aviationaware
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Basic Understanding of some Economic Principles

Sat Jun 15, 2019 9:46 am

This thread is valuable for anyone really, but particularly directed at certain Dutch and German members of our forum who are living in economic lalaland and are in dire need of some basic understanding of economic principles.

I have searched for quite a while and have finally come across a great video on the internet:

https://www.youtube.com/watch?v=PHe0bXAIuk0

In this video, it is very plainly and graphically explained why...
- boom-bust cycles are created by central banks
- those boom-bust cycles can not over the long term outperform productivity growth (making central banks rather pointless in essence)
- our current low interest rates are a big problem
- social tensions result from central banking boom-cust cycles.

In summary, the video (unintentionally I am sure considering who had it produced) makes a very good argument for abolishing the Fed.

Watch and learn.
Last edited by SQ22 on Sat Jun 15, 2019 4:36 pm, edited 2 times in total.
Reason: Title was misleading
 
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Aesma
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Re: Educating Airliners.net

Sat Jun 15, 2019 10:00 am

Out of 100 years of Fed control, the country has had 22 recessional years, including one depression. The 100 years before the Fed saw 44 recessions and six depressions.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
aviationaware
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Re: Educating Airliners.net

Sat Jun 15, 2019 11:38 am

Aesma wrote:
Out of 100 years of Fed control, the country has had 22 recessional years, including one depression. The 100 years before the Fed saw 44 recessions and six depressions.


You do realize that there was central banking in the US before the Federal Reserve Act of 1913, yea?
 
Olddog
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Re: Educating Airliners.net

Sat Jun 15, 2019 12:00 pm

You do realize that what you are trying to do is not education but propaganda for the new trump administration thesis ?

What are the chances that it works on an international forum ???
 
aviationaware
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Re: Educating Airliners.net

Sat Jun 15, 2019 12:11 pm

Olddog wrote:
You do realize that what you are trying to do is not education but propaganda for the new trump administration thesis ?

What are the chances that it works on an international forum ???


Since when is anyone in the Trump administration advocating for abolishing the Federal Reserve?
 
Spar
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Re: Educating Airliners.net

Sat Jun 15, 2019 12:26 pm

It is hard for me to find the proper words to express my disdain for someone who would have the myopic arrogance to post a YouTube video on the premise of providing an education on economics. If you can't express yourself in writing what are you doing in an internet forum?
 
aviationaware
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Re: Educating Airliners.net

Sat Jun 15, 2019 12:33 pm

Spar wrote:
It is hard for me to find the proper words to express my disdain for someone who would have the myopic arrogance to post a YouTube video on the premise of providing an education on economics. If you can't express yourself in writing what are you doing in an internet forum?


You're quite the charmer. I have stated all that plenty of times, but it was always discounted because I did not "prove" it. Now here's your proof. Even a grade schooler can understand it based on that video. It's just common sense.
 
afcjets
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Re: Educating Airliners.net

Sat Jun 15, 2019 12:42 pm

aviationaware wrote:
Olddog wrote:
You do realize that what you are trying to do is not education but propaganda for the new trump administration thesis ?

What are the chances that it works on an international forum ???


Since when is anyone in the Trump administration advocating for abolishing the Federal Reserve?


More importantly, why would he post a video disguised as a campaign video for Trump especially for Germans and the Netherlands?
 
oschkosch
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Re: Educating Airliners.net

Sat Jun 15, 2019 1:43 pm

Why the hate speech against Germans and Dutch members?

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SQ22
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Re: Understanding basic economic principles

Sat Jun 15, 2019 4:36 pm

I have changed the title, otherwise there would have been the risk of deletion or getting it moved to Site Related topics by mistake.

I am not saying this is the perfect title, but there is no risk of a misunderstanding.

Please no reply to this post, but use the reporting function instead.
 
