Investing in precious metals 101

Why Government Spending Does Not Stimulate Economic Growth

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  • Thu, Jan 14, 2010 - 01:32pm

    #11
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    Re: Why Government Spending Does Not Stimulate Economic …

[quote=guardia]

Yeah, ok, sorry about that… A better way of saying this would be: “if we could educate all those workers” and “instead make them understand the important of developing”

Sounds better? :)[/quote]

Sounds like indoctrination.

How about pay… pay works

[quote]”Stimulus would be all right if we stopped paying those workers building unneeded homes, highways, gasoline cars and instead paid them develop wind farms, solar power, the smart grid, electrical cars and an efficient train network.”[/quote]

Provides the element of self direction that was lacking in the previous two attempts which frankly sounded Stalinist.

  • Thu, Jan 14, 2010 - 02:32pm

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    Re: Why Government Spending Does Not Stimulate Economic …

[quote=Gungnir]

Provides the element of self direction that was lacking in the previous two attempts which frankly sounded Stalinist.

[/quote]

I think we’re going around in circles here… You are assuming that people have a sense of “self-direction”… Do they? They are still paying other people to make gasoline cars, unneeded houses (through the government), highways and bridges that go to nowhere (especially true in Japan), empty cities (in China), etc…

You can’t get around the fact that they need education. How would you put it then?

Samuel

  • Thu, Jan 14, 2010 - 08:24pm

    #13
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    Re: Why Government Spending Does Not Stimulate Economic …

Ayn Rand was a novelist and philosopher.  She was not an economist nor was she a sociologist.   Her essential ideas have been spread to apply to far more than she had originally stated.  And they’re wrong.  Humans are not rational robots.  Humans are capable of great evil and great altruism.  Much of our social and economic philosophy for the last 30 years has been based on game theory, objectivism, and a perverse distortion of both when neither were meant to be applied to social engineering.

Much of our social philosophy has been based on the ideas of a paranoid schizophrenic and a novelist whose works came to the fore during a time when the US itself was extremely paranoid.  It assumes no altruism and that people will do what is rationally correct for themselves.  They don’t.  And when they do they screw over the companies they are responsible for and the people who trusted them in order to do as Ayn Rand recommended and get what they want no matter the cost.  

It’s time to let this go.  I know many of you will profoundly disagree with me and I respect your opinions,  but Ayn Rand, Milton Friedman, James Buchanan,  had their day,  and it brought us here.  It IS totalitarian only the rule is by the money not the law.

It is time to think of something new.

  • Thu, Jan 14, 2010 - 10:47pm

    #14
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    Re: Why Government Spending Does Not Stimulate Economic …

[quote=guardia]

[quote=Gungnir]

Provides the element of self direction that was lacking in the previous two attempts which frankly sounded Stalinist.

[/quote]

I think we’re going around in circles here… You are assuming that people have a sense of “self-direction”… Do they? They are still paying other people to make gasoline cars, unneeded houses (through the government), highways and bridges that go to nowhere (especially true in Japan), empty cities (in China), etc…

You can’t get around the fact that they need education. How would you put it then?

Samuel

[/quote]

I would put it that by your definition you are either an elitist since I assume you think you have self-direction which “people” don’t. Or you have no self direction, in which case your arguments are all fluff, and this is pure mental masturbation. Which one is it…?

[quote=On Our Own]yn Rand was a novelist and philosopher.  She was not an economist nor was she a sociologist.   Her essential ideas have been spread to apply to far more than she had originally stated.  And they’re wrong.  Humans are not rational robots.  Humans are capable of great evil and great altruism.  Much of our social and economic philosophy for the last 30 years has been based on game theory, objectivism, and a perverse distortion of both when neither were meant to be applied to social engineering.[/quote]

Nor does Rand proclaim humans are rational robots, evil and altruism are in the eye of the beholder. What is altruism anyway but a means for the “guilty” to feel better about themselves? I don’t believe in altruistic acts, since there’s always a pay off for the altruist the truly altruistic will do something with no pay-off, however there’s always the pay off about feeling better about yourself.

