Those low interest rates are fucking us savers over

I do not believe that it was coincidence that US interest rates, and for that matter interest rates across the globe, have been held so low for the last 5 years or so. That’s because as the report titled McKinsey Global Institute -Quantitive Easing (QE) and ultra-low interest rates: Distributional effects and risks (72 pages) shows, our government, and many others, used QE to transfer wealth from savers to themselves.

Traditionally interest rates have floated around 5 to 6½ percent, and served as a means for many savers to make a decent return on their cash. But in 2009, as Keynesian idiots an progressive tax & spenders took control around the globe, it looks like governments decided they wanted that money for themselves, so they dropped the interest rates to near non-existent rates as the graph below clearly shows.

Government Interest Rates

Government Interest Rates

As can clearly be seen, the last 5 years have allowed governments to get away with rates that were unprecedented. This allowed them to not only pay peanuts on money they borrowed, but they have been able to print tons of cash, devaluing the currency, while taking very little risk on their part. This has allowed our governments, but especially ours in the US, to save ridiculous amounts of money, as the next graph shows.

Government Savings Due to Low Rates

Government Savings Due to Low Rates

And these savings have come while these governments, but again, especially the one in the US, has engaged in terrible fiscal policy. This Keynesian shit doesn’t work. The left can keep deluding themselves otherwise, but the fact is that all we have done is traded $6 trillion in new debt – so far – for the illusion that the economy isn’t as bad as these progressives and their social engineering policies have turned it into. The damage, as is usually the case when government institutes these social engineering policies, is born by the people doing the right things, just like the next graph shows.

Impact of Lower Policy Rates on Savings

Impact of Lower Policy Rates on Savings

Literally our Keynesians have transferred trillions from those of us trying to save for our future to an inefficient, bloated, corrupt and mismanaged government and some of the richest people in the banking and commodities industries, while taking that money from the people trying to save for their future (like me). In short, the entire QE and debt policy of these governments, but especially that of our US government, has amounted to a massive hidden tax on those people engaged in the right fiscal policy of saving for their futures. This is not by accident. The progressives want government to control everything and everyone, and when people are destitute and beholden to government for the important things (healthcare now too!) they are far easier to control.

Reality is that eventually they will no longer be bale to keep these low rates. And then they are going to get hurt. In the US, where we now have hit $17 trillion dollars in debt, with the current government on pace to tack at least another $4-6 trillion more before they finally get send to pasture, literally doubling the debt accumulated in some 60 years in but a single 8 year presidential term, by what history should record was the most inept president and the most destructive decade of leftist failed economic policies in the history of this nation, and with the greatest fiscal burden ever put on our tax payers in the form of a government healthcare takeover, this gravy train can’t keep going. Sooner than later inflation will rear its ugly head, and then, we are going to get screwed. Hard. The debt we have accumulated, at normal historical interest rates, is going to suck up the bulk of the over $2.5 trillion the US government collects in taxes.

The writing is on the wall: the progressive nanny state is doomed. Despite the fact that the left is increased the pace of this destruction and is now piling on the added burdens we will face at staggering rates, we have choices that are going to need to be made. They are going to be hard choices, but the alternative is a collapse of our economy. Of course, with the progressives accumulating power and wealth like they have been doing for a while now, I feel this was the plan all along. These scumbags have positioned themselves to take over when that happens and they will be fine. The rest of us will find ourselves living in another version of the USSR only with even more inept and petty masters. But they all will tell us they are doing it for our own good.

Comments are closed.

  1. Aussiesmurf

    Doesn’t Exhibit 1 ‘clearly show’ that US interest rates were decreased to their current level prior to the inauguration of the current American President? How is this an indictment on ‘progressive government’? Was the 2000-8 government progressive?

    And how can you criticise the US government for ‘saving money’, while in the next paragraph also criticise the same government for increasing debt? Doesn’t ‘saving money’ mean a debt obligation is lower?

