Changes to The Constitution.

[Loren Pechtel]

Why should the average factory worker need to care about 2% or risk free overnight money at 5.3%?

You are making this too complicated, money is (or at least should be) nothing more than a medium of exchange representing the value of labor and capital to produce goods. And if you change that value over time, you are stealing from someone. For example: if I sweep your floor and you pay me $10 today I should be able to put that $10 in a retirement bucket. And in 50 years when I retire, I should then be able to take that same $10 and buy exactly what the same goods and services I produced. The average wage earner should not need to be a speculative stock broker investment banker money changing lawyer simply to set aside a retirement.

Anyway, this is more about morality than technical financial competence. 2000 years ago a person by the name of Jesus destroyed the money changers tables and then got crucified for it. History may not repeat itself but it sure does rhyme a lot.

You are just doubling down on showing you don't understand.

Target inflation rate: 2%. Average long term stock market return: 6%. (Beware of survivorship bias, the 8% number you often see is wrong.)

In our world we expect to average $71 ($10 * 1.04^50 years) in that bucket. If you only have $10 you made some pretty bad choices!

 

[Loren Pechtel]

Wow look at all those fancy numbers and calculations......yet the average American can not even come up with $400 in an emergency for some reason......

Because the average American chooses lifestyle now vs saving for the future. And that question was poorly designed (I suspect on purpose) anyway as it disregards credit. While we never flew that close to the edge there was a period where we had no appreciable savings--because every month we would see what was extra and add it to our mortgage payment. Had we been faced with an unexpected bill it would have gone on a credit card and next month more would go to paying the credit card and less to paying extra on the mortgage. We deliberately planned it that way as we saw no need to have money sitting around when there was a perfectly safe tax-free investment available.

 

[Loren Pechtel]

I agree with RVonse that a stable currency over time is a desirable goal, but eliminating the Fed would not accomplish that goal and would permit more frequent economic cycles with larger amplitudes.

The fed is also very un-democratic for a supposedly republic democracy. They are run by past private banksters who are not even accountable to congress or the people. Ron Paul was not even allowed to audit what they are doing. Yet they have power over a tremendous influence of the economy in general and livelyhood of the citizens.

It would be one thing to have such an organization if it was doing the perfect job which it isn't. Because failure is much more easy to accept if was reached democratically.

This was be design to shield them from political pressure to turn up the economy before an election.

They have been doing a good job. Making them "accountable" would make them do a worse job.

 

[Loren Pechtel]

Why is China's and Republic of Congo savings rate so much higher than the US? https://www.investopedia.com/articles/personal-finance/022415/top-10-countries-save-most.asp

Is it because those people have the great jobs that are paying so much more than the US?

Culture. The Chinese are obsessive savers and headed for disaster because they have bid real estate up far beyond it's real worth. (The ratio of purchase price to rental price is way out of balance.) It's not a lack of inflation or high interest paid by the banks.

 

[Loren Pechtel]

Since when was (is) the federal government in the business of putting out fires? That is usually done at the city or even the county level. If the federal government has been engaged to put out house fires, it is even bigger and more bloated than I thought.

You never heard of the US Forest Service???

Dude, that is a corrupt organization. I've tried to order two forests and they won't even return my phone calls!

And they won't fix mine!

(Hilary dumped 10 inches of rain on it. The whole area is shut down, you're not allowed up there without permission. They've been rebuilding the roads and so far have only done a bit of inspection of the most popular trails. The trail to Mary Jane Falls is known to have a 20' x 20' canyon carved through it. The school is expected to remain closed for the school year.)

 

[Loren Pechtel]

Which government jobs entail doing nothing?

Be specific; Give me one example of a government job that you think achieves nothing at all.

Missile silo command crew. You had better hope they do nothing.

 

[Loren Pechtel]

Do you really think that public opinion is the best way to select experts, and is better than merit and experience based appointments?

For starters, I think the public is entitled to an audit.

How far do you think I would get with IRS if I told them I was educated but they weren't so no audit could ever be required of my taxes?

That is your argument here.

Audit what? The fed doesn't really have much of anything to audit. Their real role is making some key decisions--not something where an audit even makes sense.

 

[Loren Pechtel]

If there was no Fed, what would replace it? Surely you would not trust monetary policy to a group who cannot even pass a budget?

