trillion dollar bailout! I'm no economist but hear me out

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you guys realize that the trillion or billion dollar bailout money comes out of nothing, meaning we are creating more debts.
 


The answer to ending the recession is to end the war and bring all of the troops home. Not only will that be millions of dollars a day that we won't be spending in Iraq but the troops will come home and spend all of that money that they are earning and not spending right now. History has shown that our economy has been its best after every single war we've been in.

I'm just making up these numbers out of thin air but assuming there are 250k troops in Iraq who each have $30k saved up, those troops will spend that money on things such as houses and cars. This amount may not sound like a lot but according to the law of "the velocity of money" each dollar that is spent is equal to $200 because of how many times it changes hands. So take X number of troops multiplied by Y (the amount of money each soldier has saved and will likely spend) multiplied by $200 and you have millions and millions of dollars that will stimulate the economy.
 
Make banks stable = make economy stable (ex. great depression)
Banks stable = people trust banks to save money
Saving money = giving money to banks
Give money to banks = give money to people who lend from banks
People who lend from banks = create more business

Yes, banks lending practices were lax to start with thus why we're in this mess.
Why did they do it? Competition between banks to give out more loans in good economic conditions. If everyone else is doing it, they have to do it as well. Can't compete? -> lose money or go out of business.
The price we pay to live in a free market.
Live and learn.
 
...Look what happened to Germany's currency after WWII.

WWI to be exact. What they did back then was printing more money which led to this huge inflation. If lots of money is in circulation the money loses it value which means that a bread doesn't cost $1 anymore but $200mill.

Check out this article Inflation - Wikipedia, the free encyclopedia (no dickroll)

If this is hard to understand then just imagine we wouldn't talk about money but gold. If everybody had loads of gold it wouldn't be worth shit.
 
The key thing here that people seem to not understand is that our currency is fiscal, meaning it has NO INNATE VALUE. The entire value of our dollar is COMPLETELY relative to the proportion of supply and demand of/for dollars in our economy. This is the reason inflation happens when money is printed, or paid out as suggested in this thread.

Imagine everyone in Canada+USA received 3million dollars. The instant this money was given out, it will have lost most of its value. Don't understand how? Well what if someone gave you 3 million dollars right now, would you go to work for 30-40k/year? Of course not! Neither would anyone else. They wouldn't even go to work for 100-200k/year. This means immediately firms would have to increase salaries if they want to keep their employees.

If salaries are raised, the firms need to find somewhere to fund that increase. So in turn they will raise product/service prices, etc.. etc.. Price of products and services go up, we (the average consumer) can't buy the same amount of things with 3million as we could before.

Things are slightly more complicated than my example, but you get the idea. If everyone in the country received a huge some of money, of the same value, and this money was being printed (because that's where the government is getting this money), then a value of our currency would fall very closely in line with the amount of currency printed. Result?

No long term change in our REAL ECONOMIC WEALTH
 
The goal is to create jobs...

Think about it...that's equivalent to around $300k per job. e.g. to create 4 jobs would require approx $1.2 million!!!! This money is not free. It'll come back to bite you guys back in the ass through tax and inflation.
 
The money supply would increase despite it going to a "few hands" vs everyone.

The money supply won't increase, they're not printing this money just to give to banks are they? (or are they? lol)

I don't know about you but if I wasn't in a particularly good situation at the brink of a recessions and I was given $300,000, I would be on the 1st plane to Thailand or Brazil.
 
The money supply won't increase, they're not printing this money just to give to banks are they? (or are they? lol)

I don't know about you but if I wasn't in a particularly good situation at the brink of a recessions and I was given $300,000, I would be on the 1st plane to Thailand or Brazil.

Most of the money is created electronically these days. Even if they give 300k to people, its mostly electronic. Either way there is an increase of currency in the economy which brings inflation.

By the way, if this is your view, you probably should leave USA as inflation IS coming. (I am in UK btw, its pretty much screwed too, and I have been considering leaving, though its not that easy as we all have ties.)

Oh and also about giving to the banks. Its a FUCKING SCAM people. Think about it. The credit crunch where by there is less liquidity/lending for consumers to buy hence loss in profits for companies. Hence the solution is to get banks lending again. So their solution is to takeYOUR money to give it to the banks, so that the banks could lend it back to you WITH INTEREST!!! Frickin insane.
 
By the way, I am against government intervention but if there is ONLY 2 choices. The bailouts or just giving currency to the citizen's (subject to usage clauses), I would go for the latter.
 
