|
| ||||||||||||||||||
daily show,jon stewart,ron paul,end the fed,federal,reserve TDS - Jon Stewart Interviews Ron Paul 9/29/09TDS - Jon Stewart Interviews Ron Paul 9/29/09tags:Ron Paul discussing his book End the Fed. 
Comments  who voted for this video demon_ix
- eric3579
- Djevel
- BreaksTheEarth
- UsesProzac
- gwiz665
- finch451
- cdominus
- Lowen
- curiousity
- GeeSussFreeK
- Crosswords
- GoodAttorney
- enoch
- Ursapolar
- acidSpine
- enon
- MaxWilder
- my15minutes
- lesserfool
- sepatown
- mizila
- KnivesOut
- rubadub
- mrsid
- chilaxe
- dotdude
- Fade
- crotchflame
- COriolanus
- MycroftHomlz
- Morganth
- xxovercastxx
- Unaccommodated
- Kevlar
- gtjwkq
- jimnms
- rbar
- rgroom1
- longde
who has this post bookmarked gwiz665
TDS - Jon Stewart Interviews Ron Paul 9/29/09 Related Videos
| Watch this Video NextFriends O' the Sift Top New Videos by Vote  Subscribe Top 15 Sifters of All Time Top 15 Sifters of the Past Week Newest Appreciated Comments | |||||||||||||||||
Stumble This
In the case of the Federal Reserve, people just don't understand it, so if it is going to change, the change has to come from government.
I'm not an American in any way. I don't live in the US, I don't have an American citizenship and my last valid visa expired in June. This issue is not personal to me, it's not something that will affect my life in any way.
I may have made a mistake when I posted a photo which mentioned anti-tax protesters when I meant to refer to Teabaggers in general, specifically anti-healthcare reform protesters.
Your healthcare system as it is today is the most absurdly anti-consumer product that you can buy, and yet so many citizens were convinced that they ought to take to the streets to defend it.
At the moment, any insured American can lose his insurance at any moment, and join the statistics Rep. Grayson quoted. Can you even call that insurance at this point?
Anyway, new photos to make a better point:
http://www.preemptivekarma.com/archives/TeaBaggers%20010.jpg
http://www.bobcesca.com/images/medicare_sign_teabaggers.jpg
I'm guessing social liberals will get their way, even though all this fuss about healthcare is pointless. You can't pay insurance when your money is worthless.
Just in recap, printing a dollar does not increase total goods and services available for consumers. Having a legal tender that is completely subjugated by people who benefit off inflation in unwise. Having a tender than does not or can not scale with increased economic growth is stifling. And having a currency that can be easily undermined by inflation is impoverishing.
The government doesn't need to print more money in order for inflation to happen, in fact, inflation is naturally associated with growth. Look at China, it had years of high inflation despite the government being fiscally conservative. Inflation simply represents the speed at which people exchange money. Suppose everybody decided to double their prices. We'd have 100% inflation overnight even though the total amount of money hasn't changed.
Small amount of inflation is needed for the economy to function well, so called the "grease effect" of inflation; both US and European central banks have lower limits on how low they will allow inflation to go. Bank of England aims to have it between 2 and 3%.
Price fluctuations that change with demand is not inflation, rather, it is finding a new market value based on demand. The fact is Chinese people can afford more with wages improving. When goods are more highly demanded then prices go up, this is not inflation but basic supply and demand. Inflation is when demand stays the same but prices increase.
By function well, you mean function in the way you would have it function. IE, that investment be easy and saving be harder. While no doubt large wealth building takes harvesting capital and investing it, there is no reason or proper justification that it should come at the expense of people who save. As inflation sits, those who safe are punished at the behest of those who invest. It doesn't have to be this way, but those who acquire large amounts of wealth are able to influence agendas and ideas to suppose that it is in the best interests of us all to want our buying power to be diminished.
Yes it is. http://en.wikipedia.org/wiki/Inflation
Increases in prices cause increases in incomes and vica versa. Hence there's no direct relation between inflation and buying power.
http://en.wikipedia.org/wiki/Monetary_inflation
That is the original and true definition of inflation.
Since central banks, or government treasury departments, directly cause inflation by debasing the national currency, these institutions have a vested political interest in redefining the term "inflation" as a rise in prices.
The reason the use of the word "inflation" has changed to mean "increasing prices" over the past 50-70 years is that Keynesian economics has been taught in universities around the world during the same time period. Keynes advocated creating economic growth by governments spending money they don't have. It is natural that the institutions that follow Keynesian policy have an incentive to blame inflation on something besides government policy. Thus the government defines inflation as an increase in the Consumer Price Index, instead of the increase of the money supply. The Consumer Price Index itself has been weighted to reduce the importance of food and fuel - the very sectors of the economy where the effects of inflation are always the most obvious.
-- taken from a wikipedia discussion post, because I couldn't have said it better myself.
Ron Paul may be sincere, but he is a physician with no formal economics training, and his macro-economic proposals (for instance, that we should encourage deflation), would go against advice of any established macro-economist.
