Hey, Paul Ryan...we can't run out of money. Dollars are created when the government spends and that's the only way they can be created, so there's no risk of not being able to "pay" for entitlements.
That's point number one.
Point number two is that Medicare is eminently sustainable so long as we have the real assets (hospitals, doctors, nurses, technicians, medicine, etc) for people to consume. The only possible way that Medicare could not be sustained is if these assets were unavailable for some reason and that is not the case. And by the way, Alan Greenspan schooled you on this a while back.
Paul Ryan will never wake up to these facts. He's a blind, ideologue. He's a little boy who read a book a long time ago and now has the crazy beliefs of that book deeply embedded in his mind.
The sad part is that the people of this country beleive him. They believe him because they have been brainwashed into believing all that hogwash about running out of money and "not being able to afford" Medicare, Medicaid and Social Security. These have been some of the most succesful social programs this country has ever seen and millions of Americans have been kept out of poverty thanks to them. Yet despite this, Ryan and the GOP want to do away with them for reasons that are both ideological and irrational.
The powers that be love Ryan. He's their handome and "brilliant" messenger. But when we have millions of sick and homeless, then and only then will we will feel the REAL cost to society. It will be a burden that dwarfs any purported burden we face now.
In Paul Ryan the GOP have chosen a plan, but is it a plan whose ultimate consequences they truly understand?
Great post Mike!
ReplyDeleteThe only possible way that Medicare could not be sustained is if these assets were unavailable for some reason and that is not the case.
The other way it could not be sustained is if politicians decide not to sustain it. When politicians say, "We don't have enough money to give old people all that health care stuff," what they really mean is "I don't want to give old people all that health care stuff."
Yes, Dan, which is what the GOP and some Dems are proposing.
ReplyDeleteCall it infrastructure licensing/royalty fees instead. Don't want the old folks to have it? No problem. Just find yourself a nice spot out in the wilds, create your own business from what you find on the ground, your own currency and a customer base that isn't serviced by any paved (or dirt) roads. And give up your computer.
ReplyDeleteTurning to concerns that a growing deficit could undermine American influence abroad, she focused on China.
ReplyDeleteCondi Rice Last Night, she must be racist to attack Obama and his deficits.
"Dollars are created when the government spends and that's the only way they can be created"
ReplyDeleteMany people don't get the "money is created when the government spends" bit. It's a real stumbling block, largely due to the weird internal accounting of the treasury and fed which obscures the basic logic and somehow turns government liabilities into government "assets"... (wtf?)
However, when you say that only government spending creates dollars, are you referring to fed purchases of assets (lending) as "spending"?
they understand for sure, and they couldnt care less about anyone but themselves. the gop need to disband and never be spoken of again. ryan strikes me as someone who hasnt worked a day in his life, yet expects others to work well into their golden years(manual labor no less) a f@#cking punkass kid.
ReplyDeleteTurning to concerns that a growing deficit could undermine American influence abroad, she focused on China.
ReplyDeleteCondi Rice Last Night, she must be racist to attack Obama and his deficits.
No, she's just ignorant or a liar.
"Ryan’s speech was an apparent attempt to set the world record for the greatest number of blatant lies and misrepresentations slipped into a single political speech"
ReplyDeletehttp://www.foxnews.com/opinion/2012/08/30/paul-ryans-speech-in-three-words/#ixzz2535uoJKq
Mr. Ryan's entire political career is based on these deadly innocent frauds, and he reached the VP nomination.
ReplyDeleteHow can you ask from him to understand you?!
No, she's just ignorant or a liar.
ReplyDeleteSome people are fools, some are morons, and some are liars.
We all operate in terms of a POV that constitues a worldview (Wittgenstein) as a logical requirement for discourse. That is to say, meaning is context dependent and the 'logical context" that allows for interpretation of real context is a universe of discourse. Every universe of discourse is bounded and the boundaries are the norms. Norms are rules and rule require ultimately rule for deciding their application in context. These basic rules are criteria and they are usually called "principles' or "values."
Liberals and conservatives, libertarians and authoritarians, etc, have different POVs that constitute opposing world views based on different norms as principles and values. Not everyone that disagree with one's POV is a fool, moron, or liar. They just see things differently, which means that what they see as factual may be different from what someone with a different POV sees as factual. Think of the duck-rabbit and similar optics.
