If buffet wanted his secretary to pay the same income taxes as he does...
- Thread starter NLXSK1
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mame
Well-Known Member
Nah, you just made it innaccurate. Central banking will remain vital for as long as every nation prints it's own currency, and even in a world in which there is only one currency you'd still need at least one central bank to oversee it.^^ Fixed it for you
lifegoesonbrah
Well-Known Member
Why? The market can set interest rates better than the fed.
dontexist21
Well-Known Member
Please show me where in my post where I was wrong and I am a idiot for stating a fact. The fact that you think that simply cutting taxes are going to lead to people spending more and creating more jobs and foolish and shows how little you know about economics.
Just because people have lower taxes does not mean they are going to spend more. People have to be secure about the economy. Such as if they get sick, if they can pay for health care. If they can pay for their living, or if they are secure with where they live. Many factors play into if people spend money or not. The basic fact that you do not understand this shows you only have a ideological view of the world and don't understand real situation problems and how they are really solved.
If trickle down economics worked, then why did Reagan raise taxes? Hint: It was not because it worked.
So no trickle down economics has not shown to work. Show me the DATA that it works. We can argue the sky is green all day but until you can show me its green its blue.
Before you call someone a idiot who clearly understand economics more then you, try to at least understand what you are arguing.
Final Point:
As it has been stated before, many large companies are making money hand over fist, but are not hiring why? It is not because of taxes, which for many large businesses can be easily lowered through loopholes. It is because there is no demand. Proving Reaganomics does not work.
dontexist21
Well-Known Member
If the market controlled interest rates fear would play way to much of a role on deflation and inflation. We live in a world of finacial insecurity in the states. Many people do not realise that we live in a global economy, no country is in a bubble. To get foreign investment into the country they have to be sure that you have a infrastructure that is able to deal with sudden shifts in global invents.
If Iran started a war with Saudi's, heaven forbid, what do you think that would do to the interest rates. It would be suddenly much more expensive to borrow money since people would have fear. How much worse do you think it would be if there was no control over the markets. It would not be pretty.
Show me on coutry that is doing well that does not have a central bank, not a single one.
If the US had no central bank, no one would invest in the country for fear that there are no protections to there investments.
Just because the system is broken does not mean we should dumb the entire thing, it should be fixed.
lifegoesonbrah
Well-Known Member
The Federal Reserve causes problems when they control interest rates. This can be seen through the great depression to today. The artificially low rates causes underinvestment and overconsumption. I believe if you let the markets decide it will operate more efficiently. Under a free market economy, lack of investments would increase demand for money and drive up interest rates which would in turn encourage investment. The market equilibrium would adjust according to the demand and supply for money and prevent inefficiencies and bubbles.
dontexist21
Well-Known Member
Yes in a perfect world, but again we are dealing with a very imperfect global environment. How would the market deal with countries keeping there currency low i.e. china, giving them an unfair trade advantage. Massive shifts in the market because of unforeseen global problems i.e. Europe debt, and who would want to invest in a market where there are no protective barriers.
A central banking system is essential in today WORLD economy for a country to survive and remain prosperous.
The free market is only a pipe dream, for a system to work properly you have to have protective mechanism to deal with unforeseen situations. If we got rid of our fed today, we would be handing our economy over from american bankers to foreign bankers, i.e. China. Who can manipulate their currency to screw us.
lifegoesonbrah
Well-Known Member
What does this have to do with the fed? The only thing the fed does is set interest rates to banks and control money supply. (well besides secretly injecting trillions of dollars to domestic and foreign banks) China already has a fixed exchange rate relative to the dollar, many countries have done this.
dontexist21
Well-Known Member
Again the point of the fed is to control interest rates, which is necessary when you are a foreign investor, or any investor. Who would invest in a country and buy the currency when they know that it is to the whims of any out side power and you can have high inflation or deflation happen at a moments notice.
Without foreign investment where do you think the US would be in the global economy, I can tell you it is not a good picture.
Yes with out the fed foreign banking institutions could use their own currency to manipulate the dollar directly.
