Economy, Banks, Gold, and other stuff.

[astralis]

doktor,

You make it sound like US Treasury never has to repay Social Security.

this is why economists talk about "debt held by the public" and "total debt", which includes intragovernmental holdings.

Social Security is obligated to begin cashing in the securities once the overall Trust Fund starts running deficits. at this point in time, the US can:

- either issue public debt
- cut the amount of benefits
- move other monies around from parts of the government
- increase payroll taxes

so starting around 2033, a portion of intragovernmental debt will be converted to public debt on a yearly basis, with how big this portion is dependent on a variety of factors (everything i listed above).

[astralis]

yes-- they were miracles of centralized government and bureaucracy compared to the french feudal example. the french didn't really centralize until Louis XIV (the Sun King), and the french never really developed a capitalist class whose first customers/investors were the government and noblemen.

as a historical aside, it was the british state's ability to mobilize economic resources-- via effective taxation, a central bank, and the ability to borrow from a well-developed credit market-- that allowed her to beat france all throughout the 18th century, eventually driving france to bankruptcy and revolution despite france being far wealthier.

not coincidentally, it was also this same british state which helped spark the industrial revolution, for instance, the state investment in the development of railways meant to transport coal from the newly-opened coal mines.

capitalism/the free market requires a relatively strong (but not overwhelming) state: sometimes for capital, sometimes for education, and always for rule of law as well as security. it is by no means a one-way street where the government takes all and gives nothing, otherwise no one would want to have a government.

[DOR]

so starting around 2033, a portion of intragovernmental debt will be converted to public debt on a yearly basis, with how big this portion is dependent on a variety of factors (everything i listed above).

Assuming nothing changes between now and then.
Of course, if that was the norm, the Clinton surpluses would have stood up to the Bush budget busting.

"All things being equal" doesn't hold in US budgetary politics.

[snapper]

on a larger note to begin with--

i note most of your posts to date largely consist of:

"your data is false [without showing countervailing data]/manipulated, because it is a self-evident truth that the entire economy is a big bubble. youtube link!" repeat ad nauseum.

So I point out that the last graph you 'quoted' was predictive and that's an assertion... Is it true or not? Since the graph forecasts what debt as percentage of GDP will be in 2022 it is clearly predictive. Not able to argue about that you resort to moaning that I am making an assertion! Well I am; a correct one. Just because a graph makes a prediction doesn't mean it's necessarily right which is why I produced another predictive graph that proved to be incorrect.

Isn't this quote from you also an 'assetion'?

as long as it makes economic sense to borrow, then there's no reason why it will, or should, stop. and the market dictates how much economic sense there is via interest rates.

Just one which you know to be currently false as the Fed keeps interest rates artificially low. So let me get this right... It's ok for you to 'assert' anything right or wrong but not ok for me to assert that your assertion is incorrect?

I posted the banking bill clip as an example of what one real MP on the more Austrian side actually proposed in the House of Commons. I thought others might genuinely interested... Little hope of that with you, that much is now clear. So instead of criticising the proposed banking reform law you criticise me for posting it. It seems to me that behind the mask of every do good 'liberal' lies someone entirely uninterested in any view other than their own to the point that people who may hold contrary views are attacked personally and not on the value of their arguments.

are you SURE you're an investor?? what type of investor "hedges" against inflation by buying into the stock market?! if your goal is return, by -definition- you've de-prioritized inflation/risk reduction. this is investing 101...:confu:

Most of my personal positions are long and in the futures markets. I don't own alot of gold personally but am increasing my position there though I believe gold will go below 1200 before a 'bottom' is hit. I don't really have time to short positions at present or 'ride the bubbles' and know when to get out.

not coincidentally, it was also this same british state which helped spark the industrial revolution, for instance, the state investment in the development of railways meant to transport coal from the newly-opened coal mines.

The first steam engines were entirely private run on and then between coalmines and for pumping and later for transport. The extension of the rail network was also funded through the exchanges and private capital. The Bank of England was founded to fund the Navy basically and income tax was supposed to be a temporary measure to defeat Napoleon... Is he still around? The US Fed was founded to fund WW1 and Nixon left the Bretton Woods agreement gold agreement to fund the Vietnam War. Any coincidences showing yet? Pure fiat currency means war is always affordable. You have magic pc.

Look the point is about this whole debate whether a free market is more efficient at creating growth than a Government or a Central Bank flooding the market with cheap money? Can people decide what to do with their money better than the Government? Does cheap credit create bubbles and debt? My answer to the last two questions is yes (even the Telegraph is catching up; Bubblenomics is back. Markets have become completely detached from economic reality – and it's going to get ugly – Telegraph Blogs) the search for yield is creating new bubbles - just like the last time.