What were we using before the fed came into existence? Why is it so wrong to just allow the free market decide where interest rates should be? Why does there need to be dictator banksters to decide what the free market should be doing? What the free market does is make price decisions at the lowest possible level where the rubber meets the pavement. Which is much more efficient than any committee can hope to be.

You have said there were big swings before the fed but that was nearly 100 years in the past. Before much faster communication, computers, chat gp, etc which would probably clear cycles much faster and smoother.

There were big cycles because there was no force to stop them. This happened in the era of the telegraph, communications wasn't the cause. The Fed acts as a force always pushing towards the middle and the result is better for the people. It's one of the big successes that government has accomplished.

However, the Republicans want everything under direct political control rather than expert control. Alternative "facts" writ large. Decree problems out of existence.

 

[Elixir]

You never heard of the US Forest Service???

Something like 70% of this County is Forest Service Land. They manage it. We've had their controlled burns get out of control and flames keeping us up at night, just a couple years ago. Helicopters were dipping from the river on our land, sometime lined up 2-3 at a time within 150 yards of our house.

I gotta say smoke jumpers are some of the baddest ass people I ever met. I'm not sure if they're officially Forest Service or somehow otherwise contracted, but no matter.

Forest Service:
13 billion dollars contributed to the U.S. economy by visitor spending each year

500 million approximate acres of private, state and tribal forests on which the Forest Service supports sustainable management

193 million acres managed by the Forest Service

27 million annual visits to ski areas on national forests

7.2 million acres of wetlands

36.6 million acres of wilderness

400,000 acres of lakes

277,000 heritage sites

158,000 miles of trails

57,000 miles of streams

10,000 professional wildland firefighters

9,100 miles of Scenic Byways

5,000 miles of Wild and Scenic Rivers

4,300 campgrounds

154 national forests

122 ski areas

98 percent of wildfires are suppressed within the first 24 hours they are detected

50 percent reduction in the number of bats broken during Major League Baseball games due to the Forest Service research

20 percent of America’s clean water supply provided by the national forests and grasslands

20 national grasslands

13 scientists awarded the Nobel Prize for their work with the 2007 Intergovernmental Panel on Climate Change

I don't know about you, but "50 percent reduction in the number of bats broken during Major League Baseball games" sold me.

 

[Jimmy Higgins]

You never heard of the US Forest Service???

Something like 70% of this County is Forest Service Land. They manage it. We've had their controlled burns get out of control and flames keeping us up at night, just a couple years ago. Helicopters were dipping from the river on our land, sometime lined up 2-3 at a time within 150 yards of our house.

I gotta say smoke jumpers are some of the baddest ass people I ever met. I'm not sure if they're officially Forest Service or somehow otherwise contracted, but no matter.

Forest Service:
13 billion dollars contributed to the U.S. economy by visitor spending each year

500 million approximate acres of private, state and tribal forests on which the Forest Service supports sustainable management

193 million acres managed by the Forest Service

27 million annual visits to ski areas on national forests

7.2 million acres of wetlands

36.6 million acres of wilderness

400,000 acres of lakes

277,000 heritage sites

158,000 miles of trails

57,000 miles of streams

10,000 professional wildland firefighters

9,100 miles of Scenic Byways

5,000 miles of Wild and Scenic Rivers

4,300 campgrounds

154 national forests

122 ski areas

98 percent of wildfires are suppressed within the first 24 hours they are detected

50 percent reduction in the number of bats broken during Major League Baseball games due to the Forest Service research

20 percent of America’s clean water supply provided by the national forests and grasslands

20 national grasslands

13 scientists awarded the Nobel Prize for their work with the 2007 Intergovernmental Panel on Climate Change

I don't know about you, but "50 percent reduction in the number of bats broken during Major League Baseball games" sold me.

So one bat died instead of two. Big deal!

Ever ask yourself why one division in the government needs some many trees? Have ya?!

 

[Tigers!]

If someone offered you a job where you're going to be paid tomorrow, and I offered you a job doing the same work, but say I will pay you in 2063, which job would you prefer to take, knowing that inflation will be zero?

Is the pay the same for the work offered by you or that other chap?

Yes, obviously.

The only difference is the timing of when the pay packet arrives.

Which job would you take? And why?

Since bills still come in a bird in the hand now is generally better than 2 in the bush much later on.

*Unless you can get my bills held off until 2063 (though I will have passed my century by then).

 

[Swammerdami]

The mechanics of money and its creation is an amazingly confusing topic! People who can plow through difficult physics problems often make simple errors when thinking about money creation.