    And your hated progressive government is reducing the US deficit at a staggering rate.

    http://www.motherjones.com/kevin-drum/2013/09/deficit-falling-falling-falling

    And please show your work for the staggering assertion that the “progressives want government to control everything and everyone”.

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  2. CM

    Every economist worth his salt was on-board with lowering interest rates (to try and encourage investment). You have to search pretty deep for an economist who argued against it. The GOP economists advising McCain were telling him pretty much the same things that Obama’s economists were telling him. Any economist saying anything different was in a very small minority.

    They are going to be hard choices, but the alternative is a collapse of our economy.

    Which is possibly what would have happened if governments hadn’t done things like lowering interest rates, and pump money into the economy to keep businesses alive.

    There is no ‘working’. It’s the usual boring mindless rigid ideological narrative. It doesn’t matter at all that economists didn’t support lowering interest rates as part of some evil scheme.

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  3. InsipiD

    Doesn’t Exhibit 1 ‘clearly show’ that US interest rates were decreased to their current level prior to the inauguration of the current American President? How is this an indictment on ‘progressive government’? Was the 2000-8 government progressive?

    Far moreso than I would’ve liked. If you don’t believe me, Bush kept Greenspan around, who is the root cause of this policy. Bush initiated the bailout programs of the automakers and financial institutions. Obama’s policies have been Bush policies on steroids. Not muscle-building anabolic steroids, but the sad, bloating, predisone therapy kind of steroids.

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  4. AlexInCT *

    Doesn’t Exhibit 1 ‘clearly show’ that US interest rates were decreased to their current level prior to the inauguration of the current American President? How is this an indictment on ‘progressive government’? Was the 2000-8 government progressive?

    Are you really asking that question and thinking you have a leg to stand on? Who decides spending and spending policies, well at least what branch of the government is supposed to control that according to our constitution and was still doing that before the age of Obama muddled that all up? Let me give you a hint: it was the Pelosi controlled House. And Boosh was a compassionate conservative which we now know means he was a democrat-light. That’s progressive for ya, yes.

    And how can you criticise the US government for ‘saving money’, while in the next paragraph also criticise the same government for increasing debt? Doesn’t ‘saving money’ mean a debt obligation is lower?

    WTF you talking about? I am criticizing an insane and destructive Keynesian series of policies that screwed over people. Fuck the money saving bullshit. It was a graph to show that the low interest rates are an artificial construct and to show a dollar amount. That was not any kind of saving. The point is that these Keynesian scumbags are using a scheme that amounts to a hidden tax to transfer wealth from savers to the government, and then so they can keep deficit spending at staggering levels. That was blatantly obvious but you seem to conveniently pretend to not see that problem.

    And your hated progressive government is reducing the US deficit at a staggering rate.

    http://www.motherjones.com/kevin-drum/2013/09/deficit-falling-falling-falling

    Laugha-fucking-ble. I wouldn’t trust a recipe to cook eggs it came from that stupid propaganda site. You might as well have linked to the communist party propaganda site to make that claim.

    BTW Aussie, even if these progressive propagandists could accurately make the case the deficit was falling, the fact remains that our debt – due to deficit spending – will be doubled by this administration and its policies. If you drop deficit spending from $ 1.5 trillion to $1 trillion, you can pretend that’s a victory, but the reality is that you are still printing/borrowing $1 trillion every year. In the mind of idiots that kind of pyrrhic victory is something to crow about, but the left’s spending policies remain abject failures with horrible consequences. Let’s not pretend otherwise.

    And please show your work for the staggering assertion that the “progressives want government to control everything and everyone”.

    Anyone still pretending otherwise won’t be convinced by any facts. And the facts are in evidence. Look at that little attempt to take over 1/6 of our economy aptly labeled as Obamacare, because of the massive failure it is, to start with, then make your way down the ignored stories about the abuse of power by every government entity under this administration. Call me back when you have spent the next few months looking through that.

