will buy it is stupid. The current situation is that businesses are NOT investing, because there's no reason to increase inventory and production capability. NOBODY'S BUYING.

You assume that the product being created would not be desired.

If I could build a car that would sell for $5,000, and ran off the air we breathe, don't you think there'd be an instant demand by tens of millions of Americans?

How about the demand for the next Call of Duty game? Demand can be created if the product is good enough. What about the iPhone? Do you think that the smartphone market was already there for Apple, or did Apple create it?



Back from the dead, I'm afraid.

mrstickball on 10 August 2010
Akvod said:
mrstickball said:
Akvod said:

So are you saying that this recession was caused due to boredom? What has SIGNIFICANTLY changed before the housing bubble burst and credit crisis?

Nothing.

Perhaps people are simply feeling that they have a low permanent income, and that their wealth decreased due to the housing bubble burst and stock crash? And are spending less?

You're fucking claiming, that the reason why there's such low demand is simply because there's nothing people want. Bull shit. Fucking BULLSHIT. Boredom did not cause one of the biggest recessions. We've had so much innovation these past few years, technology has been increasing at an expotential rate. FUCKING BULLSHIT.

Way to really take what I say and warp it into your own way. Your very mature when you start cursing like a sailor, exclaiming I'm saying things when I am not.

My argument about production is that in some cases, new technology will antiquate certain business practices, and its up to entrepreneours to create new jobs and businesses to create new jobs for people. We're not quite having that due to the incredible amount of red tape in America that is preventing a recovery as fast or as wide as we'd want it.

Having said this, I was merely talking about production and consumption in general, not about the recession. Way to go (yet again) putting words in my mouth, and flying off the handle.

If your wanting to ask why I believe the recession happened, I take after the stance of Peter Schiff. I'd suggest reading up on him (if you haven't) as to why the recession happened.


Yes, but that's why I asked you, what has SIGNIFICANTLY changed? You make it sound like companies just dumped a bunch of jobs because they became super duper efficient due to some alien technology. I don't care about the long term RIGHT NOW. This is what's making me fucking feel like there's a tumor in my balls. Why, of all the times we could have done it and we can do it later, do we have to tackle the debt issue NOW? Why are we talking about trade imbalances RIGHT NOW. That's why, in the very beginning of this thread I posted the article: Spend NOW, save LATER.

And this thread IS about the recession. Why did you decide to just talk about "innovation" if you weren't meaning it in the context of the recession? That's just so fucking random man.

And don't tell me to read up on Peter Schiff. I post specific articles from Paul Krugman that relates to the topic at hand instead of telling you to read all of his writings.

Nothing significantly changed at once. It's been a progression of the past 20 years. The reason it changed all of a sudden is that demand was over-saturated. Rad up on Peter Schiff. He predicted the recession well before your bud Krugman even thought there'd be an issue on the horizon.

Do you have to keep cursing so much? Its really not making you look any more mature. Your arguing like a 15 year old that thinks he has a master's degree in economics. My argument was based on the run-up to the recession. I was trying to argue both in the recession and outside of it. Again, look into Schiff as to why I believe what I do in regards to the lack of innovation and bad regulations coupled with inflated consumerism as to why we've had the recession, and why there has been no real recovery from it.

Peter Schiff's synopsis is that due to rampant consumerism during the 90s and 2000s, prices rose (especially in the housing market) rose to inordinate heights due to bad practices by businesses and government. The reason we have horribad unemployment is that consumer spending is back to where it should be, and there hasn't been enough job creation to get the jobs back.

Again, if you don't want to read up on others that aren't Krugman, then your really going to miss out on a well-rounded economic viewpoint. Schiff is a good place to start, because his synopsis is about an hour long, and easy to understand. I've read Krugman many times. I still read each article he posts. Most of them I disagree with, but I still read him to understand his viewpoint....Yet you argue against learning about someone, simply because his name isn't Krugman.



Back from the dead, I'm afraid.

richardhutnik on 10 August 2010
mrstickball said:

Nothing significantly changed at once. It's been a progression of the past 20 years. The reason it changed all of a sudden is that demand was over-saturated. Rad up on Peter Schiff. He predicted the recession well before your bud Krugman even thought there'd be an issue on the horizon.

Peter Schiff's synopsis is that due to rampant consumerism during the 90s and 2000s, prices rose (especially in the housing market) rose to inordinate heights due to bad practices by businesses and government. The reason we have horribad unemployment is that consumer spending is back to where it should be, and there hasn't been enough job creation to get the jobs back.