Most money in the U.S. is created by private banks! (This was disputed in earlier threads but ... Spoiler alert! ... I am correct as anyone with Google or Wikipedia can readily confirm.)

It is said that that money is created by "fractional-reserve banking" but even this is slightly confused. In one view the alternative to 10% reserve is not 100%, but 0%. "0% reserve money creation" has been around ever since Oog stole one of his father's coconuts and used it to seduce the lovely Umanunna.

For centuries silver or gold was money. The French words for "money" and "silver" are the same word. The Thai words for "money" and "silver" are the same word. Liquidity wasn't a common problem since coins weren't actually exchanged in many transactions. Large cash payments involved transporting precious metals. Paper money was unheard of except for some scams like the Mississippi Bubble in 1718.. By the 19th-century, private banks were busy creating money, but in the U.S. it was a libertarian paradise: little or no government regulation. Their paper money was nominally denominated in gold or silver, but merchants had to subscribe to a newsletter showing how many pennies on the dollar the various privately-issued banknotes were trading for.

But regardless of how worthless a given bank's paper might become, at least the "U.S. Dollar" itself had a definition: it was 26.73 grams of 0.900 fine silver. (26.73 grams was set as the standard because it was the average weight of a Spanish "piece of eight" which was used as the American dollar before the U.S. government started minting its own.)

The FRB's main function is to define the U.S. Dollar and to ensure its stability. What would "One Dollar" even mean if the FRB were to disappear? Before 1933 the "dollar" was defined as a certain amount of gold, and all U.S. money was, at least nominally, a promise to redeem in gold. Does RVonse want to return to a gold standard? Will Bitcoin be the new gold in his vision? Without answers to such questions, "abolishing the FRB" is just gibberish.

I hadn't really thought about the reddened sentences until I typed the above yesterday. If the FRB is abolished what will "One Dollar" (or "One Randpaul" -- whatever the Ilk wants to call it) even mean? Banks create money today because they have a reserve of FRB banknotes (or FRB electrons!) What happens to all that paper and electrons if the FRB disappears? If the FRB's pretty banknotes are somehow "grandfathered in" as "real money," what about all the FRB's electrons!

I think Senator Paul advocates a return to the gold standard. Many consider that stupid, but at least it's a plan! RVonse offers us only "whatever." The only thing we can be sure of about RVonse's plan is that "whatever" is NOT to be designed by professional economists -- they're the same Hillary-Sorosists who advocate having an FRB!

 

[bilby]

Which government jobs entail doing nothing?

Be specific; Give me one example of a government job that you think achieves nothing at all.

Missile silo command crew. You had better hope they do nothing.

They still do stuff. They have to test their equipment and run drills to ensure their readiness.

And they arguably achieved the avoidance of nuclear war for the past 77 years, which is no mean feat.

 

[bilby]

If someone offered you a job where you're going to be paid tomorrow, and I offered you a job doing the same work, but say I will pay you in 2063, which job would you prefer to take, knowing that inflation will be zero?

Is the pay the same for the work offered by you or that other chap?

Yes, obviously.

The only difference is the timing of when the pay packet arrives.

Which job would you take? And why?

Since bills still come in a bird in the hand now is generally better than 2 in the bush much later on.

*Unless you can get my bills held off until 2063 (though I will have passed my century by then).

Exactly.

So money today is worth more than money at some future date - you (like any sane individual) would prefer the former over the latter.

Money being worth less in the future than it is today IS inflation. Inflation is an unavoidable long-term feature of any viable currency, simply because people prefer money now over money later.

 

[RVonse]

Why should the average factory worker need to care about 2% or risk free overnight money at 5.3%?

You are making this too complicated, money is (or at least should be) nothing more than a medium of exchange representing the value of labor and capital to produce goods. And if you change that value over time, you are stealing from someone. For example: if I sweep your floor and you pay me $10 today I should be able to put that $10 in a retirement bucket. And in 50 years when I retire, I should then be able to take that same $10 and buy exactly what the same goods and services I produced. The average wage earner should not need to be a speculative stock broker investment banker money changing lawyer simply to set aside a retirement.

Anyway, this is more about morality than technical financial competence. 2000 years ago a person by the name of Jesus destroyed the money changers tables and then got crucified for it. History may not repeat itself but it sure does rhyme a lot.

You are just doubling down on showing you don't understand.

