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What’s Wrong With America’s Economy in 2:15

   May 20, 2012

Robert Reich on what’s wrong with our economy.

Point 5 has long been one of my biggest issues.  I characterize it as the Jay Gould phenomenon.

I can hire one half of the working class to kill the other half.

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29 thoughts on “What’s Wrong With America’s Economy in 2:15”

    2. Whatever you do, Smeety, don’t watch this video! It could be dangerous. It might make you question your long-held (and sadly mistaken) views of how the world actually works. It’s sharp, it might pop your well-constructed bubble.

      So don’t watch it, whatever you do!

  3. Says the man that rejects the crazy idea of a balanced budget.

    ‘How can I be out of money? I still have checks left in my checkbook…’

    1. ‘How can I be out of money? I still have checks left in my checkbook…’

      What I find incredible is that you actually think you’ve scored a point… You’re so catastrophically ignorant that you seem to think that the United States can run out of money. Amusing.

  4. Mabe Barry should print a cool million for everyone. Recession solved.

    Now we are being silly.

  5. “Or $10 million… This, of course, is a joke.”

    So much for that running out of money nonsense. Game. Set. Match.

    1. I know it was a joke… That’s why I linked to it. You’re million-dollar straw man is made of straw. Go back to Boots & Sabers, it’s more your speed. You seem to have trouble keeping up here in the real world.

  6. “You’re so catastrophically ignorant that you seem to think that the United States can run out of money…”

    Ah, yes….. the real world…. where money grows on trees…

    1. No, it doesn’t grow on trees. It grows in central banks.

      And Teacher patiently explains that numbers and morals do not mix, and that she simply made up the marbles because that’s all “money” really is, equations of numbers. And you don’t “get” numbers from some secret hidden pile of numbers somewhere. You simply add numbers when your economies are short of ‘money’: when people and resources are languishing unemployed and people can’t pay their debts; and you withdraw numbers (tax) once the economy is working near full capacity and price inflation gets too hot. She explains that euroland appointed her grand wizard dictator of the ECB because she alone was not mesmerized by the € sign, and she was not afraid of invoking wrathful plagues of ‘hyperinflation’ for daring to add and take away numbers that have a € on them.

    1. The wit and wisdom of Smeety:

      So say the Greeks

      How can I be out of money? I still have checks left in my checkbook…

      Mabe Barry should print a cool million for everyone. Recession solved.

      Ah, yes….. the real world…. where money grows on trees…

      I always wanted to have my cake and eat it too.

      This is what constitutes a cogent argument among conservatives these days… It’s sad, really.

  8. says the man who claims money ‘grows’ in ‘central banks’

    GAME. SET. MATCH. 🙂

    1. You keep using the phrase

      GAME. SET. MATCH.

      But I don’t think you know what it means… Generally you use it when you win. Since you haven’t, it’s rather embarrassing (for you) to see you keep using it.

  9. Yes Phil. You are being mocked for the very reasons you so humbly give.

    Game. Set. Match. TOURNAMENT.

  10. So in this magical land, how much money can these central banks grow?

    $100,000 per taxpayer?
    $1,000,000 per taxpayer?
    $10,000,000 per taxpayer?

    Teach me… Oh Wise One.
    (You are being mocked again.)

  11. Sooooooo…. you say central banks ‘grow’ money, but ‘how much can they grow’ is too tough of a question for you to answer. Debunks your entire ridiculous, greedy, selfish ‘theory’. Of course I am not surprised.

    Game. Set. Match.

    1. I love how you ask a question and then answer it all in the same sentence then declare yourself a winner. Are you really that insecure?

      Let me ask you some questions:

      1. What’s the rate for a 10-year Treasury Bill?
      2. How much has the M1 & M2 monetary supply grown since 2007?
      3. How does Quantitative Easing work? Did it impact inflation?
      3. What’s the current core inflation rate (CPI)?

      The simple answer to your question is this: A sovereign currency issuer like the United States have no limits on the volume of currency they create beyond the overall macroeconomic performance. Generally, the creation of dollars follows the demand for dollars. Likewise, the money supply can be tightened up when the economy heats up (as measured by inflation). But in our current situation where interest rates and inflation are low, expanding the money supply has little impact on inflation.

      Macroeconomic policy in a fiat currency regime bears no resemblance to “balancing your checkbook.” The government “creates” money when it spends on goods and services. When it taxes citizens, it “destroys” currency.

      I don’t know why I’m bothering. If you can’t work it out from the information I’ve provided, you lose.

    1. Let’s try it this way. The amount of fiscal stimulus required to return the macroeconomy to productivity depends on the depth of the recession / depression.

      So, for example, for the United States to escape the grip of the Great Depression required the President and Congress to work together to restore demand. Eventually, this took our entry into World War II and the associated military buildup to accomplish. That was, approximately, $3,444,848,000,000.00 in 2008 dollars. Combine that with the cost of the various WPA and other mass employment programs, you get a figure closer to $4 trillion.

      So that number would be approximately $30,000 / person.

      4,000,000,000,000 / 134,859,553 (1942 population) = 29660.486862209902179

      For the 2007 – 2009 Great Recession, the fiscal stimulus was a paltry $747 billion, far below the recommendations of many economists, including the ever-shrill Mr. Krugman.

      Even the C.B.O. says, however, that “economic output over the next two years will average 6.8 percent below its potential.” This translates into $2.1 trillion of lost production. “Our economy could fall $1 trillion short of its full capacity,” declared Mr. Obama on Thursday. Well, he was actually understating things.

      To close a gap of more than $2 trillion — possibly a lot more, if the budget office projections turn out to be too optimistic — Mr. Obama offers a $775 billion plan. And that’s not enough.

      So the number $2 trillion would have been what should have been spent on stimulus. The government should have injected $2 trillion, or approximately $6,500 per person (man, woman and child). The math is simple:

      2,000,000,000,000 / 311,591,917 = 6418.651739287575935

      So if you want a number per person, there it is.

      Now, of course that’s not how most of that money would be spent. It would be passed through the private sector in the form of grants, tax breaks, infrastructure spending, educational programs, retraining, etc.

    1. So? Like many conservatives, you think that uttering a big number makes some kind of point. It doesn’t.

      As shown previously, the increase in the debt is mostly the result of a sharp decline in revenue at the start of the recession, before Obama took office, and a steep increase in spending, which was partly the result of the administration’s stimulus bill but also automatic economic stabilizers (such as unemployment insurance) created by the recession.

      In fact, the chart shows government spending largely has gone flat in the past year.

      Numbers by themselves mean nothing, except as a kind of sad “oooga booga” used to scare little conservative children in the scary stories their ignorant parents tell them at bedtime. Adults know better.

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