Cognitive research is showing that there are many types of brain functioning based on difference of "memes." Memes are the psychological correlate of genes in that they proliferate Ideas culturally. Memes are open channels in the brain through which energy flows easily due to prior imprinting.
These philosophical, moral, political, etc., memes can be categorized under the various classes of philosophical, moral, political etc. ideas, and a personally can be defined in terms of the predominant memes.
So there can be genuine disagreement over POV and democracy involves resolving those disagreements through compromise at best or imposition of the will of the majority of the electorate through representative is the worst .
Of course, to the degree that representatives are corrupt, democracy doesn't function. But democracy can also to astray due to "bad memes" predominating and generating dis-ease leading to paralysis, atrophy, cancerous growths, and ultimately death.
So I ma not sure that people like Condi Rice, Colin Powell, etc, fit into the category of fools, morons, or liars. They may just see things differently.
"...undermine American influence abroad..."
ReplyDeleteEven as foreign nations buy up our debt like there's no tomorrow; a reflection of their desire to keep their economies alive by exporting to us.
If anything, our influence has never been greater despite the growth of these deficits. And it is those very deficits that are supporting our trading partners.
To anyone who cares to understand a few basic, economic facts, statements like hers look totally stupid.
I wonder sometimes if these people really believe what they say or say it bc that is what they think everyone else believes in an attempt to sound profound or full of wisdom?
ReplyDeleteMike,
ReplyDeleteGreat post... you point out those books of Rands that are read by young minds these really look like they end up screwing up a lot of people and perhaps at vulnerable ages....
Rsp,
Jon,
ReplyDelete"an attempt to sound profound or full of wisdom?"
This is good imo... iow there is a scripture apostle Paul wrote: "alleging themselves to be wise they are made stupid..."
So we all probably have egos, and Ryan (perhaps more than others let's allow) you're right he wants to sound like he is "smart" or "wise"... ok let's allow him that perhaps (I dont think this is too bad so far...)... but then where does he go for his guidance????
Ayn Rand??????? Whaaaaaat????
He purports to be a Christian or Roman Catholic or whatever, if so, then why dont you go to the Scriptures for guidance????
Nooooooo, he goes to Ayn Rand? Why?
Right there is his problem. Done deal, stick a fork in him he's done....
Like Mike says this looks like he's deeply embedded in this and he cant get out...
I think at least maybe all that can be done is to point this out to others and they wont get caught up in it also...
Even for Ryan I read some bio on him and he lost his father while he (Ryan) was at a young age... I think he (Ryan) actually found his father dead... this is horrible for anybody... perhaps this made him vulnerable. And he turned to Rand's philopsophy of "individualism" or whatever which he felt was helping him get thru this loss...
Even so, he continues over 20 years later to go to the wrong places for his guidance.... sad indeed.
rsp
you point out those books of Rands that are read by young minds these really look like they end up screwing up a lot of people and perhaps at vulnerable ages....
ReplyDeletePreaching the virtue of selfishness to adolescent minds of any age is a sure winner.
I saw that DemocracyNow had a good interview up with Matt Taibbi: The Secret to Mitt Romney's Fortune? Greed, Debt and Forcing Others to Pay Bill http://www.youtube.com/watch?v=T2EKyDMaZ_4
ReplyDeleteFor the record, I "get" the "government creates funny money when it spends" meme and that it can never "run out" of funny money.
ReplyDeleteSuch spending activity simply shifts and steals purchasing power from those holding the existing money to those getting the new money first. This does not magically create thousands of new doctors to treat millions of new patients. This does not magically create hundreds of thousands of new nursemaids to change the Depends of millions of senile baby boomers.
Plus, super low non-market interest rates continue to distort the price, investment and capital structure and almost completely impede the formation of real savings. Most people can easily see MMT for the outrageous scam that it is.
Wow Bob. So in every 'money creation' action some economic agent will be given new purchasing power over other.
ReplyDeleteDoes this mean we shouldn't EVER create new money for this "moral" (LOL) issue?