Again, if you don't want to read up on others that aren't Krugman, then your really going to miss out on a well-rounded economic viewpoint. Schiff is a good place to start, because his synopsis is about an hour long, and easy to understand. I've read Krugman many times. I still read each article he posts. Most of them I disagree with, but I still read him to understand his viewpoint....Yet you argue against learning about someone, simply because his name isn't Krugman.

I would say Schiff is correctly in the ballpark regarding this.   I am not going to squabble of minutia, but I will say wages have been flat since the 1970s actually, with globalistic pressure to drive down wages to some extent, accelerating as time has gone on.  Since 2000 employment growth has also been stagnant, and consumer spending has been at unsustainable levels.

The problem with individuals like Schiff is the monkeys at the typewriter problem.  You have a lot of people like Schiff saying this or that.  It is just that someone afterwords looks right in retrospect.

In regards to deflationary pressure, it is great that prices drop.  However, the downside is nations like America with people who work and have student loans, get squeezed in the process.  The cost to live ends up being far higher.  Expect environmental standards to also get pressured to become more lax like in China, so the quality of life suffers.



mrstickball on 10 August 2010
richardhutnik said:
mrstickball said:
 

Nothing significantly changed at once. It's been a progression of the past 20 years. The reason it changed all of a sudden is that demand was over-saturated. Rad up on Peter Schiff. He predicted the recession well before your bud Krugman even thought there'd be an issue on the horizon.

Peter Schiff's synopsis is that due to rampant consumerism during the 90s and 2000s, prices rose (especially in the housing market) rose to inordinate heights due to bad practices by businesses and government. The reason we have horribad unemployment is that consumer spending is back to where it should be, and there hasn't been enough job creation to get the jobs back.

Again, if you don't want to read up on others that aren't Krugman, then your really going to miss out on a well-rounded economic viewpoint. Schiff is a good place to start, because his synopsis is about an hour long, and easy to understand. I've read Krugman many times. I still read each article he posts. Most of them I disagree with, but I still read him to understand his viewpoint....Yet you argue against learning about someone, simply because his name isn't Krugman.

I would say Schiff is correctly in the ballpark regarding this.   I am not going to squabble of minutia, but I will say wages have been flat since the 1970s actually, with globalistic pressure to drive down wages to some extent, accelerating as time has gone on.  Since 2000 employment growth has also been stagnant, and consumer spending has been at unsustainable levels.

The problem with individuals like Schiff is the monkeys at the typewriter problem.  You have a lot of people like Schiff saying this or that.  It is just that someone afterwords looks right in retrospect.

In regards to deflationary pressure, it is great that prices drop.  However, the downside is nations like America with people who work and have student loans, get squeezed in the process.  The cost to live ends up being far higher.  Expect environmental standards to also get pressured to become more lax like in China, so the quality of life suffers.

Although I do agree that you have the monkeys at a typewriter problem, you should also hear what Schiff has said before, during and after. He's correctly predicted just about every part from 2006-2010. He called the recession 2 years earlier for the exact reasons it did.

Here are a few videos to watch:

http://www.youtube.com/watch?v=2I0QN-FYkpw

http://www.youtube.com/watch?v=EgMclXX5msc

Its good watching.



Back from the dead, I'm afraid.

Around the Network
numonex on 10 August 2010

http://www.youtube.com/watch?v=CwFRHqzbf_U&feature=related

Paul Keating was a visionary leader who was PROACTIVE. He made decisions in the interests of Australia over the next 2 decades VS Howard who was REACTIVE and thought about the next 2-3 years. Hindsight has proven Keating to be right on the money about damn near everything. You don't have to like him, but you have to respect him!!! Listen to any ECONOMIC expert and they will tell you Keating was RIGHT and continues to be right.

http://www.youtube.com/watch?v=_v8fcdg8mKQ&NR=1

Paul Keating was one of the greatest Treasurer the modern world has ever seen. He was a straight talking politician, a reformer and a Proactive leader who cared for the long-term, not just the short-term. He did not even finish high school and he puts the more higher degree educated politicians to shame on economic affairs.



numonex on 10 August 2010
mrstickball said:
Akvod said:
richardhutnik said:

What exactly is the Fed supposed to do, when it has interest rates set to near zero?  Is it going to run ads that tell people to not save and to borrow more, because it is their patriotic duty?  I think it is time for people to decouple their futures from what the Fed does.  Also, maybe the Federal government can stop lying about what inflation is.  If the government can't figure out what is going on, maybe it can start by not lying to themselves.

If real deflation comes, despite them doing all this, maybe it is a sign that things are systemically broken with the economy.  I am sorry government, but I am not working now.  I can't spend to drive the economy when I have no income.  Maybe you can get me something called... a job?

How are you going to get a job, if consumers don't demand anything? If consumers don't demand, then producers don't supply.