Anyway as I risk being censored for making contrary assertions to those of others I shall leave this thread and I thank ALL those who asked me questions or criticised my arguments. I have learned much but mostly about the 'liberal' mindset... They defend QE that enriches the banks as opposed to the people in the interests of the people! Mad. They decry big business but support bailing out the banks in the interests of the common man. They support taxation as a means of social engineering - or vote buying - rather allowing fair competition in which all strive to improve themselves... And all this is 'good' for the common person and 'liberal'? Crickey! Seems to me that those who today call themselves 'liberal' misrepresent themselves. How can you call yourself a 'liberal' when you advocate economic and other measures (such as gun control) that empower the state and the 'too to big to fail and jail' banks as opposed to the people? Other names come to mind but I shall restrain myself. Out before I assert something more contrary to others taste.

[astralis]

snapper,

So I point out that the last graph you 'quoted' was predictive and that's an assertion... Is it true or not? Since the graph forecasts what debt as percentage of GDP will be in 2022 it is clearly predictive. Not able to argue about that you resort to moaning that I am making an assertion!

this is a general observation regarding your arguments.

Just one which you know to be currently false as the Fed keeps interest rates artificially low

"artificially low" is nonsensical. there is a Fed. the market will calculate the actions of the Fed into its movement. you might as well say that as long as there is a fed, all market actions are "artificial".

It's ok for you to 'assert' anything right or wrong but not ok for me to assert that your assertion is incorrect?

stop playing the victim. i never said it wasn't "ok" for you to do so, but that you refuse to back up your assertions with DATA. as i do. as DOR does.

Most of my personal positions are long and in the futures markets.

which doesn't make sense if your prediction is that the actions of the Fed will cause a huge collapse. the intelligent thing to do based upon your prediction is to stay in cash and then buy when the market collapses.

The first steam engines were entirely private run on and then between coalmines and for pumping and later for transport.

actually much of the investments for steam engines came from university/public support, along with of course the coal mine interests. the state certainly had an interest in developing those highly lucrative mines, as well as the rails.

The US Fed was founded to fund WW1

LOL, the Fed was founded in 1913. check your history.

Nixon left the Bretton Woods agreement gold agreement to fund the Vietnam War.

god, check your history again. it was PART of the reason, but check which nations left the Bretton Woods agreement first.

Look the point is about this whole debate whether a free market is more efficient at creating growth than a Government or a Central Bank flooding the market with cheap money? Can people decide what to do with their money better than the Government?

this is a FALSE argument. there is NO ONE here who says that the government or central bank is ALWAYS more efficient at creating growth.

there are, however, ISOLATED SITUATIONS where the government CAN be more efficient. a major recession/depression is, by definition, extremely economically inefficient.

Anyway as I risk being censored for making contrary assertions to those of others I shall leave this thread

again, stop playing the martyr. no one is censoring you-- your arguments are weak and easily punctured when faced with data. note that it is not me, nor DOR, whom relies on notions of conspiracy theory or continually dodges the question as to why the predictive value of your theories aren't panning out.

[snapper]

You've already clearly acted in a political manner as a moderator with Dale in my view and when you criticise me for 'making assertions' which merely say that your graph is predictive and therefore not necessarily correct (which it clearly isn't) I am know full well that continuing to debate with you is a waste of my time of yours. Thank you though.

[astralis]

snapper,

You've already clearly acted in a political manner as a moderator with Dale in my view

dale was WARNED because he was off-topic and was engaging in flame bait, and his case was handled not just by me but by several other mods.

i made special note that YOU were an example of civility despite disagreement, which you're doing your level best to disprove with that statement above.

feel free to disagree with me as you like, but don't throw around accusations of tyranny and censorship. if i am indeed guilty of such, per WAB rules it is upon you to report this to the mods. we're very careful here to ensure that our administrator/moderation work doesn't interfere with regular posting.

in any case, i noticed you never answered any of my points above, so i'm glad you agree with me at least on this one point that further debate is useless.

[dalem]

astralis-

If one guy says you're a bully who stifles discussion, you can ignore him. If two or three others say the same thing, it's time to admit that it may be true.

-dale

[astralis]

dale,

it's a case of one person using your case to play the martyr. no more, no less. meanwhile, i will not debate admin/mod actions with you in public.

i trust WAB can accurately judge the rightness or wrongness of my admin/mod actions regarding any of the posts in question.

thread closed.