And then comes the major stupid claim that creating this new purchasing power necessarily 'steals' any purchasing power from previous money hoarders (check check), who 'saved' freshly printed money at some point in time. Do you really get the economy? I mean, do you know that economy is all about flows? Is stupid to say that printing money has a real cost 'per se', it doesn't, specially when operating below full capacity (and this is the part where you have enough production capacity to provide healthcare material, you have enough personal trained to provide the services and you have even a bigger pool of personal waiting to work at that, specially when market inefficiency of insurance companies stops rigging prices up by bribing politicians).
I wonder in your ideal world from where the hell is the new money supposed to come into existence. Or did God create a fixed amount of money we have to dig out of ground? (hah!).
Or did God create a fixed amount of money we have to dig out of ground? (hah!).
ReplyDeleteBased on things said in previous threads, I believe that this is Bob's version of sound money.
do you know that economy is all about flows?
ReplyDeleteNo. The "economy" is all about human beings with different skills, desires, wants and needs who exchange goods and services. There's generally no water involved, so nothing actually "flows".
specially when operating below full capacity
How would anyone know what "full capacity" even means, much less whether we've attained it or not? Suppose everyone wants to live like the Amish? Suppose everyone wants to live like the Mayans?
Does this mean we shouldn't EVER create new money for this "moral" (LOL) issue?
ReplyDeleteNo. We should not.
Obama: Look, I get the Keynesian thing. But it's not where the electorate is… p. 338.
http://delong.typepad.com/sdj/2012/08/the-buzz-from-michael-grunwalds-book-about-obama-economic-policymaking.html
Thanks for the nice quote that I can show to the electorate.
"Such spending activity simply shifts and steals purchasing power from those holding the existing money to those getting the new money first"
ReplyDeleteNo. The spending cycle doesn't shift anything. If it isn't maintained (velocity of money) economic activity will slow down and value declines.
This dynamc has been evident in every episode of decreased spending ever observed (this includes spending no matter what the source).
Inaction causes the economy to contract.
It appears the rank-and-file Austrian holds beliefs that are contrary to normal system dynamics.
Unless Bob isn't representative sane Austrian thought.
Bob, if you include production and provision of services in the healthcare or education sector (for example) and this does not make costs higher than real growth (there is no dilution of the incomes of households) then there is enough capacity to expand that economic activity.
ReplyDeleteSo when do we start the count to not create EVER new money? Before the first currency was ever used/created or what? Or do you mean that public institutions should never ever create money and money creation business should be completely left to private sector? If so, why? Is this an ideological preference because "the government is useless/can't produce nothing of value/is inefficient/economic calculation" and other unsubstantial claims?
BTW the action of exchanging something is a flow of work (measured in some form) in one way or an other. Yes, the economy is exactly about flow of things being transformed into flow of other things.
"Economies" do not have or lack "momentum". People do not need to be induced to "spend" and should not be induced to "spend" to provide "momentum". The "economy" is not analogous to a mechanism, a machine or to physics. Foolishly believing in that dimwitted analogy is your problem right off the bat.
ReplyDeletei admit it. I don't understand the world Bob describes. I guess I've been brainwashed by you modern money people. dammit. Off to the jungle...
ReplyDeletebob,
ReplyDeleteI agree that an economy is not analogous to physics, but imo your wrong about a mechanism or machine from the standpoint that these two are designed and operated by intelligent creative human beings just like our economies have to be....
rsp,
I have been wondering, ever since Romney became the presumptive nominee if perhaps he might pull a reversal on the GOP deficit hawks. He certainly doesn't seem to be an ideologue. I found this article extremely intriguing.
ReplyDeletehttp://www.businessinsider.com/mitt-romney-begins-to-ignore-the-grassroots-2012-8
John,
ReplyDeleteSeems like our only hope for the domestic economy at this point... Rubinomics has rendered the Obama Admin impotent.
How do they (GOP) see this?
Pick Ryan to "keep your enemies closer" type of thing... offer him the VEEP but in return he has to put the hammer to his moron minions?
I dont know.... may be a stretch...
I wonder what the GOP would do for interest rates?
If their plan includes going back to higher policy rates for savers, then if the GOP wins, then the next morning you would want to sell all of your bonds probably..
Thanks for the link... rsp
"No. The "economy" is all about human beings with different skills, desires, wants and needs who exchange goods and services. There's generally no water involved, so nothing actually "flows".
ReplyDeleteRock flows when it's hot enough…
Human beings are participants in a system that doesn't do anything until transactions take place.