    You progs are shameless lying fucks.

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  5. CM

    Hidden due to low comment rating. Click here to see.

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  6. AlexInCT *

    No, as any economist will tell you, it’s to try and generate some demand when the economy is sliding into the shitter

    What a pile of shit, CM. Only Keynesian idiots will tell you this nonsense, but they don’t even believe their drivel anymore. The problem is that this government spending to try and fix the economy has never worked. In fact, the $17 trillion in debt, with even more debt on the horizon, a bigger growing nanny state that will necessitate even more of this idiotic deficit spending, and the fact that we are headed for an economic implosion, world wide, proves that. Go back and research the great depression and the first time government tried to do this shit.

    Ignore the Keynesians and focus on those that point out that it was precisely the government attempts to avoid some small and short term pain that caused a much longer and pronounced period of economic loss. We have known for a while that the pain of the great depression lasted far longer than it needed to because of government manipulations. It’s the same shit we are dong now. And guess what? The economic downturn keeps dragging on, even as we keep tacking on more and more debt we can never pay back. But let’s pretend that’s sold economic policy, even after we have mountains of proof to discredit the marxists and Keynesians, while screwing the middle class out of existence.

    Only an insane bunch of fucks would pretend that the cure for a person with a mortal bleeding wound it to stab the victim a few more times so it bleeds out faster.

    But you can’t acknowledge that because it doesn’t fit with your mindless rigid ideological narrative.

    Oh, that one gave me one hell of a laugh dude. It is not me that is wedded to a failed economic principle. You are priceless dude. Priceless.

    You’re no different – like any extreme idealogue you only accept information that suits.
    Two peas in a pod.

    Again, CM: they must have a picture in the dictionary of you next to the word irony.

    No, they’re not. The only thing in evidence is your extreme ideological narrative.

    You can keep pretending the problem is not there and that the issue is that I am biased, but that’s not going to make it go away. Play the ostrich all you want dude, but do not expect us to go along with it. You marxists are destroying any and all prosperity that was achieved by your betters on planet.

    Your silky charm won’t work on me godammit.

    If I but was an inept community organizer spouting collectivist nonsense.. The asses I would not tap….

    Still, at least you’re not from Mississippi….

    Are you? I usually hear the words “I didn’t think they could come that big in anything but black” when I show them mine….

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  7. Aussiesmurf

    AlexInCT says:

    December 3, 2013 11:46 am at 11:46 am (UTC -5)

    Doesn’t Exhibit 1 ‘clearly show’ that US interest rates were decreased to their current level prior to the inauguration of the current American President? How is this an indictment on ‘progressive government’? Was the 2000-8 government progressive?

    Are you really asking that question and thinking you have a leg to stand on? Who decides spending and spending policies, well at least what branch of the government is supposed to control that according to our constitution and was still doing that before the age of Obama muddled that all up? Let me give you a hint: it was the Pelosi controlled House. And Boosh was a compassionate conservative which we now know means he was a democrat-light. That’s progressive for ya, yes.

    I was referencing interest rates, as was your original article. Interest rates in the United States are set by the Federal Reserve. Are you saying that the House of Representatives is responsible for interest rates?

    And it is a completely separate topic, but I’m staggered by your statement that Bush Jr was a ‘democrat-light’. He cut taxes on the rich, tried to privatise social security, invaded a couple of countries, and was generally incompetent. That spells R-E-P-U-B-L-I-C-A-N to me.

    And how can you criticise the US government for ‘saving money’, while in the next paragraph also criticise the same government for increasing debt? Doesn’t ‘saving money’ mean a debt obligation is lower?

    WTF you talking about? I am criticizing an insane and destructive Keynesian series of policies that screwed over people. Fuck the money saving bullshit. It was a graph to show that the low interest rates are an artificial construct and to show a dollar amount. That was not any kind of saving. The point is that these Keynesian scumbags are using a scheme that amounts to a hidden tax to transfer wealth from savers to the government, and then so they can keep deficit spending at staggering levels. That was blatantly obvious but you seem to conveniently pretend to not see that problem.