Target inflation rate: 2%. Average long term stock market return: 6%. (Beware of survivorship bias, the 8% number you often see is wrong.)

In our world we expect to average $71 ($10 * 1.04^50 years) in that bucket. If you only have $10 you made some pretty bad choices!

If you had $10 in 1964 it bought $74.52 worth of goods in 2013 so you lost inflation adjusted wealth. https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=10.00&year1=196401&year2=201301

But you lost even more than that.

1) The governments inflation calculator doesn't tell the truth. I can remember when you could buy a glass bottle of coke from a vending machine for a dime. Now the equivalent costs $1.50. So I know from my experience that real inflation over 50 years has been more like 150% or $150 worth of goods and services that should have been in your bucket.

2) You also had to pay either interest or federal and state income tax gains each and every year on your $10. So more and bigger holes in your bucket. You would be compelled to lose that amount to federal and state taxes or you were compelled to lose your freedom to spend that money if it was placed in any sort of retirement account. Illiquid funds that can not really be spent at your will are NOT savings. If the government (at their will) can make any future laws over these accounts, all of those funds really belongs to the government even if your name is on the account.

 

[RVonse]

The US doesn't need a King of the dollar to rule the world economy. All that is needed is a dollar that buys the same goods and services today as it would have bought 50 years ago. Whether that means tying the dollar back to gold or bit coin I can not say. But letting an unelected committee of insider bankster bureaucrats control everyone's economic destiny is certainly not the answer.

Worst of all the fed has cheated humanity in general and is stealing everyones incentive to save. How does a young person ever manage to save enough to retire when he puts his(her) savings dollars in a bucket that has big holes in it?

A system with zero inflation would be ideal. However, we do not have perfect control of the inflation rate and deflation is far more harmful than inflation. Thus we aim to keep the inflation rate such that it almost never dips below zero.

As for the young person saving--there are no holes in the bucket. Inflation is factored into interest rates. If you had 0% inflation you would find the bank paid about 0% interest and probably would charge you for having an account at all. The problem is bank deposits aren't a viable investment option regardless of the inflation rate. If you want your savings to grow you need to look at the stock market.

But the stock market is very risky. If a young person does not want to accept that risk and responsibility (or pay someone else for fees) for his retirement savings he will rapidly lose wealth to inflation. In a better world that would not be the case.

 

[RVonse]

Do you really think that public opinion is the best way to select experts, and is better than merit and experience based appointments?

For starters, I think the public is entitled to an audit.

The Fed is audited by a private independent firm every year. The audit is available to the public. The GAO audits any lending by the Fed.

Either you are misinformed or you have something different in mind when you refer to “ audit”.

In End the Fed, Paul argues that the Federal Reserve was created to bail out banks when they got into trouble. He says that this is bad for competition in banking, as it strengthens the big banks. Paul argues that the Fed is both corrupt and unconstitutional

He wanted some transparency for the American people....but in the end the democrats shut him down with party politics: https://www.usnews.com/news/article...s-audit-the-fed-bill-though-sanders-votes-yes

 

[RVonse]

Anyway, I'm not sure Powell is as horrid as some imply:

Money Printer Go Brr Jerome Powell GIF - Money Printer Go Brr Jerome Powell Cash - Discover & Share GIFs

Click to view the GIF

tenor.com

 

[ZiprHead]

What makes you think Paul has any qualifications to speak on monetary policy?

 

[laughing dog]

Do you really think that public opinion is the best way to select experts, and is better than merit and experience based appointments?

For starters, I think the public is entitled to an audit.

The Fed is audited by a private independent firm every year. The audit is available to the public. The GAO audits any lending by the Fed.

Either you are misinformed or you have something different in mind when you refer to “ audit”.

In End the Fed, Paul argues that the Federal Reserve was created to bail out banks when they got into trouble. He says that this is bad for competition in banking, as it strengthens the big banks. Paul argues that the Fed is both corrupt and unconstitutional

He wanted some transparency for the American people....but in the end the democrats shut him down with party politics: https://www.usnews.com/news/article...s-audit-the-fed-bill-though-sanders-votes-yes

Apparently Rand Paul feels the current annual audit is inadequate. From your link, it seems (although it is not clear), that some want an audit to include the content of operational and policy discussions.

I think the US Senate should model the type of audit it wishes the FRB to have so that the American people get the transparency their deserve from every gov’t institution.