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My Tea Party Starts at 3:00pm

J

James Arthur

Jan 1, 1970
0
MooseFET said:
If you redefine words. I feel free to do it too.

Deficit spending in a blueberry pie. Diluting the currency is toast
and tea.

tax (t²ks) n. 1. A contribution for the support of a government required
of persons, groups, or businesses within the domain of that government.
2. A fee or dues levied on the members of an organization to meet its
expenses. 3. *A burdensome or excessive demand; a strain.*

Back to the right definitions. Diluting the currency leads to
inflation because you end up with an increased money supply. Right
now the problem is that we have a sharply decreasing money
supply.

At bottom, Mr. Obama's message was that he was giving us free money.
He cited--as his proof--a "tax cut." In fact, he's borrowing and
spending far more, in our name, which we'll have to repay.

He hasn't cut taxes, only borrowed and spent even more; he's put off
paying them 'til later. More government-sponsored bubbles. It'll
fool his fans, but it's not honest.


James Arthur
 
R

Richard the Dreaded Libertarian

Jan 1, 1970
0
tax (t²ks) n. 1. A contribution for the support of a government required
of persons, groups, or businesses within the domain of that government.
2. A fee or dues levied on the members of an organization to meet its
expenses. 3. *A burdensome or excessive demand; a strain.*


At bottom, Mr. Obama's message was that he was giving us free money.
He cited--as his proof--a "tax cut." In fact, he's borrowing and
spending far more, in our name, which we'll have to repay.

He hasn't cut taxes, only borrowed and spent even more; he's put off
paying them 'til later. More government-sponsored bubbles. It'll
fool his fans, but it's not honest.

Welcome to Troy 2009:
http://www.grimmy.com/images/MGG_Archive/MGG_2009/MGG0428.gif

Cheers!
Rich
 
M

MooseFET

Jan 1, 1970
0
And the point is......

The point is that the extreme boom and bust cycle doesn't need to
happen. We could damp the system and have a smaller noise amplitude.
We would never be able to get rid of the noise but with clever
regulation we could prevent the system from having such a large gain
peak.
 
R

Rich Webb

Jan 1, 1970
0
The point is that the extreme boom and bust cycle doesn't need to
happen. We could damp the system and have a smaller noise amplitude.
We would never be able to get rid of the noise but with clever
regulation we could prevent the system from having such a large gain
peak.

Could, but counter-cyclical goes so much against human nature on the
upside. "Dow 36,000!" "Housing prices will only go up!" "These tulip
bulbs are amazing!" Every time there's a bubble, it's only the shrill
ones (see: Krugman, Paul) that play Cassandra; for the rest of the
pundit class, the song is "This time, it's different!"
 
M

MooseFET

Jan 1, 1970
0
Could, but counter-cyclical goes so much against human nature on the
upside. "Dow 36,000!" "Housing prices will only go up!" "These tulip
bulbs are amazing!" Every time there's a bubble, it's only the shrill
ones (see: Krugman, Paul) that play Cassandra; for the rest of the
pundit class, the song is "This time, it's different!"

Yes there is the problem that it needs not to rely on people acting.
Thinks like a sudden step in the income tax at $3 Million would be the
sort of thing needed. When a lot of people suddenly go above the $3
Million mark, it would cause the government to run a surplus and
reduce the money supply. We could also have a small tax on all stock
transactions. The bubbles are also marked by a large increase in the
volume of transactions. When things go in the other direction,
programs like unemployment insurance would add to the money supply.

The economy is very non-linear. The gain drops a great deal when the
economy slows down and increases during a boom. This is why there is
the tendency for it to stick at the bottom of the swing. whatever you
do needs to change the gain in the other direction.
 
J

James Arthur

Jan 1, 1970
0
MooseFET said:
.]
In the 1980s through today, the regulations were removed.
There was also a clamping effect from the way that the tax code
worked. When your income went up past what today would be about 3
million per year, you hit a sharp increase in taxes. This worked like
having an amplifier in the system where the gain decreased suddenly at
one point. This had the obvious effect on the unstable system.
And the point is......
The point is that the extreme boom and bust cycle doesn't need to
happen. We could damp the system and have a smaller noise amplitude.
We would never be able to get rid of the noise but with clever
regulation we could prevent the system from having such a large gain
peak.
Could, but counter-cyclical goes so much against human nature on the
upside. "Dow 36,000!" "Housing prices will only go up!" "These tulip
bulbs are amazing!" Every time there's a bubble, it's only the shrill
ones (see: Krugman, Paul) that play Cassandra; for the rest of the
pundit class, the song is "This time, it's different!"