    Low interest rates are a ‘hidden tax’? What?? Given your frequently-expressed support for ‘job creators’, ‘innovators’ and so forth, I would have thought you would have supported low interest rates as a boon for investment in businesses.

    And your hated progressive government is reducing the US deficit at a staggering rate.

    http://www.motherjones.com/kevin-drum/2013/09/deficit-falling-falling-falling

    Laugha-fucking-ble. I wouldn’t trust a recipe to cook eggs it came from that stupid propaganda site. You might as well have linked to the communist party propaganda site to make that claim.

    Umm – not sure what to say here. It was a simple graph of the deficit. In an attempt to pre-emptively negate your knee-jerk dismissal of anything to the left of redstate, I deliberately linked to the most milque-toast, middle-of-the road source I could think of. You think Kevin Drum is propaganda?? The equivalent to ‘communist party propagana? Seriously? What’s Josh Marshall? The equivalent to Stalin?

    BTW Aussie, even if these progressive propagandists could accurately make the case the deficit was falling, the fact remains that our debt – due to deficit spending – will be doubled by this administration and its policies. If you drop deficit spending from $ 1.5 trillion to $1 trillion, you can pretend that’s a victory, but the reality is that you are still printing/borrowing $1 trillion every year. In the mind of idiots that kind of pyrrhic victory is something to crow about, but the left’s spending policies remain abject failures with horrible consequences. Let’s not pretend otherwise.

    “You are still printing / borrowing”. It has been amply demonstrated that the biggest contributors to the US deficit are slow economic growth, low taxes and high military spending. I simply pointed out, in response to your whine about the deficit and debt, that the current administration has halved the deficit in one year. Apparently this is bad.

    And please show your work for the staggering assertion that the “progressives want government to control everything and everyone”.

    Anyone still pretending otherwise won’t be convinced by any facts. And the facts are in evidence. Look at that little attempt to take over 1/6 of our economy aptly labeled as Obamacare, because of the massive failure it is, to start with, then make your way down the ignored stories about the abuse of power by every government entity under this administration. Call me back when you have spent the next few months looking through that.

    Your trite statement that the Affordable Health Care Act is an attempt to take over ‘1/6 of our economy’ is risible. Although the health legislation was a small improvement on the disaster that was the United States health care system, it is essentially a government subsidy of private business. To state that it is a ‘government takeover’ is black helicopter thinking at its dumbest.

    You progs are shameless lying fucks.

    Stay classy Alex.

    I have plently of shame. I’m ashamed that the richest country in the world has a sizeable proportion of people who consider an attempt to provide poor people with health-care is a Stalinist takeover of the country.

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  8. Aussiesmurf

    Fair enough, Xetrov. As an infrequent commenter, I mangled the quoting, with a very unsatisfactory result. Apologies to all who have any difficulty reading the above.

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  9. AlexInCT *

    Copy and paste the following into your reply, and put your text between the two HTML entities to create the quote effect:

    <blockquote></blockquote>

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  10. AlexInCT *
    You progs are shameless lying fucks.

    Stay classy Alex.

    When I am getting fucked without the benefit of even a reach around and am getting told I am a bad person for daring to point out that I am getting fucked, I tend to forget the whole being classy bit. Know what I am saying?

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  11. Section8

    Not sure why lower rates would be a progressive thing. In a free market we’d expect the banks to lower rates if the economy was slow. Carter had sky high interest rates. I am worried about the printing of money and shenanigans such as the Fed selling debt to itself. Also, all the low rates in the world aren’t going to help if we keep making it too difficult for companies to start up or grow.

    Over regulation is a far bigger problem regarding our recovery. You can see the costs especially to small business here.

    Low rates though? That’s what you’d expect in a downturn. It’s other factors that are preventing us from moving forward.