GalaxyFlyer
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Re: Basic Understanding of some Economic Principles

Sat Jun 15, 2019 4:55 pm

A much better one...

https://mru.org/

GF
 
blueflyer
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Re: Basic Understanding of some Economic Principles

Sat Jun 15, 2019 5:36 pm

How much research really went into the OP... A video featuring Ray Dalio, founder of Bridgewater Associates, a hedge fund with a macro strategy focused on profiting from inflation, opposing central banks, that usually try and prevent or control inflation.

If that's the best there is...
 
anrec80
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Re: Educating Airliners.net

Sat Jun 15, 2019 7:49 pm

afcjets wrote:
More importantly, why would he post a video disguised as a campaign video for Trump especially for Germans and the Netherlands?


Where do you, people, see in a simple macroeconomics lecture some Trump propaganda or hate speech? The name of Trump isn’t anywhere close there.

That said however, I agree with the point the author tried to make (they are also made in the video). Main point of the video is that the productivity growth is the key to building a successful economy - while our German and Dutch friends (as well as liberal ones) prefer socialistic “take away and split” approach, as opposed to rewarding productivity increases (such self-improvement, education, etc.). Video just explains why this does not work.
 
alfa164
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Re: Educating Airliners.net

Sat Jun 15, 2019 8:02 pm

Spar wrote:
It is hard for me to find the proper words to express my disdain for someone who would have the myopic arrogance to post a YouTube video on the premise of providing an education on economics. If you can't express yourself in writing what are you doing in an internet forum?


:checkmark: Some people just spend all their time in front of the screen watching half-thought-out arguments and repeating them as if they were facts. To repeat what I saw in some peoples favorite book of ancient tales, in Proverbs 18:2:

"A fool takes no pleasure in understanding, but only in expressing his opinion."

;)
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Tugger
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Re: Basic Understanding of some Economic Principles

Sat Jun 15, 2019 9:40 pm

Many people are followers and find it difficult to express an opinion or defend a position. It is how political parties often get their power (all parties) people want something to follow and belong too.

I am can identify one party I belong to however in no way does that mean I follow or parrot all the party's ideals/goal or that those that belong to the same party can speak for me.

Same goes for general positions or beliefs. I can argue most that I hold and reason why without pointing to something or a website etc (I will do that to back up my thinking). I don't need someone else to speak for me (in general).

I will always support a Fed/Central bank that is separate from and independent of the government. Money is a weapon and it is never good for it to be used as such, it is always more powerful when independent. This is the same reason I will always support (and insist on for as long as my vote matters) physical currency to be usable and available to conduct most all business. The moment an "underground economy" etc. can no longer function is the moment we lose freedom.

Tugg
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seb146
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Re: Educating Airliners.net

Sat Jun 15, 2019 9:55 pm

anrec80 wrote:
afcjets wrote:
More importantly, why would he post a video disguised as a campaign video for Trump especially for Germans and the Netherlands?


Where do you, people, see in a simple macroeconomics lecture some Trump propaganda or hate speech? The name of Trump isn’t anywhere close there.

That said however, I agree with the point the author tried to make (they are also made in the video). Main point of the video is that the productivity growth is the key to building a successful economy - while our German and Dutch friends (as well as liberal ones) prefer socialistic “take away and split” approach, as opposed to rewarding productivity increases (such self-improvement, education, etc.). Video just explains why this does not work.


When people and corporations can borrow large sums of money at low or zero interest, that is great for them to buy more things like property and jack up prices to we consumers. This benefits the very wealthy and those who pretend they are very wealthy. Like the current occupant of the White House.

I can guarantee you Germans and Dutch know about American macroeconomics more than the average American voter.....
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aviationaware
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Re: Educating Airliners.net

Sun Jun 16, 2019 1:37 am

seb146 wrote:
When people and corporations can borrow large sums of money at low or zero interest, that is great for them to buy more things like property and jack up prices to we consumers. This benefits the very wealthy and those who pretend they are very wealthy. Like the current occupant of the White House.

I can guarantee you Germans and Dutch know about American macroeconomics more than the average American voter.....