Yes there is the problem that it needs not to rely on people acting.
Thinks like a sudden step in the income tax at $3 Million would be the
sort of thing needed. When a lot of people suddenly go above the $3
Million mark, it would cause the government to run a surplus and
reduce the money supply.

That would just cause people to earn less than $3M.

We could also have a small tax on all stock
transactions. The bubbles are also marked by a large increase in the
volume of transactions. When things go in the other direction,
programs like unemployment insurance would add to the money supply.

The economy is very non-linear. The gain drops a great deal when the
economy slows down and increases during a boom. This is why there is
the tendency for it to stick at the bottom of the swing. whatever you
do needs to change the gain in the other direction.

It's not all that complicated. The government made a bunch of
changes to get loans for non-creditworthy people. Don't do
that.

Don't be in the loan business, don't meddle with the incentives,
don't lend money to banks for nothing and let them leverage it
30:1. Don't.

Obama's said he doesn't want an economy based on excess borrowing,
yet his every move is to facilitate returning to it as quickly as
possible, and make whole those who should be paying the price.

It's ghastly.

James Arthur
 
M

MooseFET

Jan 1, 1970
0
MooseFET wrote: [....]
Thinks like a sudden step in the income tax at $3 Million would be the
sort of thing needed.  When a lot of people suddenly go above the $3
Million mark, it would cause the government to run a surplus and
reduce the money supply.

That would just cause people to earn less than $3M.

No if you look back to the Eisenhower era, you will see that adjusted
for inflation there was such a tax and people did make more than it
and they did pay the high tax.

It's not all that complicated.  The government made a bunch of
changes to get loans for non-creditworthy people.  Don't do
that.

This is not what caused even the bubble that you claim it did cause.
It most certainly isn't what caused the Clinton era bubble. Note that
the Clinton era one was less of a problem than the last one.
Don't be in the loan business, don't meddle with the incentives,
don't lend money to banks for nothing and let them leverage it
30:1.  Don't.

Failure to regulate is what allows the instabilities in the free
market to be at there worst. It ensures that we have crash after
crash and that the crashes will be of the worst sort.
Obama's said he doesn't want an economy based on excess borrowing,
yet his every move is to facilitate returning to it as quickly as
possible, and make whole those who should be paying the price.

Right now we have a decreasing money supply. Injecting money right
now is the right thing to do. When the economy is doing well is when
to sharply reduce spending etc. It is basic economics.
 
B

Bob Larter

Jan 1, 1970
0
Richard said:
You could solve all the country's problems overnight - just replace all
the hard-on pills with cyanide. >:->

Well, that'd screw the bankers pretty quickly. ;^)
 
B

Bob Larter

Jan 1, 1970
0
Rich said:
On Sun, 26 Apr 2009 09:55:39 -0700 (PDT), MooseFET [....]
In the 1980s through today, the regulations were removed.
There was also a clamping effect from the way that the tax code
worked. When your income went up past what today would be about 3
million per year, you hit a sharp increase in taxes. This worked like
having an amplifier in the system where the gain decreased suddenly at
one point. This had the obvious effect on the unstable system.
And the point is......
The point is that the extreme boom and bust cycle doesn't need to
happen. We could damp the system and have a smaller noise amplitude.
We would never be able to get rid of the noise but with clever
regulation we could prevent the system from having such a large gain
peak.

Could, but counter-cyclical goes so much against human nature on the
upside. "Dow 36,000!" "Housing prices will only go up!" "These tulip
bulbs are amazing!" Every time there's a bubble, it's only the shrill
ones (see: Krugman, Paul) that play Cassandra; for the rest of the
pundit class, the song is "This time, it's different!"

Good luck explaining that to the Libertarian types.
 
B

Bob Larter

Jan 1, 1970
0
Rich said:
On Sun, 26 Apr 2009 09:55:39 -0700 (PDT), MooseFET [....]
In the 1980s through today, the regulations were removed.
There was also a clamping effect from the way that the tax code
worked. When your income went up past what today would be about 3
million per year, you hit a sharp increase in taxes. This worked like
having an amplifier in the system where the gain decreased suddenly at
one point. This had the obvious effect on the unstable system.
And the point is......
The point is that the extreme boom and bust cycle doesn't need to
happen. We could damp the system and have a smaller noise amplitude.
We would never be able to get rid of the noise but with clever
regulation we could prevent the system from having such a large gain
peak.

