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Edited by Mrph1 on Nov 30th 2023 at 11:03:59 AM
That doesn't mean some won't try.
edited 6th Dec '12 9:51:02 PM by DeviantBraeburn
Everything is Possible. But some things are more Probable than others. JEBAGEDDON 2016@Serocco: Can't agree. If anything, I'd say the reverse; Boehner is actually realizing that Obama has him over a barrel and that the fiscal cliff will cause irreparable damage to the Republican Party, so he's launching a purge and making sure he's in position to make a deal with the Democrats, whatever the Tea Party does. I'm not going to call the guy a hero or anything, but he is in an impossible position that wasn't really of his own making, and the best way he can see to get out of the quagmire is to purge the Tea Party and form a coalition with the Democrats, even at the expense of ever being able to get cooperation from his own party again.
Now, granted, he did purge one guy for being "too liberal," which is something I really can't read. My best guess as to his thinking is that he's trying to make it look like a naked power grab instead of an attempt to compromise with EVIL to save the country. Either way, it smacks of him being desperate and hitting the panic button.
Different attitude; this was before PR execs started determining campaigns (before Obama, notice how many presidents had the exact same coiffed hair and photogenic smiles) and the Cult of Centrism hadn't taken off yet, nor the major media behind said cult. IIRC, FDR once said of his opponents "they are united in their hatred of me, and I welcome that hatred". You'd never find Obama saying something like that today.
Share it so that people can get into this conversation, 'cause we're not the only ones who think like this.And they could make this
their party anthem.
edited 7th Dec '12 7:03:02 AM by tricksterson
Trump delenda estRe: economics. I cannot overstate how much my view of the Universe is changed. I mean I was sitting thinking China was this close to declaring the US one of the Chinese provinces. I thought no debt ceiling automatically meant we were going to go broke and create a third world country.
This is why I come to OTC. I gain things I never would anywhere else. This place makes me better.
With that said....can someone please explain how recessions and depressions work? I mean, we don't have famines and the like anymore so....exactly how do jobs just disappear and stuff becomes massively expensive?
It was an honorRecessions and Depressions happen when we don't put controls and limits on our economy. What happens is that greed for short term profit causes companies to engage in shady activity like gathering mortgages they know are bad and selling them as good. (This was the cause of the current recession.)
This causes a temporary boom in the form of faking economic growth on one large confidence scam, then it falls apart taking everything it touched down with it. Basically, if we passed more laws regulating bad business practices we'd have fewer crashes. That's why they didn't happen after the Great Depression until we started relaxing business regulations again.
tl;dr: Conservative lawmakers won't regulate business like they should.
Reality is that, which when you stop believing in it, doesn't go away. -Philip K. Dick@Starship Maxima: At its core, an economy is an equation of supply and demand. Supply = manufacturing, production, farming, all the sources of stuff that people need and/or want. Demand is the ability of people to buy things. So as to avoid the inefficiency of the barter system, which is that you don't always have a pig to trade for five chickens, we use money as an storehouse of value. Money is a form of stored utility — it represents a debt of time/labor/goods that can be exchanged with any other person for an equivalent amount of time/labor/goods.
When the supply/demand balance gets out of whack, problems occur. A supply crisis happens when there isn't enough production/resources to satisfy demand. It can be as simple as a drought making food scarce or as complex as a real estate bubble where an increasing amount of money is chasing a fixed supply of houses.
A demand crisis happens when the purchasing power of consumers drops and they are no longer able to buy all the stuff that the economy is capable of producing. Demand can fall when a product is no longer seen as desirable, or it can fall when a systemic shock (like the credit crisis of 2008) sets off a shift from spending to saving across the consumer market.
The technical definition of a recession is a certain number of quarters of declining GDP. There is no technical, agreed-upon definition of a depression but it is generally a sustained economic malaise such as the one we're in now, when total production remains substantially below capacity and unemployment remains high.
There are two major causes of recessions: from a supply side and from a demand side. In a supply crisis, you have too much money chasing too little goods. There are a couple of solutions to this. First, increase supply — this takes the form of investment (either directly by the government or encouraged by means of rate changes and/or tax policy) and is generally a good thing as long as the demand itself isn't artificially inflated (e.g., the housing bubble). Second, reduce demand — this can be done by raising interest rates to soak up available credit or increasing taxes to soak up consumer cash.
There have been a couple of recessions in the past few decades that were triggered deliberately by the Fed, which raised interest rates to cool off an overheating economy. There was no fundamental problem with the system, it was just a gentle application of the brakes to rein in inflation — and as soon as the Fed relaxed rates, growth resumed.
The other kind of recession is triggered by a demand crisis. The recent housing bubble is a perfect example of overreach in the private debt markets, with waves of borrowing chasing ever-increasing housing prices, fueled by lax regulatory policy and tacit encouragement by the administration, coupled with naked greed on the part of bankers. Consumers got over-leveraged, meaning they borrowed too much against assets whose value was at best expressed as "wholly fictional". When the value of the assets collapsed, consumers were forced to stop spending in order to pay down their debts; this caused a global reduction in demand that triggered mass layoffs, which further reduced demand and sent more private consumers over the edge of bankruptcy, and so forth in a vicious cycle.
The Great Depression was in fact two recessions separated by a false recovery, and it was a massive demand crisis.
In a demand crisis, increasing supply does nothing because supply is not the problem. Building more houses is pointless when people aren't buying the ones already for sale. You can shovel money at banks to help encourage lending and save businesses that might fail because they can't access short term credit, but none of that solves the underlying problems: high unemployment and consumer debt holding down spending. Furthermore, inflation (on a large scale) cannot happen in this scenario no matter how much money is floating around, because inflation happens only when demand exceeds supply.
In this situation, when borrowing costs are at record lows but economic activity is stagnant due to reduced consumer purchasing power, the government's role is to boost demand, kind of like a jump start on a dead car battery. Throw money into the consumer economy, which will be spent immediately. If it is sustained for long enough, it will increase net demand, which will make businesses willing to hire again, which will give consumers more money to spend, and so forth. You break the downward cycle and replace it with an upward cycle.
Doing this reliably requires an infusion of money that is at least half of the total production gap — that is, the difference between what the economy is doing now and what it could be doing if the recession hadn't happened. It's an ideal time to borrow this money, because you're taking cash that's sitting idle in investors' bank accounts and putting it to use boosting the economy, which will pay dividends once things are moving again.
This is Macroeconomics 101.
edited 7th Dec '12 9:48:50 AM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"Some recommendations for easing into Economic Theory for the turgid allergic and plot-hungry... might I recommend Going Postal and Making Money?
Heck, it's practically Terry Pratchett's hat: "things I should have learnt in school, the fun way".
edited 7th Dec '12 9:45:30 AM by Euodiachloris

How probable do you think a split among the Republican majority leading to the installment of a Democratic Speaker in a Republican majority house is?
edited 6th Dec '12 9:34:16 PM by OhnoaBear
"The marvel is not that the Bear posts well, but that the Bear posts at all."