"When goods are more highly demanded then prices go up, this is not inflation,"
Yes it is. http://en.wikipedia.org/wiki/Inflation
Increases in prices cause increases in incomes and vica versa. Hence there's no direct relation between inflation and buying power.
This isn't always the case as observed in the Carter years. Inflation can rise without wages increasing at the same rate. The term was stagflation, and was against everything Macro economics said was possible, which is why I say it is an invalid model, as did Von Mises.
Also, you don't need to have a degree in economics to be well informed on the subject. Trusting in academia to determine intellectual clout is unwise. Moreover, academia is chop full of people interested in validating Macro economics, it keeps the research grant money coming.
That's like accusing "academia" of reinforcing anti-Creationism theories because it keeps the grant money coming. Partially true (you'd have a hard time funding Creationist research, or anti-modern-economics research), but besides the point. Macroeconomics is a science, and we can either choose to listen to scientists regarding macroeconomics issues, or to politicians/clergy etc.
Ron Paul's notions of money are positively quaint. They hark back to the times when money was in form of gold coins produced by government. Nowdays, most money is virtual, and created by private institutions, not the government. Imagine a new bank extending the loan to you. They simply create some virtual bits crediting your account, and since most people never convert their loans to actual cash, they are free to create a lot of those virtual dollars. The Fed makes restrictions of how much extra money they can create that way. If we got rid of the Fed, the banks could essentially "print" unlimited money, and then go under when someone tries to cash it, something that happened around the era of Wildcat Banking in the USA (instead of bits, they issued bank paper, which people used as money).
Look, austrians are predicting a major collapse of the US economy in a few years, the value of the dollar falling because of all the monetary inflation the Fed is creating because they're thinking like keynesians. Once foreign nations wise up and stop lending us all this money that we're never paying back, we're screwed.
I know you don't think that will happen, that the recession is over, etc. However, IF it does happen, just like that, will you change your mind about austrian economics, or will you still stick to your keynesian view of the world?
If there's some kind of collapse due to Fed lowering interest rates, I'll conclude that such aggressive lowering was not a good idea.
Hmm, I doubt you would make the connection that low interest rates contributed to such collapse, even if it did. I don't know, just doesn't sound very keynesian to me.
However, there's no risk of "foreign nations" stopping lending to us because they are too dependent on our spending. If China stops lending money to US, US stops buying Chinese goods, and Chinese economy crashes. So they are forced to keep lending money indefinitely
yaroslavvb, think about it, as the owner of a restaurant, would you lend money to your customers to eat at your restaurant? What if they kept borrowing so much that they couldn't ever pay you back in a timely manner? Would you keep lending to them indefinitely hoping to get paid back one day? After a while, would you actually need the spending of those borrowing customers, wouldn't it make more business sense to deal with regular non-borrowing customers instead?
We are spending THEIR money, the rest of the world is not going to be fooled forever. In business, there's such a thing as "cutting your losses".
At the cost of weakening their own currency, only a matter of time before that doesn't work anymore, cause we sure in hell ain't paying any of that debt back. We can hardly pay interest.
Exactly, those bonds are worthless, and we're running out of suckers to buy them, fast.
>> ^yaroslavvb:
I wouldn't lend money as a restaraunt owner, which shows how different the decision-making process is made at the country level.
To me it just shows you had trouble understanding my analogy. Yes, you would lend money as a restaurant owner, even to your own customers, if you thought that they will pay you back. Ever heard of a tab?
There is no absurdity in lending money to your customers, it's only absurd to keep doing it once you realize they can't pay you back. Then you're faced with a tough decision: Whether to lose your customer and all that money they owe you or keep wasting more money hoping you'll see any of it again. Eventually, their spending becomes just an expense, because they're spending your money.
On a country level it actually makes sense for China to keep buying US bonds despite the trade deficit because it drives up employment inside the country.
Employment is good because it leads to production. China produces enough to finance our debt, but that is in no way desirable to them, consuming is not a big favor the US is doing the world. Anyone can be a consumer, hell, hand me 1 million dollars and I'll consume it real fast for you. What you want is for consumers to PAY you, something the US hasn't done for a while now.
... which is exactly what China wants to do. China *wants* to keep yuan weak and dollar strong to keep it's forces competitive. In fact that's one of the points of conflict between US and China right now -- US wants China to release yuan and let exchange rates be set by the market, while China wants to artificially keep it weak in order to keep Chinese goods cheap abroad
>> ^yaroslavvb:
"Trusting in academia to determine intellectual clout is unwise. Moreover, academia is chop full of people interested in validating Macro economics, it keeps the research grant money coming."
That's like accusing "academia" of reinforcing anti-Creationism theories because it keeps the grant money coming. Partially true (you'd have a hard time funding Creationist research, or anti-modern-economics research), but besides the point. Macroeconomics is a science, and we can either choose to listen to scientists regarding macroeconomics issues, or to politicians/clergy etc.