Just because the fed does not operate in the way that it was supposed to does not mean it is a bad thing. I personally believe the policies of the fed should be looked at and reformed, not done away with so that the "markets" can take care of them.
With out the fed, if there was a large hit to the markets and something went wrong, and people would start to dump the dollar just for the fact that there was nothing to unsure that it would not be worthless the next day. That is the point of a central working banking system, to insure some sustainability to the countries currencies.
The fed also serves to insure that when I put money into the bank, and the bank goes under, my deposit is insures. Again another protection crucial to investment, and something that the markets will not protect. Remember the Great Depression...yeah that is what the fed protects against.
The fed, if it worked properly, insures that banking institutions have are regulated and they do not do stupid bets with other people's money. What we have seen in the past decade is not what happens when you have a central bank, but when you have central bank that does not work properly. It would have been a lot worse if we did not have a central bank when all of those banks went under.
Final Point:
There is no way in today's global enviroment you need a system to proctect your money against outside forces that wish to cheat the system. That is why we need a PROPERLY working central banking system. How does not market insure foriegn investments that the money is safe, protect average consumers from large banks betting with their money. It just can't.
Who do you think would control the "market". It is not some invisible hand, that idea is a illusions. Look a at the 1920's before the depression. It was controlled by and even smaller amount of people which completely desimated the world economy. At least this time around we had system to ensure that it was not as bad.
Supply and demand over simplifies what how money actually works in todays global diverse economy.
Without foreign investment where do you think the US would be in the global economy, I can tell you it is not a good picture.
Yes with out the fed foreign banking institutions could use their own currency to manipulate the dollar directly.
Just because the fed does not operate in the way that it was supposed to does not mean it is a bad thing. I personally believe the policies of the fed should be looked at and reformed, not done away with so that the "markets" can take care of them.
With out the fed, if there was a large hit to the markets and something went wrong, and people would start to dump the dollar just for the fact that there was nothing to unsure that it would not be worthless the next day. That is the point of a central working banking system, to insure some sustainability to the countries currencies.
The fed also serves to insure that when I put money into the bank, and the bank goes under, my deposit is insures. Again another protection crucial to investment, and something that the markets will not protect. Remember the Great Depression...yeah that is what the fed protects against.
The fed, if it worked properly, insures that banking institutions have are regulated and they do not do stupid bets with other people's money. What we have seen in the past decade is not what happens when you have a central bank, but when you have central bank that does not work properly. It would have been a lot worse if we did not have a central bank when all of those banks went under.
Final Point:
There is no way in today's global enviroment you need a system to proctect your money against outside forces that wish to cheat the system. That is why we need a PROPERLY working central banking system. How does not market insure foriegn investments that the money is safe, protect average consumers from large banks betting with their money. It just can't.
Who do you think would control the "market". It is not some invisible hand, that idea is a illusions. Look a at the 1920's before the depression. It was controlled by and even smaller amount of people which completely desimated the world economy. At least this time around we had system to ensure that it was not as bad.
Supply and demand over simplifies what how money actually works in todays global diverse economy.
lifegoesonbrah
Well-Known Member
Please explain, not sure what you mean here.
Actually a lot of economists attribute the great depression to the newly implemented Federal Reserve system due to excessive deflationary policies and unsuccessful regulations.
I agree banking regulations are good, but I think congress should make these monetary regulations, such as the money multiplier restrictions, and not an unaccountable private banking system. A lot of the arguments that you are making for the fed have to do with regulations which can be dealt with through congress and treasury. We need a system that is accountable and more transparent. This idea that they keep federal reserve policies and actions a secret in order to protect the markets is loony in my opinion. We should not allow an entity outside of our government to have control of our currency. Congress can't even get a full audit to see where our money has been going. Have you seen Ron Paul's partial audit of the fed?
Over 16 trillion of secret bailouts exposes in the only successful partial audit:
Citigroup: $2.5 trillion ($2,500,000,000,000)
Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
Bank of America: $1.344 trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank (Germany): $354 billion ($354,000,000,000)
UBS (Switzerland): $287 billion ($287,000,000,000)
Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)
This is dangerous because every time they do this they greatly increase the money supply and further devalue the dollar. Its time we have control over our currency again.
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