Similarly philosophies cannot by definition be defined as right and wrong, the same as an opinion, it is a statement of position, which inherently is scalar, by your definition I could argue that Christianity, Islam, Judaism, Hinduism, Freud, Aristotle, Nietzsche etc. etc. etc. is wrong. Rand’s ideas actually do hold water on many fronts, to throw the wheat out with the chaff because of certain inaccurate assumptions is irrational in itself which Rand would describe as “evil” (which I always found quite a dichotomy, based on her philosophy).

I suspect that you’re basing your theory of Rand’s philosophy on a free market, and true capitalism which has never existed in our lifetimes, indeed many here at CM are arguing for a more representative randian economic model than we currently have, free markets, lower government interference, lower government spending (and thus taxation), return to non-fiat currency.

I also think you’re giving too much credit to Rand, her philosophy has not gained as much of a foothold as you seem to think. nor do I think that Rands philosophies have been implemented has any bearing on the truth of what they said. Any more than the Catholic Church bears any relationship to the teachings of Jesus. I’m not sure how Rand fits with Friedman (other than Laissez-Faire ideas in his economics) or Buchanan, since Friedman was an economist (if you’d said Greenspan, then that would be understandable), and Buchanan is perhaps the worst president of all time.

By inference to your argument we should also tear up the constitution since it too has failed, and we should stop reading Jefferson, Madison, Franklin since their philosphies are wrong.

  • Fri, Jan 15, 2010 - 04:06am

    #15
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    Re: Why Government Spending Does Not Stimulate Economic …

[quote=Gungnir]

I would put it that by your definition you are either an elitist since I assume you think you have self-direction which “people” don’t. Or you have no self direction, in which case your arguments are all fluff, and this is pure mental masturbation. Which one is it…?

[/quote]

I am sorry dude if I hurt you feelings, but that’s off topic… I do consider myself part of the people, and I do not consider that I have “self-direction”. (Edit: I’d rather believe that people as a whole have self-direction, not any particular individual.) That is why I would like to know your opinion. From the tone of your reply, I get that you feel that my argument about people lacking education is incorrect, so let’s talk facts here. I would like an answer to the question: Why are people still paying other people for stuff that has no value?

Let’s be constructive here shall we?

Samuel

  • Fri, Jan 15, 2010 - 06:10am

    #16
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    Re: Why Government Spending Does Not Stimulate Economic …

[quote=Guardia]I do consider myself part of the people, and I do not consider that I have “self-direction”. (Edit: I’d rather believe that people as a whole have self-direction, not any particular individual.) That is why I would like to know your opinion. From the tone of your reply, I get that you feel that my argument about people lacking education is incorrect, so let’s talk facts here. I would like an answer to the question: Why are people still paying other people for stuff that has no value?[/quote]

I don’t know the answer, my answer was to get out of Dodge. I personally did not find that a lot of the stuff I had, held value so I divested to those who did, I left with no debt, and some property and capital; overall a better than zero sum game. You’re part of the people, why do you pay other people for stuff that has no value?

I actually don’t think it is off topic either, in many places people complain about the Government, Fed, NWO, etc. etc. etc. forcing people to do things that are counter to their best interests, however as you state the people have no self direction so what are the peoples best interests and how can we definitively say that these organizations are acting contrary to their best interests…? Maybe we shouldn’t be looking for an answer, but a question. The only way we could get those people to identify their best interests is to get them to think about what they might be, and the way that you get people to think is to challenge them, in their beliefs and thought processes.

Unfortunately the only way you could educate the people to stop buying stuff that the don’t need is the same way you get people to buy stuff they don’t need, by huge advertizing and marketing campaigns, which is a form of indoctrination, some of the most vicious psychology known to man is used in advertizing. Of course since you’ve admitted you have no self-direction how can we trust the direction you’ve set, of stopping construction of houses, gas powered vehicles, roads, bridges and cities? Have you been convinced of peak oil, because you believe it, or because a number of people here do? If you believe it because you’ve been convinced by the evidence, then you have a degree of self direction, if your convinced by weight of numbers of other believers you don’t. If 50,000 people all say the same stupid thing, it’s still a stupid thing.

