Alexandria Ocasio-Cortez

[Loren Pechtel]

Laffer curve.

Don't make me laff.

There is a point where it's beneficial. There's a point where it's harmful.

What is "it"? I listed a bunch of positives and negatives; To which (if any) are you referring?

​

Beneficial goals include:

• A low inflation target managed by adjusting interest rates
• Fiat money not pegged to any commodity or external currency
• Infrastructure construction and maintenance paid for through deficit spending
• Increased deficits in response to low growth (or recession); smaller deficits (or even small surpluses) in response to strong growth.
• A balance between public and private ownership, with natural monopolies and essential services (eg healthcare) publically owned and funded, while competitive and luxury goods are made and marketed by private companies.

​

Detrimental goals include:​

• Central planning of production
• Balanced budgets (treating national budgets like household budgets)
• Commodity money, or money pegged to a commodity
• Income Tax cuts (or increased deductions/exeptions/exemptions) for the wealthy
• Privatisation of natural monopolies, and/or allowing monopolies to form (including regional or local monopolies)

You seem to think that no matter what the optimum amount is higher. But look at what has happened to countries that let it get out of hand.

The optimum amount of what?? I should look at what has happened to countries that let what get out of hand???

Your response apoears to be a knee-jerk reaction to reading the first few words of my post, and (incorrectly) guessing what the rest of it would say.

Perhaps read it, try to understand it, think about it, and then respond to what it actually says. I know it's easier to scan for keywords, and then re-type your canned reaction to seeing those keywords; But it does make you look like a crazy person or an idiot, when your canned response is such a wild non-sequitur.

I guess I didn't make myself clear enough.

The Republicans take it on faith that we are on the right side of the Laffer curve.

You are taking it on faith that we are on the left side of the curve for deficit spending.

 

[Loren Pechtel]

Because prices = money supply/goods and services.

I thought I'd pointed out the arithmetic blunder here before.

M⋅V = P⋅T​

It is V, the Velocity of Money, that you overlook.

I've snipped off the rest of your post. To pursue it would be like answering questions about relativity after you start with E-c².

"Money supply" can be interpreted either way. I was interpreting it as with the velocity already factored in.

 

[Loren Pechtel]

where G is govt spending (except transfers such as wefare payments). It's a component of - not something subtracted from - national income.

People struggle with this because they somehow think the same doctors treating the same patients - or the same teachers teaching the same pupils, etc - in the private sector adds to GDP, but is subtracted from GDP in the public sector. The common confusion of macroeconomics with a household budget.

If the govt net ("deficit") spends a billion dollars, both GDP and national debt increase by a billion dollars. Same debt to GDP ratio, bigger economy, all else being equal.

But all else is rarely equal since that spending effects the other components of GDP. That effect is called the 'fiscal multiplier'. Net govt spending might "crowd out" more efficient private sector use of real resorces and have a negative effect on the other components.

The problem here is that you also added a billion dollars * velocity to the money supply.

And your percentage is bonkers. Check your math!!

If your argument was correct governments could simply fund themselves with the printing press. But we know what happens when they try it.

 

[Loren Pechtel]

(affects, apologies..)

..just to add that it isn't a silver bullet or free lunch. Multipliers are variables, not constants. Enough net govt spending would eventually "crowd out" more efficient private sector use of real resources (Soviet Union..?), but evidence suggests that we're some way from that.

The problem here is that the costs take a long time to roost. The ever increasing portion of the budget that simply goes to paying interest. We simply do not have a long enough observation window to truly measure the effects.

In the short run deficits clearly help and austerity clearly hurts. That doesn't mean the same thing applies to the long run.

 

[Swammerdami]

Because prices = money supply/goods and services.

I thought I'd pointed out the arithmetic blunder here before.

M⋅V = P⋅T​

It is V, the Velocity of Money, that you overlook.

I've snipped off the rest of your post. To pursue it would be like answering questions about relativity after you start with E-c².

"Money supply" can be interpreted either way. I was interpreting it as with the velocity already factored in.

Really?? Anyway, that's all the more reason for your formulation to be wrong. Money sitting idle in excess reserve accounts has very low Velocity.

 

[Swammerdami]

Because prices = money supply/goods and services.

I thought I'd pointed out the arithmetic blunder here before.

M⋅V = P⋅T​

It is V, the Velocity of Money, that you overlook.