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Hannah, even if every redneck DOES go out and buy an iPod with the money, that still stimulates the economy.
For every imported electronic good, only about 10% goes back to the country where it was manufactured.
The RRP of a product generally gets sliced up with:
~30-60% going to the store on MOST electronic products (there are a lot of exceptions to this rule that lie on either side, but it works for most);
~2-15% going to cover stock losses & expenses (theft, damage, insurance, etc);
~5% to pay for transport;
(~10-20% for license to sell product in some instances);
~10-20% to purchase from the manufacturer.
So you're still looking at about 50-70% of the sale price staying within the economy, and being paid out in wages, or further needs of the store (i.e. handymen to fix shit, couriers, etc.) and trickling through as diminishing returns.

As for handing out money to people, aside from inflation, there are some things that Governments will always handle better than individuals, and sometimes even better than private enterprise (yeah yeah, burn the fiscal heathen).
You think anyone would build roads or sewage works other than the Government? Education's another. Sure, Government education isn't as good as private (in the US at any rate), but it's better than the big fat none that a lot of people would receive if it was all run privately, etc.
Sure, there's been a fair bit thrown at personal pet projects of senators and congressmen, but even that shit will trickle through the economy. It's not the area where the money is first spent that's really meant to be rejuvenating the economy.
I remember someone complaining about the money being tossed at Hollywood for more movies... Do you have any idea of the money most movies bring back into Hollywood from international box office sales? There are times when the secondary markets exceed the US box office sales. Hollywood is one of the US' biggest exports!

I can't remember who said it, but they hit the nail on the head. The stimulus package is basically throwing a whole heap of shit at the wall and seeing what sticks, and what will make the stuff around it stick.
 
Hannah, even if every redneck DOES go out and buy an iPod with the money, that still stimulates the economy.
For every imported electronic good, only about 10% goes back to the country where it was manufactured.
The RRP of a product generally gets sliced up with:
~30-60% going to the store on MOST electronic products (there are a lot of exceptions to this rule that lie on either side, but it works for most);
~2-15% going to cover stock losses & expenses (theft, damage, insurance, etc);
~5% to pay for transport;
(~10-20% for license to sell product in some instances);
~10-20% to purchase from the manufacturer.
So you're still looking at about 50-70% of the sale price staying within the economy, and being paid out in wages, or further needs of the store (i.e. handymen to fix shit, couriers, etc.) and trickling through as diminishing returns.

As for handing out money to people, aside from inflation, there are some things that Governments will always handle better than individuals, and sometimes even better than private enterprise (yeah yeah, burn the fiscal heathen).
You think anyone would build roads or sewage works other than the Government? Education's another. Sure, Government education isn't as good as private (in the US at any rate), but it's better than the big fat none that a lot of people would receive if it was all run privately, etc.
Sure, there's been a fair bit thrown at personal pet projects of senators and congressmen, but even that shit will trickle through the economy. It's not the area where the money is first spent that's really meant to be rejuvenating the economy.
I remember someone complaining about the money being tossed at Hollywood for more movies... Do you have any idea of the money most movies bring back into Hollywood from international box office sales? There are times when the secondary markets exceed the US box office sales. Hollywood is one of the US' biggest exports!

I can't remember who said it, but they hit the nail on the head. The stimulus package is basically throwing a whole heap of shit at the wall and seeing what sticks, and what will make the stuff around it stick.
Yeah, fair enough that a lot of it will still end up in the American economy, but it still remains a terrible way to deal with the crisis.

I completely agree that the government does a lot better job of creating jobs than a lot of enterprises, especially in manufacturing and construction, and even a lot of services.
 
The goal is to create jobs...
Do you want another job?

Why not shut down the electric plants and have people run on hamster wheels? That will create jobs.

Maybe people should start working full time at 10 and retire at 90. That will be more people working more jobs.

"Jobs" is valueless. A soldier's job during wartime is to kill and be killed. That's a shitty job. Working 12 hours a day knee deep in shit, that is a bad job.

What you want are productive jobs. You want people to produce things.

Building politically motivated bridges and roads for inflated wages is totally retarded when an economy is suffering a lack of genuine manufacturing which can be exported, in order to one day pay down the national debt.

Borrowing money from the Chinese and Saudis to make THE OBAMA BRIDGE and the CLINTON HIGHWAY and the BUSH WATERFALL is so ridiculously stupid.

Imagine you own a marketing company. Now you want to grow your company. Do you hire people to paint your garage and plant a flower garden, or do you hire people who can do kw research and build landers?

JOBS is meaningless. Production is what matters. And not phony GDP that is all government spending and debt. No one ever borrowed their way out of bankruptcy.

Sorry Matt, not attacking you personally, the JOBS thing drives me crazy. The masses are so stupid to believe everything the parasites tell them. Guys like Obama and Tim Geithner and Nancy Pelosi and Harry Reid and whichever shithead Republicans are in charge, they have never had real jobs. All they know is how to feed at the public trough and convince people they are not only necessary, but blameless.
 
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