More importantly, how can we be sure that the direction that the “education” takes is in the best interests of those who need it, how do we define those that need it, or that the education is welcomed. Unwelcome education is not education but indoctrination, and by defining a group that needs this education that in itself is an elitist assumption, maybe those demanding that others be educated are really the ones that need re-educating. It’s not that simple unfortunately, I’d bet Dollars to buttons that Hitler, Mussolini, Lenin, Stalin, and Mao did not set off with the express intent of creating the systems that they did, but it happened all the same, I’m sure they were party to it, but they had the best interests of others at heart even if only in the beginning (that’s not to say that they didn’t have what they considered the best interests of others at the end either). So we should be ever mindful that a “simple” answer to a seeming problem may lead to worse problems further down the line.

Now on real topic, the answer to why Government spending does not stimulate economic growth is simple, in a fiat system currency is created to fund economic growth, which leads to increased inflation and interest which results in devaluation in real terms of currency and leading to a lower standard of living. In non-fiat systems the sole way that a government can raise money to spend is by taxation which reduces net income therefore reducing internal markets and a lower standard of living. Why did we need a report from the Wall Street Journal to tell us this…? I thought it was pretty obvious; but that’s not to say that Investorzzo shouldn’t have posted it.

  • Fri, Jan 15, 2010 - 02:27pm

    #17
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    Re: Why Government Spending Does Not Stimulate Economic …

Yes, things are not simple at all, I realize that. I make simple statements, but they carry a lot of assumptions in the background. When I mention “education”, I usually mean the “perfect” kind of education that would solve all problems, if only we knew what the hell that was, but I agree we don’t.

As for peak oil, and the rest. Well, I grew up with parents that had these kind of values. They aren’t technically driven, but they value saving money and energy, eating well, growing vegetables, living the country and become as selfsufficient as possible. They are aware of things like peak oil, but they are not the kind of person that try to figure out when everything is going to blow up. I was always split between these values and what the rest of society had to offer me. On one side, there was what I knew was right, like a gut feeling, might well be genetic, but on the other side their was society doing things that didn’t make sense to me, but that was all there was, so I tried to adapt as best I could (not). My parents are not technical as I said… but I am the technical kind of guy, engineer actually. I realized last year with my research that I did that peak oil is pretty much here, and even harder to believe that we have no alternative energy sources! But in my eyes, it became so obvious! And this site, wow, I mean, reasonable people.. I never thought there would actually be a community of reasonable people on this planet. That blew it off. Screw society, never accepted me in the first place!

Don’t know that I can trust yet what I am doing now knowing what I did (not do) before.. there was a long thread about “demoronification” a few weeks ago. I could identify to some of the concerns expressed there

You know, about solutions and stuff, the more I think about it, the more it seems to me that humans can’t handle huge societies. It might well be that anything beyond a few thousand individuals is in fact intractable… That might make a good PhD thesis (if one cares for academia 🙂

Samuel

  • Fri, Jan 15, 2010 - 02:43pm

    #18
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    Re: Why Government Spending Does Not Stimulate Economic …

James Buchanan was an economist.

 

http://www.dallasfed.org/research/ei/ei0302.html

 

At first glance, public choice theory seems to be nothing more than common sense: Governments are collections of individuals whose interaction is determined by the same self-interest that motivates people in the private sector. The simple view that government is a collective decision-making process that altruistically solves social problems has a long and, according to Buchanan, romantic tradition both in political theory and in economics. Because of his thorough, individualistic approach to government and his adherence to subjective- cost doctrine,[7] his public finance models lie outside the neoclassical mainstream belief in the collective problem-solving model and in measurable, explicit opportunity costs. A pure subjective-cost approach denies that the actual costs of any action can ever be known, even by the decisionmaker(s), because the act of choice is itself cost, subjectively perceived. A theorist adhering to this doctrine would not carry out any benefit–cost analysis, as costs are inherently not observable and, therefore, not measurable.

