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AdHocSolver

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Member since: Thu Oct 5, 2006, 02:23 PM
Number of posts: 2,453

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Low interest rates will NOT stimulate the economy.

That is the same fraudulent claim that reducing taxes will stimulate the economy.

Both claims are based on trickle-down economics.

The economy will be stimulated only by increasing demand, that is, by increasing spending on goods and services.

The way to increase demand is to put money in the hands of those who will spend it.

This requires distributing spending so as to give income to the working and middle classes who will spend it, NOT the banks and NOT Wall Street, which suck the money out of the spending loop, and essentially are hoarders of money.

So, how should monetary assets be distributed to improve the economy?

Government should spend money on products and services that improve economic development such as infrastructure, education, health care, and research and development.

Another way to increase demand is to bring off-shored jobs back to the U.S. That means getting rid of one-sided, corporate-written trade agreements like NAFTA, CAFTA, the WTO, the IMF, and scuttle trade agreements such as the TPP.

Bringing outsourced jobs back to America will automatically increase wages as demand for workers increases.

However, to help the middle and working classes and increase demand in the near term, the minimum wage should be raised now to stimulate the economy.

The interest rates being kept low by the Fed are the interest rates on depositors' accounts, while the banks keep interest rates on credit card balances at 14 percent and higher.

This policy is the absolute reverse of what the banks should be doing to stimulate the economy. Middle class consumers are getting nothing for keeping money in a bank account, while the banks take a huge chunk out of middle class assets via high interest rates on loans (especially credit card balances) that the middle class could use to spend on goods and services.

The Fed is working for Wall Street, not main street. The Fed is not the solution. The Fed is part, a big part, of the problem.

Stockman's criticisms of the Fed are valid, but his assumptions and reasoning are flawed.

While Keynesian economics may be cited by the Federal Reserve as the rationale for its policy of easy credit, its activity is actually promoting "trickle down" economics for the benefit of the 1 percent.

As Stockman suggests in the article, easy credit is being used by those who already have some significant wealth as "free money" to "gamble" in the real estate and stock markets.

Keynes' postulated that governments should spend money on infrastructure to provide jobs and income for workers who would then be able to purchase goods and services (increase demand) and thereby grow the economy and create more jobs.

The Fed, by keeping interest rates artificially low, is actually damaging the economy, by cheating depositors out of a realistic return on their savings. Unemployed people cannot borrow and spend money when they have no income to repay the loans.

Moreover, bank depositors earn less on their savings than the current inflation rate so they lose principal.

Meanwhile, the wealthy get essentially "free" money to rig the stock market, buy out existing American companies and ship the jobs to China, and send the profits to tax havens such as the Cayman Islands.

Federal Reserve policy is NOT the solution to our economic problems. The Fed is a primary CAUSE of our current economic problems.

Capitalism is NOT an economic system. It is a religion.

The suckers (i.e., the non-1 percenters who "gamble" in the stock market) hold fast to the fiction that they can "beat" the system and come out the winner.

As in any gambling system, the house always comes out ahead by taking a cut of the gambled money. The 1 percent always comes out ahead. The money (the "capital gains") of the few winners among the 99 percent comes not from the 1 percent, but from the losses incurred by the losers among the other 99 percent.

The results are that some of the 99 percent make some "profit", a larger share of the 99 percent loses their "investment", and the billionaire players who rig the system take a big share of the losses of the 99 percent not won by the 99 percent that gained some "profit".

The 99 percent who refuse to see how the system is rigged are of the same mind-set as the climate change deniers. They refuse to understand the way the capitalist system actually works.

Their faith in the capitalist system is the same as the religious fundamentalists who believe that the Earth is 6,000 years old, and that Adam and Eve rode around on dynosaurs.

Interestingly, and unfortunately, the fiction of the mythology called Capitalism is more ingrained in the population, than the mythology of Creationism.

Wall Street and the banks work the stock market to run their Ponzi schemes.

The information at the link you provide helps explain how it works.

Reading the comments section at the link is also informative.

The stock market is NOT an indicator of the health of the REAL economy.

How quickly people forget Enron, as well as the boom-and-bust of the stock and real estate markets driven by "bad" mortgages and mortgage-backed securities.

The "value" of the Stock Market is based on the supposed validity of "trickle down economics" and the existence of Santa Clause and the Tooth Fairy.

In the current economic situation, the real winners in the stock market are the 1 percent who can manipulate stock prices by buying and selling large blocks of stock in a coordinated way.

http://www.zerohedge.com/news/2014-06-15/cluster-central-banks-have-secretly-invested-29-trillion-market

Teaching To The Test empowers the Test Makers to Determine Content.

Students who spend time learning pap or rubbish to pass a test have no time to study any subject in depth.

Having no time to learn any subject in depth, means that students will leave school having memorized, and mostly forgotten, a smattering of disconnected "data" that may or may not actually be "factual".

In other words, they will not only have not learned anything useful, they won't have developed any learning skills.

No Child Left Behind and Race To The Top are not about assessing learning. They are about making certain that no real learning occurs.

From reading the posts in this thread and others, there seems to be a striking similarity between...

...the "rape culture" mentality and the "vulture capitalist" mentality.

In both cases, a perpetrator exploits a situation to take advantage of a victim with no regard for the damage they do to the victim.

The perpetrator then blames the victim for the attack in the sense that the victim was "asking to be victimized" or the attack wouldn't have been successful.

In the case of the skilled factory worker whose job is outsourced to China after his employer's factory is bought by a vulture capitalist and the factory closed, the factory worker is blamed for engaging in the "wrong" kind of work or not having the right kind of skills. To add insult to injury, the now unemployed worker is told to go back to school and learn a new skill to become "employable" in the "new" economy.

Another example is the banking industry that swindled customers out of their homes, and when the economy started to collapse, the government came in and bailed out the banks which committed the fraud, rather than help the home owners who were swindled.

Your post brought to mind a truth about our economic system that few consider these days.

The truth is that at some point of economic growth and interconnectedness, economies of scale become DIS-economies of scale.

That is, as organizations (businesses, companies, governments) grow, the efficiency of operation and cost to the user decreases, until a point is reached in which further growth and concentration of resources starts to decrease the efficiency and increase the costs.

Using the "power grid" as an example, to maintain a large interconnected group of power stations and users, necessitates operating huge generating systems running 24/7, plus a huge bureaucracy, and the transport of huge amounts of fuel from source to centralized generating systems, while at the same time leaving the entire system vulnerable to a widespread collapse of the entire system from a cause that would be a minor inconvenience to a small part of the system if the users were in smaller, separated networks.

If manufactured goods were produced locally in areas where they were to be sold rather than in giant sweatshops thousands of miles away and shipped at great cost to the purchasers and the environment, not only would this create more jobs locally, but the goods would be much less costly to purchase.

I read recently that a company that raises chickens in the U.S. plans to ship the chickens to China for processing and then ship them back to the U.S. for sale. That chicken grower must be owned by an oil company or a shipping company. While it may be good for corporate profits, how would it benefit the consumer who will have to pay for shipping costs both ways?
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