You either didn't watch the video or didn't understand it, which makes me pretty sad considering you were one of the primary addressees.
 
anrec80
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Re: Educating Airliners.net

Sun Jun 16, 2019 1:43 am

seb146 wrote:
When people and corporations can borrow large sums of money at low or zero interest, that is great for them to buy more things like property and jack up prices to we consumers. This benefits the very wealthy and those who pretend they are very wealthy. Like the current occupant of the White House.


One trait the rich have - they know how to count money, what’s worth borrowing for, and what’s not worth borrowing for and spending for. This is how and why they are rich. If something does not make sense to buy - neither corporations nor rich will buy it, be it with their or with borrowed money.

seb146 wrote:
I can guarantee you Germans and Dutch know about American macroeconomics more than the average American voter.....


Given sluggish economic growth, and the fact that it took them about a decade to recover from 2008 crisis - I am not sure they fully understand everything. They are still wearing their pink glasses and continuing on with their “income equality”, “social fairness” ideas, and just making everyone happy. And I do not know what it will take them to start reviewing their policies to return to sustainability. Just look at their debt burdens.

In the USA there are the same trends, but the U.S. emits the global currency and is richer overall, so this has less impact (but does not still make it the right things).
 
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Dutchy
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 8:47 am

aviationaware wrote:
In summary, the video (unintentionally I am sure considering who had it produced) makes a very good argument for abolishing the Fed.


Did you take that from the video? Interesting how your mind works. Your ideology clouds your judgement, that's all you have proven from this.
Many happy landings, greetings from The Netherlands!
 
aviationaware
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 9:49 am

Dutchy wrote:
aviationaware wrote:
In summary, the video (unintentionally I am sure considering who had it produced) makes a very good argument for abolishing the Fed.


Did you take that from the video? Interesting how your mind works. Your ideology clouds your judgement, that's all you have proven from this.


Okay big boy, make an argument for the Fed. I'm eagerly listening.
 
petertenthije
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Re: Educating Airliners.net

Sun Jun 16, 2019 9:54 am

anrec80 wrote:
Given sluggish economic growth, and the fact that it took them about a decade to recover from 2008 crisis - I am not sure they fully understand everything.
Meanwhile, the EC and IMF have advised the Netherlands and Germany to drop the budget surplus (NL: 1,5% of GDP, DE: 3% of GDP). So we are actually paying of our debts. Luxury problems.

Yeah, it’s in Dutch, Google translate is your friend. Don’t worry, the Telegraaf is a right leaning newspaper, so you won’t risk your altright membership card. :)
https://www.telegraaf.nl/financieel/131 ... itensporig
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Dutchy
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 10:00 am

aviationaware wrote:
Dutchy wrote:
aviationaware wrote:
In summary, the video (unintentionally I am sure considering who had it produced) makes a very good argument for abolishing the Fed.


Did you take that from the video? Interesting how your mind works. Your ideology clouds your judgement, that's all you have proven from this.


Okay big boy, make an argument for the Fed. I'm eagerly listening.


If your argument is to get rid of the cycles, then you are arguing against banks creating money from debt, not against the FED. And I kind of agree to that, money (debt) pouring into existing assets doesn't help the economy forward, nothing has been created.

And you can leave your passive aggressive attitude at the door.
Many happy landings, greetings from The Netherlands!
 
aviationaware
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 10:11 am

Dutchy wrote:
aviationaware wrote:
Dutchy wrote:

Did you take that from the video? Interesting how your mind works. Your ideology clouds your judgement, that's all you have proven from this.


Okay big boy, make an argument for the Fed. I'm eagerly listening.


If your argument is to get rid of the cycles, then you are arguing against banks creating money from debt, not against the FED. And I kind of agree to that, money (debt) pouring into existing assets doesn't help the economy forward, nothing has been created.

And you can leave your passive aggressive attitude at the door.


Now you're not even coherent anymore. First you complain about me linking a hedge funders argument to an anti-central banking theme and then you turn out to be opposed to central banking yourself? After in another thread you just praised low interest? You don't make any sense.
 