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  12. Seattle Outcast

    Not sure why lower rates would be a progressive thing. In a free market we’d expect the banks to lower rates if the economy was slow. Carter had sky high interest rates

    It’s a simple matter of unnatural financial dinkering with the money supply – your two situations actually rely on the free market, but of the Fed fucking around with the supply of money and interest rates in various Keynesian methods that have historically been shown to be counterproductive in every instance.

    Much of it also depends on how scared various institutions are of the unnatural financial situations. Right now there is nobody that believes the recession is actually over due to unemployment being “unexpectedly high” every month and that real incomes have declined. We SHOULD have been out of the recession years ago, everyone knows it, so companies hoard money.

    A real explanation would require several hours of reading to get a good picture of what is going on, just remember that Milton Freidman is right, CM is wrong.

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  13. AlexInCT *

    Not sure why lower rates would be a progressive thing

    Because the rate is specifically being set at an artificially low level by government agencies that need it so they can continue the practices of tax & spending as well as QE money printing & borrowing. These rates should have bounced back up by now due to inflation and yet they are still held low. That’s only so government can keep borrowing/printing money.

    Over regulation is a far bigger problem regarding our recovery.

    Erm, these artificially low rates are part of that over regulation effort, S8!

    You can see the costs especially to small business here.

    The two groups hit hardest by the low rates are small businesses and small investors/savers. If you are a big investor, big business, or the government, you have been profiting form a wealth transfer scheme.

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  14. CM

    What a pile of shit, CM. Only Keynesian idiots will tell you this nonsense, but they don’t even believe their drivel anymore. The problem is that this government spending to try and fix the economy has never worked.

    Problems with that:
    1. It’s not a pile of shit and just saying it is doesn’t make it so. Which is ALWAYS your problem.
    2. No, even economists that don’t consider themselves ‘Keynesian’ support lowering interest rates in a recession. Because it makes sense. You don’t get to call something ‘Keynesian’ just because you don’t like it (because it’s inconsistent with your rigid ideological narrative).
    3. Who doesn’t “believe their own drivel”? Please name some names. Otherwise you’re just doing exactly what I said you’re doing.
    4. A stimulus isn’t designed “fix the economy”. Not even remotely. If that’s what you believe then it explains a lot.

    In fact, the $17 trillion in debt, with even more debt on the horizon, a bigger growing nanny state that will necessitate even more of this idiotic deficit spending, and the fact that we are headed for an economic implosion, world wide, proves that.

    Proves what exactly? That interest rates shouldn’t have been lowered? How does that follow? Or are you moving away from that claim and making it all very general all of a sudden?

    Go back and research the great depression and the first time government tried to do this shit.

    Your specific complaint here is about the evil scheme to lower interest rates which was apparently done IN ORDER to shift money to the people you hate.
    But even if I bite, what are you talking about – what is your basis for comparison? Where did a recession/depression get resolved by doing exactly the opposite of what all economists suggest?

    Oh, that one gave me one hell of a laugh dude. It is not me that is wedded to a failed economic principle. You are priceless dude. Priceless.

    You’re welcome. It’s inarguable. Which is presumably why you don’t actually argue.
    But go on, for the sake of it, who is it that is “wedded to a failed economic principle” and what exactly is that principle?

    Again, CM: they must have a picture in the dictionary of you next to the word irony.

    So you got nothing then?

    You can keep pretending the problem is not there and that the issue is that I am biased, but that’s not going to make it go away.

    The problem of interest rates being lowered in order to shift wealth?
    Oh that’s right, you’re ignoring your whole argument now.

    Play the ostrich all you want dude, but do not expect us to go along with it. You marxists are destroying any and all prosperity that was achieved by your betters on planet.

    Only a true ideologue would see someone like me as a Marxist.
    Again, you’re just avoiding.

    If I but was an inept community organizer spouting collectivist nonsense.. The asses I would not tap….