Could, but counter-cyclical goes so much against human nature on the
upside. "Dow 36,000!" "Housing prices will only go up!" "These tulip
bulbs are amazing!" Every time there's a bubble, it's only the shrill
ones (see: Krugman, Paul) that play Cassandra; for the rest of the
pundit class, the song is "This time, it's different!"

Don't get me started. I turned a profit out of the dot.com boom, but
none of my colleagues did.
 
M

MooseFET

Jan 1, 1970
0
MooseFET wrote: [....]
Thinks like a sudden step in the income tax at $3 Million would be the
sort of thing needed.  When a lot of people suddenly go above the $3
Million mark, it would cause the government to run a surplus and
reduce the money supply.
That would just cause people to earn less than $3M.
No if you look back to the Eisenhower era, you will see that adjusted
for inflation there was such a tax and people did make more than it
and they did pay the high tax.
This is not what caused even the bubble that you claim it did cause.
It most certainly isn't what caused the Clinton era bubble.  Note that
the Clinton era one was less of a problem than the last one.
Failure to regulate is what allows the instabilities in the free
market to be at there worst.  It ensures that we have crash after
crash and that the crashes will be of the worst sort.
Right now we have a decreasing money supply.  Injecting money right
now is the right thing to do.  When the economy is doing well is when
to sharply reduce spending etc.  It is basic economics.

That is one economic "school of thought".

The others involve throwing cats over your shoulder after running
around the stump three times. Think of the economy as a complex servo
system with the money supply as one of the nodes in it. If you think
about it that way, it should be obvious that the government should
work against changes in the money supply, which ever direction they go
in.
 
B

Bob Larter

Jan 1, 1970
0
MooseFET said:
MooseFET wrote:
[....]
Thinks like a sudden step in the income tax at $3 Million would be the
sort of thing needed. When a lot of people suddenly go above the $3
Million mark, it would cause the government to run a surplus and
reduce the money supply.
That would just cause people to earn less than $3M.
No if you look back to the Eisenhower era, you will see that adjusted
for inflation there was such a tax and people did make more than it
and they did pay the high tax.
We could also have a small tax on all stock
transactions. The bubbles are also marked by a large increase in the
volume of transactions. When things go in the other direction,
programs like unemployment insurance would add to the money supply.
The economy is very non-linear. The gain drops a great deal when the
economy slows down and increases during a boom. This is why there is
the tendency for it to stick at the bottom of the swing. whatever you
do needs to change the gain in the other direction.
It's not all that complicated. The government made a bunch of
changes to get loans for non-creditworthy people. Don't do
that.
This is not what caused even the bubble that you claim it did cause.
It most certainly isn't what caused the Clinton era bubble. Note that
the Clinton era one was less of a problem than the last one.
Don't be in the loan business, don't meddle with the incentives,
don't lend money to banks for nothing and let them leverage it
30:1. Don't.
Failure to regulate is what allows the instabilities in the free
market to be at there worst. It ensures that we have crash after
crash and that the crashes will be of the worst sort.
Obama's said he doesn't want an economy based on excess borrowing,
yet his every move is to facilitate returning to it as quickly as
possible, and make whole those who should be paying the price.
Right now we have a decreasing money supply. Injecting money right
now is the right thing to do. When the economy is doing well is when
to sharply reduce spending etc. It is basic economics.
That is one economic "school of thought".

The others involve throwing cats over your shoulder after running
around the stump three times. Think of the economy as a complex servo
system with the money supply as one of the nodes in it. If you think
about it that way, it should be obvious that the government should
work against changes in the money supply, which ever direction they go
in.

Ayup. All this stuff makes a lot more sense if you think of it as a
nested control-loop servo-mechanism.
 
M

MooseFET

Jan 1, 1970
0
Rich said:
.]
 In the 1980s through today, the regulations were removed.
There was also a clamping effect from the way that the tax code
worked.  When your income went up past what today would be about3
million per year, you hit a sharp increase in taxes.  This worked like
having an amplifier in the system where the gain decreased suddenly at
one point.  This had the obvious effect on the unstable system.
And the point is......
The point is that the extreme boom and bust cycle doesn't need to
happen.  We could damp the system and have a smaller noise amplitude..
We would never be able to get rid of the noise but with clever
regulation we could prevent the system from having such a large gain
peak.
Could, but counter-cyclical goes so much against human nature on the
upside. "Dow 36,000!" "Housing prices will only go up!" "These tulip
bulbs are amazing!" Every time there's a bubble, it's only the shrill
ones (see: Krugman, Paul) that play Cassandra; for the rest of the
pundit class, the song is "This time, it's different!"