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Dutchy
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 10:13 am

aviationaware wrote:
Dutchy wrote:
aviationaware wrote:

Okay big boy, make an argument for the Fed. I'm eagerly listening.


If your argument is to get rid of the cycles, then you are arguing against banks creating money from debt, not against the FED. And I kind of agree to that, money (debt) pouring into existing assets doesn't help the economy forward, nothing has been created.

And you can leave your passive aggressive attitude at the door.


Now you're not even coherent anymore. First you complain about me linking a hedge funders argument to an anti-central banking theme and then you turn out to be opposed to central banking yourself? After in another thread you just praised low interest? You don't make any sense.


Read more careful what I write.
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aviationaware
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 10:33 am

Dutchy wrote:
Read more careful what I write.


Explain better what you mean.
 
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Dutchy
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 11:02 am

aviationaware wrote:
Dutchy wrote:
Read more careful what I write.


Explain better what you mean.


It is obvious that you and I believe in totally different things, let's leave it with that.
Many happy landings, greetings from The Netherlands!
 
aviationaware
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 11:49 am

Dutchy wrote:
It is obvious that you and I believe in totally different things, let's leave it with that.


Well the difference is, what I believe is backed by facts that become rather self evident once you have a grasp of the underlying first principles behind it. So what you believe is just wrong. I'd really like to be able to make you see the light here, man.
 
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Aesma
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Re: Educating Airliners.net

Sun Jun 16, 2019 1:09 pm

anrec80 wrote:
Given sluggish economic growth, and the fact that it took them about a decade to recover from 2008 crisis - I am not sure they fully understand everything. They are still wearing their pink glasses and continuing on with their “income equality”, “social fairness” ideas, and just making everyone happy. And I do not know what it will take them to start reviewing their policies to return to sustainability. Just look at their debt burdens.


What's the point of a country being rich if people are unhappy because a lot of them are poor, losing their homes, without health insurance, etc. ?
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
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Dutchy
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 1:12 pm

aviationaware wrote:
Dutchy wrote:
It is obvious that you and I believe in totally different things, let's leave it with that.


Well the difference is, what I believe is backed by facts that become rather self evident once you have a grasp of the underlying first principles behind it. So what you believe is just wrong. I'd really like to be able to make you see the light here, man.


Sure, whatever man. And I would like to pull away the wool from your eyes, it seems so easy, just take it away and you will say, ohhhh yes of course. Alais I don't believe I can ever convince you whatever is the better society for the average Joe.
Many happy landings, greetings from The Netherlands!
 
VSMUT
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 2:52 pm

Dutchy wrote:
aviationaware wrote:
Dutchy wrote:
It is obvious that you and I believe in totally different things, let's leave it with that.


Well the difference is, what I believe is backed by facts that become rather self evident once you have a grasp of the underlying first principles behind it. So what you believe is just wrong. I'd really like to be able to make you see the light here, man.


Sure, whatever man. And I would like to pull away the wool from your eyes, it seems so easy, just take it away and you will say, ohhhh yes of course. Alais I don't believe I can ever convince you whatever is the better society for the average Joe.


I don't think he realises that economics, at least at a basic level, is taught at school in most European countries.
 
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Aaron747
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 3:14 pm

VSMUT wrote:
Dutchy wrote:
aviationaware wrote:

Well the difference is, what I believe is backed by facts that become rather self evident once you have a grasp of the underlying first principles behind it. So what you believe is just wrong. I'd really like to be able to make you see the light here, man.


Sure, whatever man. And I would like to pull away the wool from your eyes, it seems so easy, just take it away and you will say, ohhhh yes of course. Alais I don't believe I can ever convince you whatever is the better society for the average Joe.


I don't think he realises that economics, at least at a basic level, is taught at school in most European countries.


Well that's fun, because it's merely an elective in many public high schools in the US.
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seb146
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 4:29 pm

aviationaware wrote:
Dutchy wrote:
It is obvious that you and I believe in totally different things, let's leave it with that.