    Ah yes, Obama…. another Marxist.
    How incredibly lame, and lazy.

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  15. Rick Macherat

    Things simply are not following the rules of nature right now. We won’t know how it happened until after it does. I don’t know how to insulate except maybe to buy a small building of 5-6 of apartments for cash and plan to live in one and be a hard-hearted landlord. With a vegetable garden. Cause everything else will be GONE.

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  16. Iconoclast

    .I’m ashamed that the richest country in the world has a sizeable proportion of people who consider an attempt to provide poor people with health-care is a Stalinist takeover of the country.

    “An attempt to provide poor people with health-care” is just an ideological narrative. You can solve that problem without destroying the entire industry as Obamacare seems to be doing as we type.

    Family of Six-Year-Old Cancer Patient Loses Coverage, Now Faces Soaring Premiums

    But, according to some people who shall remain nameless, the system “works”…

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  17. Iconoclast

    This bears repeating:

    The notion that the nation faced a “crisis” of “46 million uninsured” was also dishonest. Pre-Obamacare health care in America was hardly nirvana, but the truth about the uninsured, according to the Congressional Budget Office, was that 71 percent were without insurance for a year or less. Only about 16 percent were uninsured for two or more years. More than 9 million of those counted among the uninsured were not citizens. Another 6 million who said they were without insurance actually were signed up with Medicaid, and 4 million more were eligible for Medicaid but had failed to enroll.

    The true number of uninsured individuals was closer to 15 million (5 million of whom were young, single adults). There were many possible solutions for them that didn’t require tearing down the entire system. In any case, the CBO estimates that even if Obamacare were fully implemented and worked smoothly, the number of uninsured Americans in 2023 would be, drumroll please, 30 million.

    Obamacare was never about the uninsured or justice for those badly treated by insurance companies. It was always about power — gaining it and keeping it for the Democratic Party and the central government. It was based on lies about the preceding system and sold on lies about its consequences.

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  18. AlexInCT *

    I’m ashamed that the richest country in the world has a sizeable proportion of people who consider an attempt to provide poor people with health-care is a Stalinist takeover of the country.

    Yeah, because the feel-good shit the left has peddled of the last 50 years , mostly by trying to shame people into giving up their earned money so the elft could grow even more powerful and entrenched, has worked so well for us all.

    At this point when I hear nonsense like this guilt trip CM tries to lay on us, it feels to me like a child molester trying to shame me into letting him molest more children. Because he means well and he loves them, don;t you know!

    But, according to some people who shall remain nameless, the system “works”…

    The illusion that something good was done is far more important than the reality of the thing. It is why we remain stuck with so many failed progressive schemes and scams. Obamacare just takes the cake.

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  19. Seattle Outcast

    1. It’s not a pile of shit and just saying it is doesn’t make it so. Which is ALWAYS your problem.
    2. No, even economists that don’t consider themselves ‘Keynesian’ support lowering interest rates in a recession. Because it makes sense. You don’t get to call something ‘Keynesian’ just because you don’t like it (because it’s inconsistent with your rigid ideological narrative).
    3. Who doesn’t “believe their own drivel”? Please name some names. Otherwise you’re just doing exactly what I said you’re doing.
    4. A stimulus isn’t designed “fix the economy”. Not even remotely. If that’s what you believe then it explains a lot.

    1) Actually, it is. History is not your side in this. So, “pile of shit” it remains

    2) You’ve confused cause and effect again. Or rather, the concept that interest rates in a recession will go lower on their own, and shouldn’t be controlled artificially by a central bank

    3) Perhaps “cognitive dissonance” would frame it better. You know, what you suffer from CM…

    4) But it is advertised as such when presented. And believed by the economically illiterate (like yourself) to actually be of benefit. What “fixes” an economy is removal of excessive regulation and attempts to push it in certain directions.

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  20. AlexInCT *

    What “fixes” an economy is removal of excessive regulation and attempts to push it in certain directions.