Production alone is not an economy. Economy is the relationship between production and demand, which is expressed as a function of spending. Spending is a flow, whether you call it that or not.
Money doesn't "flow" through bank accounts, pockets and through the economy as a whole? Does it "jump"? "Leap"? How would you describe this movement in your own words?
How is this different than electrons or water? Because they are "physical"?
Money can be physical too, especially the gold kind of fiat.
The dynamics of these types of circuits are very similar and obey many of the same rules.
In my view it is impossible to have an understanding of economics without an understanding of or an awareness of the very existence of systems and the fact that those systems are embedded in every process.
Bob's failure to understand the similarities of the dynamics of different systems or the existence of systems at all means he's done, stick a fork in him.
"Pick Ryan to "keep your enemies closer" type of thing..."
ReplyDeleteIf so TPTB must have a pre-nuptual contract out on him to be neutered or disappeared at the first sign of Mitt hopping off the twig.
So I suppose you Keynesians have an empirically tested experiment demonstrating that the "economy" is "mechanical" as opposed to a bunch of unique people trading and exchanging goods and services?
ReplyDelete"So I suppose you Keynesians have an empirically tested experiment demonstrating that the "economy" is "mechanical"
ReplyDeleteNo one has said the economy is mechanical, only that it is a system, a kind of "machine" the dynamics of which are bound by embedded math relationships of the same kind that make the outcome of 2+2=4 always true.
For the record, I'm not a Keynesian, I've never read an economics text of any kind.
Anything I claim about economics is from the point of view of my math/engineering background.
The entirety of mechanical physics can be derived from F=ma. That "simple" relationship, once discovered, did all of the heavy lifting in the development of mechanical physics which is considered very complex.
Economics has the same kind of simplicity at it's root.
John Zelnicker said...I have been wondering, ever since Romney became the presumptive nominee if perhaps he might pull a reversal on the GOP deficit hawks.
ReplyDeleteRomney and Ryan are supply side tax-cutters who believe that cutting taxes will increase revenue enough to pay for them. The are also Republicans, and the GOP policy is increasing military spending and cutting social spending. That will be the agenda, and they won't be overly concerned with deficits, for as VP Cheney asserted, Reagan showed that deficits don't actually matter politically.
What is particularly worrisome is that they are "defense" hawks and the people who look most likely to be running foreign policy under a Romney-Ryan administration are the Bush neo-cons. This is the way Colin Powell's former CoS Col. Lawrence Wilkerson sees it anyway. These people are loose cannons, literally. And in the US, funding for national security is never an issue as long as the people can be made to fear the supposed enemy enough. So I would expect to see military spending under Romney to go through the roof, with at least one war of choice during his administration.
So I suppose you Keynesians have an empirically tested experiment demonstrating that the "economy" is "mechanical" as opposed to a bunch of unique people trading and exchanging goods and services?
ReplyDeleteKeynes denied ergodicity.
But an economy is not JUST "a bunch of unique people trading and exchanging goods and services." Human behavior is not completely random but patterned, since it is based on language, culture, and institutions. That's just basic biology, anthropology, and sociology. So while the actions of individuals are more less unpredictable, when people act in concert, there are statistical patterns that are quite discernable. For example, businesses are successful or not depending in part on how good they are at pattern recognition in comparison with the competition.
Gold standard simply shifts and steals purchasing power from those who work to those who hoard gold. This does not magically create thousands of new doctors to treat millions of new patients. This does not magically create hundreds of thousands of new nursemaids to change the Depends of millions of senile baby boomers.
ReplyDeletePlus, gold standard distorts the price, investment and capital structure and almost completely impedes the formation of real savings. Most people can easily see gold standard for the outrageous scam that it is.
Bob Roddis,I don´t know what to say to you. Well, I mean you are a not a very modest man,but with a lot to be modest about, to paraphrase Winston Churchill :D!
ReplyDeleteSubatomic particles behaviour is pretty much unpredictable, just like atoms in a gas. This does not prevent us from understanding and predicting how that gas or these particles will behave.
ReplyDeleteBob Roddis does not understand (amongst other things) the difference between radical uncertainty and the capability to predict a certain set of outcomes with good probability odds. T
hat's how the human brain is trained since its borne btw, saying that humans are unpredictable as individuals fails to acknowledge how childhood and adolescence are basically a training program on pattern recognition from other humans. The market is a processor of aggregate information of these individual pattern recognitions, how otherwise we would recognize others demands and be able to supply them?