Good luck explaining that to the Libertarian types.

With some of them it is just "religion" and no amount of logic and
counter evidence will work but others are rational. The rational ones
can be convinced once they see the facts. The easiest ones to
convince are the ones who want to go back onto the gold standard.
Those haven't thought about what happens if someone who doesn't like
us finds a huge supply of gold. I used to use Russia as the example
(It is the real case). Today Iran may work better.

Once the person sees how a sudden increase in the amount of gold
effects things, they usually are willing to think of something other
than gold setting the money supply. You then need to suggest the case
that somehow the gold (or whatever) starts rapidly disappearing. You
can usually make them see how a rapid reduction in the money supply
can be bad too. At this point, a bit to talking about "if not gold
then what" will usually convince them that as bad as fiat money is,
all the other options are worse.

At this point, the person has agreed that a steady amount of money is
best and that fiat money is the least bad sort of money. If they have
come that far it isn't hard to get them to agree that government needs
to act to keep the supply nearly constant.
 
J

James Arthur

Jan 1, 1970
0
Bob said:
MooseFET wrote:

Ayup. All this stuff makes a lot more sense if you think of it as a
nested control-loop servo-mechanism.

Mortgage bubble: government was in-phase with the money supply.

HTH,
James Arthur
 
K

krw

Jan 1, 1970
0
MooseFET wrote:
[....]
Thinks like a sudden step in the income tax at $3 Million would be the
sort of thing needed.  When a lot of people suddenly go above the $3
Million mark, it would cause the government to run a surplus and
reduce the money supply.
That would just cause people to earn less than $3M.
No if you look back to the Eisenhower era, you will see that adjusted
for inflation there was such a tax and people did make more than it
and they did pay the high tax.
   We could also have a small tax on all stock
transactions.  The bubbles are also marked by a large increase in the
volume of transactions.  When things go in the other direction,
programs like unemployment insurance would add to the money supply.
The economy is very non-linear.  The gain drops a great deal when the
economy slows down and increases during a boom.  This is why there is
the tendency for it to stick at the bottom of the swing.  whatever you
do needs to change the gain in the other direction.
It's not all that complicated.  The government made a bunch of
changes to get loans for non-creditworthy people.  Don't do
that.
This is not what caused even the bubble that you claim it did cause.
It most certainly isn't what caused the Clinton era bubble.  Note that
the Clinton era one was less of a problem than the last one.
Don't be in the loan business, don't meddle with the incentives,
don't lend money to banks for nothing and let them leverage it
30:1.  Don't.
Failure to regulate is what allows the instabilities in the free
market to be at there worst.  It ensures that we have crash after
crash and that the crashes will be of the worst sort.
Obama's said he doesn't want an economy based on excess borrowing,
yet his every move is to facilitate returning to it as quickly as
possible, and make whole those who should be paying the price.
Right now we have a decreasing money supply.  Injecting money right
now is the right thing to do.  When the economy is doing well is when
to sharply reduce spending etc.  It is basic economics.

That is one economic "school of thought".

The others involve throwing cats over your shoulder after running
around the stump three times. Think of the economy as a complex servo
system with the money supply as one of the nodes in it. If you think
about it that way, it should be obvious that the government should
work against changes in the money supply, which ever direction they go
in.

So you think politicians are in the business of stabilizing the
economy? Do you think they should be making win/lose decisions? You
must be one happy weenie, because they are.
 
J

James Arthur

Jan 1, 1970
0
MooseFET said:
MooseFET wrote: [....]
Thinks like a sudden step in the income tax at $3 Million would be the
sort of thing needed. When a lot of people suddenly go above the $3
Million mark, it would cause the government to run a surplus and
reduce the money supply.
That would just cause people to earn less than $3M.

No if you look back to the Eisenhower era, you will see that adjusted
for inflation there was such a tax and people did make more than it
and they did pay the high tax.

It's not all that complicated. The government made a bunch of
changes to get loans for non-creditworthy people. Don't do
that.