Although the economics profession has resisted Buchanan’s arguments, public choice theory has, nonetheless, found its way into public finance discussions and has had a strong influence on government policies. As many economists came to doubt the efficacy of large, state-funded programs, they saw public choice theory as a way to examine what has come to be known as government failure. For decades following Arthur Cecil Pigou’s famous book The Economics of Welfare, economists saw government as a disinterested agency that could correct for market failures. Buchanan and other public choice theorists altered the debate by proposing that government may not really correct problems in the marketplace because of the wealth trading, or rent seeking.

 

There was a confluence of people who believed so strongly in the idea of the free market that they would sacrifice all in its favor.  They merged with people who viewed human behavior as very simplistic – solely driven by self-interest.   This is very much an over simplification of the drive of human behavior.  Does a soldier throw himself on a hand grenade to save his fellows so that he’ll feel better about himself?  It is counter to most of these arguments to give your life for someone else,  yet humans do it.  We do insane things that are counter-productive and self destructive in pursuit of pleasure or love.  Rand was influential in encouraging the general public to accept this view of themselves.  Nash (the schizophrenic) posited game theory which was meant for application in war and was then applied to everything from government to marriage – mostly disastrously.  He admitted later in life that his idea was probably flawed.  Friedman was the economic advisor to Reagan and heavily influenced almost all of the generation of MBAs who followed by teaching that businesses had no right doing anything other than seeking profit.  

The combination stripped the business class of any belief in any sense of responsibility to others or even to long term thinking.  It encouraged vast amounts of corruption in high end business and politics.  Thinking on this scale doesn’t change due to one person,  it comes form a confluence of thinkers.

The revolution and the constitution would not have come about if there had not been a series of influential people who led the way.  I believe people should study the past so as not to replicate it.  These ideas led us to where we are.  If we do not like where we are we need new ideas.

 

 

  • Fri, Jan 15, 2010 - 09:08pm

    #19
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    Re: Why Government Spending Does Not Stimulate Economic …

Govt spending on research and development within the military industrial complex, stimulates the economy, at times.  A rudimentary form of the internet was originally developed for military use….I think. Ironic how something developed for the war machine, could undermine the war machine. LSD, same.

  • Wed, Feb 24, 2010 - 07:40pm

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    Re: Why Government Spending Does Not Stimulate Economic …

[quote=A1B2C3D4]

I would encourage everyone to be more sensitive to the fact that we should never give our moral consent to the initiation of force. 

[/quote]

I watched the Crash course on YouTube and left comment on most every chapter. I had to come here and register to see if Chris had any mention of the Ultimate Solution. Of this whole website I find only your comment. As I said in a few of my comments at YouTube, the Ultimate Solution is so obvious yet hidden in plain sight that most people don’t know it when they see it. They don’t stop to think about the reality of it. How it is played out in everyday life. How, when and where The Problem exists. And that the Ultimate Solution is the only path to world peace, health, wealth and prosperity for all people.

Here’s a hint. Regard each and every act of initiation of force as though it was happening to you personnally or a loved one. Becasue in reality, it is happening to someone and their loved one. Denounce initation of force, threat of force and fraud at every instance it occurs.

Government by the consent of the governed means it needs your consent to tax you. Otherwise it is slavery. If you are coerced to pay taxes you are in involuntary servitude. Stand up for justice with your fellow man whom conducts his life without iniating force fraud and coercion. For you and he are right and just, and they are wrong and unjust.

Your tax dollars are used to further enslave you. The alphabet agencies enslave Americans at every turn. The money the government borrows based on the full faith and credit of the UNITED STATES Inc. is that you and every American is a creditor to the US, not a debtor. It is not your national debt. It is UNITED STATES corporation’s debt. US Inc. owes you bigtime.

There’s so much more I could write to succinctly bring the Ultimate Solution home to roost. I conserve my time an energy for a larger viral audiance.

Fighting for peace is like screwing for virginity.

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