Off course there is a reasonable predictability even under radical uncertainty, otherwise not only would be society, capitalism or any sort of organisation impossible, but life itself would be impossible. Surrendering to idealistic memes (we should free market reign over anything) because the remaining implacable universal radical uncertainty is a dangerous game smart individuals and societies (yes, such things exist!) should not pursue.
Tom -- "... a war of choice..." Perhaps Iran? Looks like the easiest one to target as a war of choice. We are already sabre-rattling at them.
ReplyDeleteIran or Syria. Remember W's "axis of evil"? NK, Syria, and Iran. These are the neo-con objectives. NK is sort of off the list, since it is a protectorate of China, so all the US can do there is exert pressure. NK also has nuke capacity that is would use against SK. Big obvious downsides, so NK is off the table for war.
ReplyDeleteThe US can likely get regine change in Syria without having to resort to violence itself.
That leaves Iran.
Tom -- Agree completely.
ReplyDeleteMatt Frank said:
ReplyDelete"I agree that an economy is not analogous to physics,.."
With all due respect I suggest a reading of Soddy's Cartesian Economics Lecture on:
"The Bearing of Physical Science Upon State Stewardship".
http://habitat.aq.upm.es/boletin/n37/afsod.en.html
It is the failure to acknowledge the relationship between the national economy and the laws of physics that is destroying the world as we know it.
Respectfully.
So the question that needs to be asked of those claiming we cannot sustain the spending on medicare/SS at current levels because its a "resource sustainability" issue is this; How does changing the ownership of the account, from public to private, solve that problem? How is it that an account which has grown to say..... $10 million, via private investment in stocks or whatever, have any more "solvency" in real terms when we reach the end of resource production?
ReplyDeleteThis seems to be an undiscussed issue. Just because my account was administered by me and investment choices were made by me, why should I feel any better about my access to resources when we reach the point where productivity can no longer meet our needs as a society? Its just as likely that my 10 million will buy me one year of health care at that breaking point as it is that the medicare account will have to disburse 10 million to keep me healthy for a year.
We must develop ways to make sure we can provide all the needed health care regardless of who owns the accounts to pay for health care and most private individuals are NOT investing their hard earned money into production improving techniques within the health care industry they are simply chasing yields in the market.
Greg,
ReplyDeleteA great effort of introducing clarity to the discussion.
More like this.
It's a supply side argument based on Say's law. Private saving = private investment (therefore private saving cause private investment). Private accounts are private saving that increases private investment, and the private saving increase from privatization of Medicare would "naturally" go into investment in the health care industry. Follow that?
ReplyDeletejoebhed.
ReplyDeleteSeems like I've seen you commenting over at Naked Capitalism.
Welcome to MNE.
Joe,
ReplyDeleteNot necessarily disagreeing, but for instance F=ma.
How is that Law's relationship to the economy not being acknowledged ?
It is used in designing structures, etc... so how is this not acknowledged?
rsp
Joe,
ReplyDeleteFollowing up here...
Speed of light is 3 x 10^8 m/s, does Obama not know this and somehow this is leading him to believe and dispense falsehoods and I quote at the 2009 MLB AllStar game: "we're out of money"....
Acceleration of a body due to earths gravity is 9.8 m/s^2, is Paul Ryan ignorant of this and this is leading him to think that US Treasury Securities are best described as "we are leaving a debt to our children that they will have to pay back someday"...
Is this how it works? ie these people are denying the laws of physics and then they become such morons?
That is fascinating...
So we have laws ON THE BOOKS, such as the Federal Reserve Act ("Maximum Employment"), the Humphrey-Hawkins FULL EMPLOYMENT Act, LAWS OF MEN, which are ignored. But this is NOT the true problem????
It is a lack of acknowledgement of the laws of physics??? Our leaders think our bridges are all levitating and this leads them to believe we are "out of money"????
Our leaders think apples fall to the ground because "thats where they want to go"? and then it follows that they directly believe our grandchildren have to "pay back" US Treasury securities???
When God set up the economic laws for His people of the House of Israel which failed, did He not know about the Laws of Physics that He created???