Like I say fucking every single time and get ignored:

Firms won't demand Factor for Proudction (you, labor), if no goods and services (GDP) are being demanded. If consumers won't demand anything, who will?

He could always create demand for something by starting a business. How else do you think that most of the products even get to us?

Supply side economics. Creating a supply(firm) creates its own demand and the prices are set accordingly by the market. In theory it sounds straight forward. But......

There is a high failure rate of small business failures and the business has to be financially viable. Setting up  a business costs a lot of time and money. Being self-employed sounds great but it is long hard work. 



mrstickball on 11 August 2010
numonex said:
mrstickball said:
Akvod said:
richardhutnik said:

What exactly is the Fed supposed to do, when it has interest rates set to near zero?  Is it going to run ads that tell people to not save and to borrow more, because it is their patriotic duty?  I think it is time for people to decouple their futures from what the Fed does.  Also, maybe the Federal government can stop lying about what inflation is.  If the government can't figure out what is going on, maybe it can start by not lying to themselves.

If real deflation comes, despite them doing all this, maybe it is a sign that things are systemically broken with the economy.  I am sorry government, but I am not working now.  I can't spend to drive the economy when I have no income.  Maybe you can get me something called... a job?

How are you going to get a job, if consumers don't demand anything? If consumers don't demand, then producers don't supply.

Like I say fucking every single time and get ignored:

Firms won't demand Factor for Proudction (you, labor), if no goods and services (GDP) are being demanded. If consumers won't demand anything, who will?

He could always create demand for something by starting a business. How else do you think that most of the products even get to us?

Supply side economics. Creating a supply(firm) creates its own demand and the prices are set accordingly by the market. In theory it sounds straight forward. But......

There is a high failure rate of small business failures and the business has to be financially viable. Setting up  a business costs a lot of time and money. Being self-employed sounds great but it is long hard work. 

Does not make it any less rewarding, or beneficial for people. Otherwise, great men like Henry Ford and Bill Gates would have given up.



Back from the dead, I'm afraid.

richardhutnik on 11 August 2010
mrstickball said:
richardhutnik said:
mrstickball said:
 

Nothing significantly changed at once. It's been a progression of the past 20 years. The reason it changed all of a sudden is that demand was over-saturated. Rad up on Peter Schiff. He predicted the recession well before your bud Krugman even thought there'd be an issue on the horizon.

Peter Schiff's synopsis is that due to rampant consumerism during the 90s and 2000s, prices rose (especially in the housing market) rose to inordinate heights due to bad practices by businesses and government. The reason we have horribad unemployment is that consumer spending is back to where it should be, and there hasn't been enough job creation to get the jobs back.

Again, if you don't want to read up on others that aren't Krugman, then your really going to miss out on a well-rounded economic viewpoint. Schiff is a good place to start, because his synopsis is about an hour long, and easy to understand. I've read Krugman many times. I still read each article he posts. Most of them I disagree with, but I still read him to understand his viewpoint....Yet you argue against learning about someone, simply because his name isn't Krugman.

I would say Schiff is correctly in the ballpark regarding this.   I am not going to squabble of minutia, but I will say wages have been flat since the 1970s actually, with globalistic pressure to drive down wages to some extent, accelerating as time has gone on.  Since 2000 employment growth has also been stagnant, and consumer spending has been at unsustainable levels.

The problem with individuals like Schiff is the monkeys at the typewriter problem.  You have a lot of people like Schiff saying this or that.  It is just that someone afterwords looks right in retrospect.

In regards to deflationary pressure, it is great that prices drop.  However, the downside is nations like America with people who work and have student loans, get squeezed in the process.  The cost to live ends up being far higher.  Expect environmental standards to also get pressured to become more lax like in China, so the quality of life suffers.

Although I do agree that you have the monkeys at a typewriter problem, you should also hear what Schiff has said before, during and after. He's correctly predicted just about every part from 2006-2010. He called the recession 2 years earlier for the exact reasons it did.

Here are a few videos to watch:

http://www.youtube.com/watch?v=2I0QN-FYkpw

http://www.youtube.com/watch?v=EgMclXX5msc

Its good watching.

I will look to get to it sometime.  But, someone was bound to be right in their analysis, due to the sheer number of people forecasting things.  I think Kyosaki (Rich Dad) also warned of an impending meltdown to.



Akvod on 11 August 2010
mrstickball said:
Akvod said:
mrstickball said:
Akvod said:

So are you saying that this recession was caused due to boredom? What has SIGNIFICANTLY changed before the housing bubble burst and credit crisis?

Nothing.