Well the difference is, what I believe is backed by facts that become rather self evident once you have a grasp of the underlying first principles behind it. So what you believe is just wrong. I'd really like to be able to make you see the light here, man.


A few very wealthy elites do not create jobs. Oh, sure they have the money to build factories but it actually takes consumer demand to build those factories. How do we get consumer demand? By giving money to the most people possible. Maybe that is in the form of higher wages. Maybe that is in the form of lower tax burden. Maybe that is in the form of lowering the cost of health care.

If 1,000,000 low income people have an extra $200 a month each, they will spend it driving consumer demand. If 1,000 wealthy people have an extra $100,000 a month each, they will put it in the bank driving nothing.
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GalaxyFlyer
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 4:50 pm

You need an economics course. What do you think, the bank pats interest paid to those wealthy people out of thin air? No, they lend to entrepreneurs, inventors, farmers, small business who are willing to pay interest on bank-issued debt meet consumer demand. See Jean-Baptist’s Say’s Law, which greatly predates any of your soon-to-be posted favorite enemies, supply side era. Supply creates demand. In the Soviet Union, there wasn’t a lack of demand, there was a lack of production.
 
anrec80
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Re: Educating Airliners.net

Sun Jun 16, 2019 5:32 pm

Aesma wrote:
What's the point of a country being rich if people are unhappy because a lot of them are poor, losing their homes, without health insurance, etc. ?


Well - those poor need to improve themselves, be more willing to move for the job, downsize if they can no longer afford their home. I understand that this is not easy for many, but you can’t tax through the the hardest working ones to support unsustainable behavior of many. There have to be incentives for citizens to become more productive individuals, so that they can contribute to the society more.

But - it’s easier to vote than to work.
Last edited by anrec80 on Sun Jun 16, 2019 5:34 pm, edited 1 time in total.
 
petertenthije
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 5:34 pm

GalaxyFlyer wrote:
You need an economics course. What do you think, the bank pats interest paid to those wealthy people out of thin air? No, they lend to entrepreneurs, inventors, farmers, small business who are willing to pay interest on bank-issued debt meet consumer demand. See Jean-Baptist’s Say’s Law, which greatly predates any of your soon-to-be posted favorite enemies, supply side era. Supply creates demand. In the Soviet Union, there wasn’t a lack of demand, there was a lack of production.

What good is supply, if a large amount of people have little disposable income once the bare necessities (food, transport, housing) are paid.

Better to spread the money to the people that will put it directly into the economy, instead of indirectly through banking or investments.

To get back to Seb's example of giving 200$ each to 1.000.000 people or 100.000$ to 1.000 people.

The 1.000 x 100.000$ will be invested where the greatest return of investment can be found. A large amount of money may therefor go towards investments outside the USA. Assuming everything goes to plan the investor will make money long term, but in the short term a good chunk of the money goes overseas without directly benefitting the local economy.

Contrast that with 1.000.000 x 200$. A good chunk of that money will likely be used to pay of debts... thus going back to the banks thus making more money available for investments. Thus still benefitting the entrepeneurs. The money not spend on paying of debts will be spend on consumer goods and luxury items. Since a large amount of people are unlikely to go abroad if you give them a 200$ "windfall", most of that money gets spend locally directly benefitting the US economy. Also, that money will benefit US entrepeneurs running the shops, car dealerships, bars, hotels etc.

Either way the money is divided, it gets back to the entrepeneurs for them to invest and create jobs. But by dividing the money across a larger amount of people it becomes more worthwhile to invest locally.

Of course there is a third option everyone seems to forget about. Do not give the money back to the people, but use it to pay of federal- and/or state debt. In the long term this would diminish the need for taxes because the government does not have to pay as much in interest. And this way the money would STILL be going to the banks so entrepeneurs have access to money for investments.
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Dutchy
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 5:50 pm

VSMUT wrote:
Dutchy wrote:
aviationaware wrote:

Well the difference is, what I believe is backed by facts that become rather self evident once you have a grasp of the underlying first principles behind it. So what you believe is just wrong. I'd really like to be able to make you see the light here, man.