    Yeah SO, but how will removing excessive regulation help leftists pick the winners & losers, load their pockets up with tax payer money, or increase their ability to tell stupid rubes how they have to behave, in the name of “social justice” or whatever unicorn fart sniffing agenda du jour they are peddling, huh? Can’t have the wrong people profiting or getting ahead. Don’t you know better? Shees

    /sarc off just in case it was not blatant

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  21. CM

    But, according to some people who shall remain nameless, the system “works”…

    I hope you’re not suggesting I said that.

    At this point when I hear nonsense like this guilt trip CM tries to lay on us, it feels to me like a child molester trying to shame me into letting him molest more children. Because he means well and he loves them, don;t you know!

    The fuck? What guilt trip have I laid on you Alex?

    The illusion that something good was done is far more important than the reality of the thing. It is why we remain stuck with so many failed progressive schemes and scams. Obamacare just takes the cake.

    That reminds me somewhat of “But but but but Saddam has to go, it’s a good thing”.
    The illusion that not lowering interest rates and not providing an economic stimulus would have shortened the recession isn’t reality. It’s right-wing utopia. It’s the right-wing equivalent of communists arguing that it just hasn’t been properly implemented (“didn’t go far enough”).

    Dream on Alex. You can bang on about children being molested all you like, the fact remains that lowering interest rates and providing some of short term stimulus isn’t even remotely controversial in the world of economics.

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  22. CM

    1) Actually, it is. History is not your side in this. So, “pile of shit” it remains

    History is not on my side in saying that lowering interest rates is by far the predominant theory among economists (and not just economists who identify themselves as ‘Keynesian’)? Can you support that claim?

    2) You’ve confused cause and effect again. Or rather, the concept that interest rates in a recession will go lower on their own, and shouldn’t be controlled artificially by a central bank

    My statement you’re responding to doesn’t even mention cause or effect. It was about economist’s support of lower interest rates in a recession. If you have evidence that suggests that the predominant view (or even a significant minority view) is different, please bring it to the table.

    3) Perhaps “cognitive dissonance” would frame it better. You know, what you suffer from CM…

    Yeah good one. Same substance-free response as Alex then. As per.

    4) But it is advertised as such when presented. And believed by the economically illiterate (like yourself) to actually be of benefit. What “fixes” an economy is removal of excessive regulation and attempts to push it in certain directions.

    Thanks for the lesson in economic dogma.
    Alex claimed that “…this government spending to try and fix the economy has never worked”. I responded to that claim. It’s a FACT that stimulus spending during a recession is not designed to “fix the economy”, it’s designed as a short-term measure to try and keep the economy from plummeting further. Just like a sticking plaster is designed to stop a cut from bleeding everywhere and to protect it while it starts to heal. We’re not discussing what it was “advertised” as, or the degree of benefit (short, medium, or longterm) or otherwise. But nice attempt to distract with more substance-free blather.

    The problem with making the claims that you are Alex are making is that you’re relying on theory to suggest (and sometimes you guys will even try and use the word ‘prove’) the alternative would have been better. Which is precisely what an ideologue does.

    I look forward to your next substance-free response in which you address nothing. Don’t forget to add another personal insult.

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  23. Seattle Outcast

    it’s designed as a short-term measure to try and keep the economy from plummeting further

    Complete with graphs that show you you what a great idea it is. Only when the data is crunched later, the graph is wrong. So wrong in fact that it puts you in even worse shape that the “worst case” which it was supposed to magically prevent.

    As I said, history isn’t on your side. Keynesian efforts have never worked – and can’t work because they don’t actually describe how people behave. In order for this crap to work people would have to actively work against their own best interests in order to ramp up “aggregate demand” and other idiotic concepts used to describe how to enforce marxism upon a society.

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  24. CM

    Complete with graphs that show you you what a great idea it is. Only when the data is crunched later, the graph is wrong.

    Can you please show us this graph?
    Are you referring to the fact that things were worse (and got worse) than anticipated?