Perhaps people are simply feeling that they have a low permanent income, and that their wealth decreased due to the housing bubble burst and stock crash? And are spending less?

You're fucking claiming, that the reason why there's such low demand is simply because there's nothing people want. Bull shit. Fucking BULLSHIT. Boredom did not cause one of the biggest recessions. We've had so much innovation these past few years, technology has been increasing at an expotential rate. FUCKING BULLSHIT.

Way to really take what I say and warp it into your own way. Your very mature when you start cursing like a sailor, exclaiming I'm saying things when I am not.

My argument about production is that in some cases, new technology will antiquate certain business practices, and its up to entrepreneours to create new jobs and businesses to create new jobs for people. We're not quite having that due to the incredible amount of red tape in America that is preventing a recovery as fast or as wide as we'd want it.

Having said this, I was merely talking about production and consumption in general, not about the recession. Way to go (yet again) putting words in my mouth, and flying off the handle.

If your wanting to ask why I believe the recession happened, I take after the stance of Peter Schiff. I'd suggest reading up on him (if you haven't) as to why the recession happened.


Yes, but that's why I asked you, what has SIGNIFICANTLY changed? You make it sound like companies just dumped a bunch of jobs because they became super duper efficient due to some alien technology. I don't care about the long term RIGHT NOW. This is what's making me fucking feel like there's a tumor in my balls. Why, of all the times we could have done it and we can do it later, do we have to tackle the debt issue NOW? Why are we talking about trade imbalances RIGHT NOW. That's why, in the very beginning of this thread I posted the article: Spend NOW, save LATER.

And this thread IS about the recession. Why did you decide to just talk about "innovation" if you weren't meaning it in the context of the recession? That's just so fucking random man.

And don't tell me to read up on Peter Schiff. I post specific articles from Paul Krugman that relates to the topic at hand instead of telling you to read all of his writings.

Nothing significantly changed at once. It's been a progression of the past 20 years. The reason it changed all of a sudden is that demand was over-saturated. Rad up on Peter Schiff. He predicted the recession well before your bud Krugman even thought there'd be an issue on the horizon.

Do you have to keep cursing so much? Its really not making you look any more mature. Your arguing like a 15 year old that thinks he has a master's degree in economics. My argument was based on the run-up to the recession. I was trying to argue both in the recession and outside of it. Again, look into Schiff as to why I believe what I do in regards to the lack of innovation and bad regulations coupled with inflated consumerism as to why we've had the recession, and why there has been no real recovery from it.

Peter Schiff's synopsis is that due to rampant consumerism during the 90s and 2000s, prices rose (especially in the housing market) rose to inordinate heights due to bad practices by businesses and government. The reason we have horribad unemployment is that consumer spending is back to where it should be, and there hasn't been enough job creation to get the jobs back.

Again, if you don't want to read up on others that aren't Krugman, then your really going to miss out on a well-rounded economic viewpoint. Schiff is a good place to start, because his synopsis is about an hour long, and easy to understand. I've read Krugman many times. I still read each article he posts. Most of them I disagree with, but I still read him to understand his viewpoint....Yet you argue against learning about someone, simply because his name isn't Krugman.


Inflation itself DOES NOT MATTER. It's the inflation RATE that matters. It doesn't matter if prices have increased, as long as it has increased at a steady rate. If you're going to talk about wages not increasing with the price of good, sure, but again, you're pointing out long term problems we have, but never identifying why exactly it all "just melted down".

But this is my point, while there were a lot of major things happening specifically concerning credit, technically the great majority of Americans had the same income. The majority of Americans still had their jobs. Right as soon as the news hit on the TV.

So Keynesians believe that people, seeing their fucking savings just dissapear due to douche bags and their houses become worthless, and hearing that the economy will go down the drain, BEGIN TO SAVE.

http://en.wikipedia.org/wiki/Wealth_effect

http://en.wikipedia.org/wiki/Permanent_income_hypothesis

 

And this is the part I hate. You made claims like "Keynesianism was disproved", and give me these arguments that do not use data, is not taught in academia, etc. You sound like some religious person saying "He predicted this". I care more about the RATIONALE behind those predictions. And that rationale is crap.

Because the wealth we had was NOT an illusion. The is the stupidity of the 30's. We thought that we had to "cut back" or that we had to "flush out the inefficiencies". Yes, both in the 30's we had a bubble and over valuation. But if you're saying that bubble was equivallent to the loss in production and consumption we're having now, I really cannot listen. We have been able to physically create Goods and Services a few years ago. We have the capability, we have the resources, etc. The only thing that's different, is in the mind. People don't want to buy anything anymore. If people don't buy anything, then firms don't make things. If firms don't make things, then firms don't need workers.