Sure, whatever man. And I would like to pull away the wool from your eyes, it seems so easy, just take it away and you will say, ohhhh yes of course. Alais I don't believe I can ever convince you whatever is the better society for the average Joe.


I don't think he realises that economics, at least at a basic level, is taught at school in most European countries.


True, basic level knowledge should be taught at high school. In my case, due to education, interest, and profession, I have a little bit of more knowledge than the average joe. Aviationaware is an ideologist and I do not feel like debating with him and coming to the inevitable conclusion that he and I have a different vision on society at large.
Many happy landings, greetings from The Netherlands!
 
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Dutchy
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 5:54 pm

GalaxyFlyer wrote:
You need an economics course. What do you think, the bank pats interest paid to those wealthy people out of thin air? No, they lend to entrepreneurs, inventors, farmers, small business who are willing to pay interest on bank-issued debt meet consumer demand. See Jean-Baptist’s Say’s Law, which greatly predates any of your soon-to-be posted favorite enemies, supply side era. Supply creates demand. In the Soviet Union, there wasn’t a lack of demand, there was a lack of production.


You need an economics history course if you still believe triple down economics works............

What has the Soviet Union got to do with anything, nobody here proposes such a system. Or perhaps Anrec80 might, he is in love with anything Russia does, including its history.
Many happy landings, greetings from The Netherlands!
 
GalaxyFlyer
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 7:49 pm

Well, I never got a job from poor man, so somehow a rich man made money to hire me to work for him. Say’s Law is classic microeconomic theory that’s stood for 200 years. Don’t know about triple down economics, but I do know I worked to produce so I could consume; not sure how we would consume without production, but Lefties seem to like subsidizing sloth. How do you propose getting the money to spread around?

Those who rob Peter to pay Paul will always have Paul’s vote.

GF
Last edited by GalaxyFlyer on Sun Jun 16, 2019 7:53 pm, edited 1 time in total.
 
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Dutchy
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 7:52 pm

GalaxyFlyer wrote:
Well, I never got a job from poor man. Say’s Law is classic microeconomic theory that’s stood for 200 years. Don’t know about triple down economics, but I do know I worked to produce so I could consume; not sure how we would consume without production, but Lefties seem to like subsidizing sloth.

GF


You have a strange world view, or a deep hatred everything with view left of yours.
Many happy landings, greetings from The Netherlands!
 
GalaxyFlyer
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 7:54 pm

Dutchy wrote:
GalaxyFlyer wrote:
Well, I never got a job from poor man. Say’s Law is classic microeconomic theory that’s stood for 200 years. Don’t know about triple down economics, but I do know I worked to produce so I could consume; not sure how we would consume without production, but Lefties seem to like subsidizing sloth.

GF


You have a strange world view, or a deep hatred everything with view left of yours.


Why so strange? It’s pretty common sense, one works, produces, consumes. Try interfering with that cycle and no good happens.

GF
 
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Dutchy
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Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 8:10 pm

GalaxyFlyer wrote:
Well, I never got a job from poor man, so somehow a rich man made money to hire me to work for him. Say’s Law is classic microeconomic theory that’s stood for 200 years. Don’t know about triple down economics, but I do know I worked to produce so I could consume; not sure how we would consume without production, but Lefties seem to like subsidizing sloth. How do you propose getting the money to spread around?

Those who rob Peter to pay Paul will always have Paul’s vote.

GF


Ok, looked into Say's law:

Say's law still lives on in modern neoclassical economic models which assume that all markets clear.


Source

Do you believe in the perfect market theory?
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MSPNWA
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Joined: Thu Apr 23, 2009 2:48 am

Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 8:41 pm

seb146 wrote:
If 1,000 wealthy people have an extra $100,000 a month each, they will put it in the bank driving nothing.


Do you actually believe this?
 