    So wrong in fact that it puts you in even worse shape that the “worst case” which it was supposed to magically prevent.

    If you’re suggesting the measures caused this, you’d need to demonstrate how. And if your theory is that doing nothing would have been better, you’d need to explain what would have happened in detail.

    As I said, history isn’t on your side.

    As I say, please feel free to demonstrate this.

    Keynesian efforts have never worked – and can’t work because they don’t actually describe how people behave.

    As we’re talking about lowering interest rates, how do people behave which means that lowering them makes things worse. And even if we expand the OP to include the stimulus, please also explain how human behaviour means that it doesn’t work.
    It seems to me that you’re talking far more generally. As usual discussions about Keynesian economics all need to be kept vague. And you NEVER mention how Keynes advocates cutting government spending during a boom (which means you’re never actually talking about Keynesian economics – only the cherry-picked parts you don’t like).

    In order for this crap to work people would have to actively work against their own best interests in order to ramp up “aggregate demand” and other idiotic concepts used to describe how to enforce marxism upon a society.

    What crap? Low interest rates and stimulus spending when private spending plummets? How does that work against the interest of individuals?
    I would have thought it was in everyone’s best interests to retain a functioning market-based economy, which is specifically why economists advocate low interest rates and government spending during a recession. When the dominos start falling these steps are an attempt to slow the fall of the dominos. Suggesting that all dominos should be left to fall over is nothing but rigid ideological dogma. There is nothing in history to support rigid ideological dogma working in practice.

    Seems to me that you have perverted the meaning of both ‘marxism’ and ‘Keynesian’ in order to criticise them.

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  25. Seattle Outcast

    Can you please show us this graph?

    Being stupid again? It’s been on this very site several times already. Go fucking look it up yourself retard.

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  26. CM

    Being stupid again? It’s been on this very site several times already.

    What’s wrong – can’t deal with a response that isn’t just personal abuse?
    That the graph was wrong was because the extent and depth of the recession was unknown at that time (people never have perfect information about the future, they can only do their best with what they have). The effect of the stimulus (and lowering interest rates, and other measures) is not directly relevant to the fact that the predictions were always going to be wrong. In the winter of 2009 the economy was in utter free-fall. The primary reason for the action being taken (lower interest rates, temporarily increase Govt spending in targeted way) was to slow and hopefully stop that freefall. There is little debate amongst reputable well-respected economists that stimulus spending provides the best bang-for-buck. That you disagree, while providing nothing to support your disagreement, is irrelevant.

    This piece looks at a number of studies about whether the stimulus ‘worked’ or not. Ultimately what is found largely depends on what is taken into account. But for what it’s worth the only two that didn’t come out saying “it worked” don’t exactly say “it didn’t”.
    http://www.washingtonpost.com/blogs/wonkblog/post/did-the-stimulus-work-a-review-of-the-nine-best-studies-on-the-subject/2011/08/16/gIQAThbibJ_blog.html

    Those who criticise the stimulus (because everything must be consistent with “government = bad”) always try to use that single graph. However if you look at other graphs, like what happened to GDP, employment and layoffs (just in case unemployment hides those who have given up looking) in the period after the main stimulus started the numbers all stop heading in the wrong direction and start heading in the right direction.

    In the real world (outside ideological bubbles) the ONLY argument against the stimulus was the argument that it was too small. But ultimately, as the economists who have studied it have predominantly found, the stimulus did what it was designed to do: SAVE THE ECONOMY. The US government (beginning with a Bush/Cheney administration) stepped in to provide capital where no one else would. And that likely made all the difference.

    Go fucking look it up yourself retard.

    You’re a credit to your home planet.

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  27. Iconoclast
    But, according to some people who shall remain nameless, the system “works”…

    I hope you’re not suggesting I said that.

    Nope, I’m flat-out saying that the person who said it said it. If you didn’t say it, then it obviously ain’t about you.

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