This is not what caused even the bubble that you claim it did cause.
It most certainly isn't what caused the Clinton era bubble. Note that
the Clinton era one was less of a problem than the last one.
Don't be in the loan business, don't meddle with the incentives,
don't lend money to banks for nothing and let them leverage it
30:1. Don't.

Failure to regulate is what allows the instabilities in the free
market to be at there worst. It ensures that we have crash after
crash and that the crashes will be of the worst sort.
Obama's said he doesn't want an economy based on excess borrowing,
yet his every move is to facilitate returning to it as quickly as
possible, and make whole those who should be paying the price.

Right now we have a decreasing money supply. Injecting money right
now is the right thing to do. When the economy is doing well is when
to sharply reduce spending etc. It is basic economics.


I'm really at a loss to respond to all these platitudes, naked
assertions and assumptions.

Feel free to lay out exactly what you think caused the bubble,
where the money went, in your view, and the numbers that make
it work.

Rather than speaking in abstractions like "injecting" and "money
supply", and it's-the-right-thing-to-do bromides, kindly explain
the mechanism whereby

a) massively paying some people to
b) temporarily (we hope)
c) do things we don't need, makes things
d) better for them once the program ends,

and why

e) that doesn't hurt, weigh on, slow down or discourage the remaining,
productive people who are forced to pay for that, the cost of
government waste and administration, plus interest.

Obama's phrase, "stimulating the economy," is not an explanation--the
economy's an idea, not a thing. If it had a heart attack there'd
be no place to connect your defib-u-lator[1] paddles.

[1] Obama's pronunciation, House-on-a-rock speech.


Cheers,
James Arthur
 
M

MooseFET

Jan 1, 1970
0
[....]
Thinks like a sudden step in the income tax at $3 Million would be the
sort of thing needed.  When a lot of people suddenly go above the $3
Million mark, it would cause the government to run a surplus and
reduce the money supply.
That would just cause people to earn less than $3M.
No if you look back to the Eisenhower era, you will see that adjusted
for inflation there was such a tax and people did make more than it
and they did pay the high tax.
   We could also have a small tax on all stock
transactions.  The bubbles are also marked by a large increase in the
volume of transactions.  When things go in the other direction,
programs like unemployment insurance would add to the money supply.
The economy is very non-linear.  The gain drops a great deal when the
economy slows down and increases during a boom.  This is why there is
the tendency for it to stick at the bottom of the swing.  whatever you
do needs to change the gain in the other direction.
It's not all that complicated.  The government made a bunch of
changes to get loans for non-creditworthy people.  Don't do
that.
This is not what caused even the bubble that you claim it did cause.
It most certainly isn't what caused the Clinton era bubble.  Note that
the Clinton era one was less of a problem than the last one.
Don't be in the loan business, don't meddle with the incentives,
don't lend money to banks for nothing and let them leverage it
30:1.  Don't.
Failure to regulate is what allows the instabilities in the free
market to be at there worst.  It ensures that we have crash after
crash and that the crashes will be of the worst sort.
Obama's said he doesn't want an economy based on excess borrowing,
yet his every move is to facilitate returning to it as quickly as
possible, and make whole those who should be paying the price.
Right now we have a decreasing money supply.  Injecting money right
now is the right thing to do.  When the economy is doing well is when
to sharply reduce spending etc.  It is basic economics.
That is one economic "school of thought".
The others involve throwing cats over your shoulder after running
around the stump three times.  Think of the economy as a complex servo
system with the money supply as one of the nodes in it.  If you think
about it that way, it should be obvious that the government should
work against changes in the money supply, which ever direction they go
in.

So you think politicians are in the business of stabilizing the
economy?

I think that a well regulated currency and working for the general
welfare are the jobs of government. I seem to remember that some
others a while back thought the same and thought it important enough
to put it down on paper.

 Do you think they should be making win/lose decisions?
No I don't think they should be making win/lose decisions. They set
the rules of the game. You can't have much of a game without rules.
 
M

MooseFET

Jan 1, 1970
0
Ayup. All this stuff makes a lot more sense if you think of it as a
nested control-loop servo-mechanism.

That may be only true for those of us who know a lot about control
loops. I doubt it would help a football player or a lawyer very much.

Even the way that we think about "noise" is different than folk in
other fields.

The professors I learned economics from used very different terms for
the same concepts as the engineering ones. They didn't even use the
term "partial derivative" for things that were clearly exactly that.
 
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