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Dutchy
Posts: 9084
Joined: Sat Nov 03, 2007 1:25 am

Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 8:50 pm

MSPNWA wrote:
seb146 wrote:
If 1,000 wealthy people have an extra $100,000 a month each, they will put it in the bank driving nothing.


Do you actually believe this?


To put it differently, a wealthy person might buy another Porsche, or might go abroad, but will hardly buy anything domestic, let alone local. So if you let poor or middle-class people have 100USD extra per month, they most likely spend it all in the local economy. That's why trickle-down economics doesn't work.
Many happy landings, greetings from The Netherlands!
 
Spar
Posts: 295
Joined: Mon Apr 01, 2019 7:37 pm

Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 9:04 pm

These lectures on "economics" from right wingers are so asinine because they ignore the fact that while all their darlings for the last fifty years have preached these kinds of dogma, in practice they have engaged in blatant deficit spending to boost the economy and make their friends rich during their terms of office (Nixon, Reagan, Bush, Trump). Thus, when the Dems gain office they receive an inflationary economy or an economy gone bust and they must nurse he economy back to health (Carter, Clinton, Obama) and they do so while having their economic policies torpedoed as much as possible by the ubber rich (especially under Carter).

All the while we have to listen to the rightwingers, especially the libertarians, grade school level lectures on the "economy" as if they are trying to bring us a message from God.
 
anrec80
Posts: 1798
Joined: Mon Jan 10, 2011 7:50 am

Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 9:06 pm

Dutchy wrote:
GalaxyFlyer wrote:
Well, I never got a job from poor man. Say’s Law is classic microeconomic theory that’s stood for 200 years. Don’t know about triple down economics, but I do know I worked to produce so I could consume; not sure how we would consume without production, but Lefties seem to like subsidizing sloth.

GF


You have a strange world view, or a deep hatred everything with view left of yours.


What's wrong with this statement? Yes, poor people do not create jobs, hire people, pay for stuff (they want it given to them). Hence the society needs to create potential for everyone to improve themselves and have potential to become at least middle class or even rich, as opposed to handing stuff out. This is the increase in productivity the video is about. In Europe (as in most places in the West) - as soon as I increase my productivity to certain level and am able to earn more, most of it will be taxed away.

So why bother - work 16 hour days to develop the earning potential just to see all the rewards vanish in tax deductions? Why not just lay on the couch or the beach, get fat and lazy, and do nothing? Society will take care of everything, including my increased load on healthcare due to weight issue and junky food - right?
 
GalaxyFlyer
Posts: 3117
Joined: Fri Jan 01, 2016 4:44 am

Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 9:25 pm

Dutchy wrote:
GalaxyFlyer wrote:
Well, I never got a job from poor man, so somehow a rich man made money to hire me to work for him. Say’s Law is classic microeconomic theory that’s stood for 200 years. Don’t know about triple down economics, but I do know I worked to produce so I could consume; not sure how we would consume without production, but Lefties seem to like subsidizing sloth. How do you propose getting the money to spread around?

Those who rob Peter to pay Paul will always have Paul’s vote.

GF


Ok, looked into Say's law:

Say's law still lives on in modern neoclassical economic models which assume that all markets clear.


Source

Do you believe in the perfect market theory?


Don’t know about “perfect market theory” as it’s assumes a model of behavior, but I do believe markets “clear” which is a simple case of where the supply and demand curves intersect. Trying to avoid the implications of that fact leads us to lunacies like New York State’s new rent control law.

GF
 
anrec80
Posts: 1798
Joined: Mon Jan 10, 2011 7:50 am

Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 9:28 pm

Dutchy wrote:
To put it differently, a wealthy person might buy another Porsche, or might go abroad, but will hardly buy anything domestic, let alone local. So if you let poor or middle-class people have 100USD extra per month, they most likely spend it all in the local economy. That's why trickle-down economics doesn't work.