I've snipped off the rest of your post. To pursue it would be like answering questions about relativity after you start with E-c².

"Money supply" can be interpreted either way. I was interpreting it as with the velocity already factored in.

Really?? Anyway, that's all the more reason for your formulation to be wrong. Money sitting idle in excess reserve accounts has very low Velocity.

Was I too dismissive? Should I have asked for a citation for this new terminology and hoped that the ground-breaking research was not behind a pay wall?

But then I remembered that this was not the first time you'd misunderstood "Money." IIRC, I advised that you start with Wikipedia:  Money supply. Did you ever do that? Or are you still stuck in your iconoclastic view from 2022?

• Money is created by private banks, in a process called "fractional-reserve banking."

This depends on how you define "money".

Uhhhh. Are physicists confused about the differences among force, energy and power? Why do you think economists haven't agreed on the meaning of "money"?

Fractional reserve banking certainly increases the movement of money, but that doesn't mean the total amount of money has actually increased even though for economic purposes it has.

I like to compare it to a wheel. Stick a dollar on it and turn the wheel. From the standpoint of the economy you count that dollar every time it comes around and you see it again--but it's really still just a dollar. Fractional reserve banking is spinning the wheel, not printing dollars.

For the kibitzers: This is all completely wrong. Or rather it's a Humpty-Dumptyish viewpoint by someone who didn't take college econ because he "didn't need to"; can figure it out all for himself; and is careful to avoid even a page like  Money supply for fear of being exposed to academic propaganda.

- - - - - - - - - - - - - - - - -

This Board is really something! In the "Historical Jesus" thread, for example, we have several players who know much more than the professional historians. And unlike the professionals, who scrutinize ancient documents for clues, IIDB's historians don't need to review a single document! They can pull all the conclusions they need out of thin air.

 

[bilby]

Laffer curve.

Don't make me laff.

There is a point where it's beneficial. There's a point where it's harmful.

What is "it"? I listed a bunch of positives and negatives; To which (if any) are you referring?

​

Beneficial goals include:

• A low inflation target managed by adjusting interest rates
• Fiat money not pegged to any commodity or external currency
• Infrastructure construction and maintenance paid for through deficit spending
• Increased deficits in response to low growth (or recession); smaller deficits (or even small surpluses) in response to strong growth.
• A balance between public and private ownership, with natural monopolies and essential services (eg healthcare) publically owned and funded, while competitive and luxury goods are made and marketed by private companies.

​

Detrimental goals include:​

• Central planning of production
• Balanced budgets (treating national budgets like household budgets)
• Commodity money, or money pegged to a commodity
• Income Tax cuts (or increased deductions/exeptions/exemptions) for the wealthy
• Privatisation of natural monopolies, and/or allowing monopolies to form (including regional or local monopolies)

You seem to think that no matter what the optimum amount is higher. But look at what has happened to countries that let it get out of hand.

The optimum amount of what?? I should look at what has happened to countries that let what get out of hand???

Your response apoears to be a knee-jerk reaction to reading the first few words of my post, and (incorrectly) guessing what the rest of it would say.

Perhaps read it, try to understand it, think about it, and then respond to what it actually says. I know it's easier to scan for keywords, and then re-type your canned reaction to seeing those keywords; But it does make you look like a crazy person or an idiot, when your canned response is such a wild non-sequitur.

I guess I didn't make myself clear enough.

The Republicans take it on faith that we are on the right side of the Laffer curve.

You are taking it on faith that we are on the left side of the curve for deficit spending.

No, I am not.

Where in my post did I say, or imply, anything of the sort?

My ONLY mention of deficit spending was:

• Increased deficits in response to low growth (or recession); smaller deficits (or even small surpluses) in response to strong growth.

Even if you were to incorrectly assume that my position is as pathetically simplistic as to treat all deficit spending as equal (which it emphatically is NOT, rendering the "Laffer Curve" more than a little silly), I would appear to be "taking it on faith" that whether deficits are good or bad varies depending on the state of the economy.

Which is so utterly at odds with your accusation as to force me to assume that yet again you have failed to read, or to understand, my post.

So, again, could you PLEASE respond to what I actually said, rather than to what you hoped I might say, as I refuse to let you speak for me in order to fit my position in to your simplistic and frankly insulting assumptions.