I'll put it differently. In a left-leaning more socialistic society, there is too little incentive for people to become more productive and wealthy. Hence many of those who would work harder, design new things and become wealthier stop at middle class. As the result - economy and society as a whole are less productive and less competitive. True, there maybe so much trickle-down here, but your "take away and split" approach doesn't work either. People who have some money to be taken away will be doing whatever they can to save it, and this is natural. This is their earnings, and they want to protect them. Hence we have stuff like corporate loopholes, offshore accounts, and the likes.

Speaking of where the wealthy person will spend their money - in a competitive economy there are plenty of great domestic offerings. With enough rewards for creativity, someone will create a local Porsche, and compete for local and foreign wealthy clientele.
 
anrec80
Posts: 1798
Joined: Mon Jan 10, 2011 7:50 am

Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 9:32 pm

Dutchy wrote:
What has the Soviet Union got to do with anything, nobody here proposes such a system. Or perhaps Anrec80 might, he is in love with anything Russia does, including its history.


Don't tell me that the EU hasn't take anything away from Soviet Union. It has, and more than you think. Your agricultural quotas say a lot - who can produce how much in which country. "Free trade agreements" with Eastern European countries like Ukraine, Georgia or Moldova are pretty much about quotas and other export restrictions from those countries to the EU - free trade there is only one way - to the East. If this is not a plan economy - then what it is?

I am certainly not a fan of 100% plan economy, but - just as anything else in this life - there are scenarios where some of its principles are applicable.
 
anrec80
Posts: 1798
Joined: Mon Jan 10, 2011 7:50 am

Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 9:43 pm

GalaxyFlyer wrote:
Don’t know about “perfect market theory” as it’s assumes a model of behavior, but I do believe markets “clear” which is a simple case of where the supply and demand curves intersect. Trying to avoid the implications of that fact leads us to lunacies like New York State’s new rent control law.

GF


Please, let's not move this thread into all these rent control lunacies. Too sad of a topic. Our crazy liberals who finally got into the state assembly want to make it truly large-scale.
 
aviationaware
Topic Author
Posts: 2812
Joined: Mon May 19, 2014 12:02 pm

Re: Basic Understanding of some Economic Principles

Sun Jun 16, 2019 9:51 pm

seb146 wrote:

If 1,000,000 low income people have an extra $200 a month each, they will spend it driving consumer demand. If 1,000 wealthy people have an extra $100,000 a month each, they will put it in the bank driving nothing.


Congratulations - you just proved in a breathtaking manner that you understand nothing about how money works. Money never just "sits in the bank doing nothing".

petertenthije wrote:
Contrast that with 1.000.000 x 200$. A good chunk of that money will likely be used to pay of debts... thus going back to the banks thus making more money available for investments. Thus still benefitting the entrepeneurs. The money not spend on paying of debts will be spend on consumer goods and luxury items. Since a large amount of people are unlikely to go abroad if you give them a 200$ "windfall", most of that money gets spend locally directly benefitting the US economy. Also, that money will benefit US entrepeneurs running the shops, car dealerships, bars, hotels etc.


You seem to suffer under the delusion that there is a finite amount of money. That's wrong. Banks have no hard cap on how much money they can create from credit. Their only cap is the demand for more credit. So anyone paying back credit will not increase the amount available for others.
Also, of course some of the money in the well heeled people's pockets will be invested overseas. But don't think even for a second that money spent by consumers benefits the US economy in full. The might buy a TV, and most of that is not produced in the US. And that's just one example.

Dutchy wrote:
Aviationaware is an ideologist and I do not feel like debating with him and coming to the inevitable conclusion that he and I have a different vision on society at large.


What I believe is the better way to run a society has very little bearing on whether or not you realize that fiat money is bad. Even in a hard money economy, you can still decide to tax the wealthy. The only thing you can't do is shaft future generations for your lack of spending discipline, which I would say is a rather social thing to do, don't you?

Dutchy wrote:

Do you believe in the perfect market theory?


Anyone who doesn't is hopeless. Market laws are laws of nature. They will always prevail over state interventions and when they do, it all comes crashing down. That has been shown to be true time and time again in history.

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