Here's US federal spending.


How does expanding any of these sound like a good idea? If you want the economy to improve, simply forcing it to exchange hands from the rich to the poor does nothing. You want it to circulate. You want the velocity to increase. The velocity is what allows the market to have life and function, just like blood in a body. Raising taxes, lowering taxes, increasing spending, decreasing spending - it's all for not. The velocity functions as an economic multiplier.

A brief lesson for those that haven't clicked the Wikipedia link yet. Let's say a farmer has $50 to spend, and everyone else in the town has no money to spend. The farmer needs his tractor fixed, so he pays the mechanic $50 to fix it. Now the mechanic has money to spend. The mechanic pays $40 for corn from the farmer, then $10 from the welder to fix a tool. The welder now has $10. The welder then buys a cheap coat from the tailor. The tailor now has $10. The tailor then buys some milk and eggs from the farmer for $10, and that completes the cycle.

From the original $50, the economy of this little town is actually the sum of every expenditure. 50+40+10+10+10=$120. The velocity is then 120/50, which is 2.4. This is how our economy works. You get paid, you buy goods, those businesses buy goods, those second businesses buy goods, the money eventually gets back to the business that you work for, and that ends the cycle.

So a good economist attempts to find a kink in the hose. What stops people from circulating money? If you have $800, but you want a TV that costs $900, you might sit back a wait. This means the market goes a while without you spending your $800. So, what the government can do is 1) pay part of the TV for you (subsidies) or 2) give you more money (tax breaks). But this isn't the only problem. I've assumed that people are holding money in their pocket waiting to get enough. Really, it sits in a bank, and so the bank gets to use your money. Now the economist has to look at the banking system as well.

Luckily, this functions almost exactly the same as I discussed above. The bank has your $800. It can then loan $800, right? Wrong! The bank can make multiple loans of $800 (and make some interest money, of course). The number of loans the bank can make, the more times your $800 flies around and generates economic gain. Velocity plays a part here too.

The side effect of a really high velocity is inflation. The inflation lags behind, but eventually catches up to everything. It's something that has to be balanced just like everything else.

Here's the money supply for America for the last few decades.

The economy took off in the 90s because of a federal policy allowing banks to extend loans to "subprime" borrowers (for home mortgages, specifically). This meant that people that were less likely to honor their loans were given loans anyway. Lots of people that were "waiting to buy houses" and lots of banks that were "waiting to extend loans" were given the ability to spend their money. The policy worked wonders and the 90s saw a spectacular economic boom. However, it ended with lots of people defaulting on those loans. The banks then had to make up their losses, the people had to make up their losses, and so everyone reigned their expenditures. Velocity went through the floor, and the economy suffered enormously. Expecting a bad economy, more people reigned in their spending and the economy kept getting worse. The government has tried to encourage spending and tried to force money velocity, but nothing has worked too well.

The government has not tried two thing because they are afraid. They haven't touched the banking system, and they haven't touched unions. The last time they messed with the banks, the whole place collapsed. Understandable fear, but it needs to be done. Obama attempted back at the original bubble with the "home plan". This time they subsidize the loan payments rather than simply allow bad loans to transpire. It was a success, technically speaking, but largely insignificant. They need to subsidize business loans. Businesses drastically increase velocity, not home ownership, and a government expenditure here would stimulate the economy toward employment as well. Currently, the US spends about $100 billion in "corporate welfare", but considering we spend $229 billion in interest payments on our debt, it's not that significant.

The other option is to mess with unions. Yes, the advocate of the workers mess a lot of stuff up. Wanna lose your entire voter base in the north? This is how to do it. A way to increase the effect of velocity WITHOUT increasing inflation is to simply start with more. If the farmer in our original scenario had 100lbs of food to sell, the scenario would change if he had 150lbs. He'd still sell it for $50 (because that's all that's in the market), but everyone would get more. So what do I suggest? I suggest moving the retirement age back to 67 (and eventually to 77) and/or requiring workers to work for 45 hours a week. They'd get paid the same with their extra work. But, this would surge the economy. There wouldn't be any side effects except an angry citizenry. The economy would no doubt improve though.

Now that I'm at the end, I have to make this on topic. What party advocates this?

None. They all f***ing suck, and each politician wants to hold as much of the market as they can when it finally starts improving on it's own accord.

Txgangsta : Bernie doesn't want to make money "switch hands" from the rich to the poor, he wants to make the rich pay taxes that they get out of and he will tax transactions to provide the health care and college.

The economy has gotten worse because the rich have bought out parts of the government and kept wages down while finding ways to make more money for themselves. These rich people then send money overseas so they don't have to pay taxes on it and the government takes even more of a hit. Notice how more and more jobs are sent overseas? That's corporations and the rich people that own them making more money while taking jobs from Americans so there's even fewer jobs and fewer money going into the economy.

Corporate welfare is a thing. One hundred million dollars could do so much for the country but we spend it on helping out corporations so the CEO can give himself a raise while he decides to send jobs overseas.

Also ruining unions would just destroy the working class. Corporations and the government that has been bought out have been actively trying to destroy unions for a while now and unions are at the lowest point in decades. Unions are one of the few things keeping corporations from turning their employees into slaves!

NameEntry :

I think the working class is largely a bunch of spoiled brats that need to stop pretending they're a victim.

I'm 24, I work part time, I go to school part time. I don't make more than 20k a year. I don't drink, smoke tobacco or weed, eat fancy food, buy lots of coffee, get all the new games and systems, buy the new cool clothes, I don't own a car, I don't have health insurance, I don't have life insurance, I don't go on expensive dates with pretty girls (although I do like to go on super cheap dates with pretty girls) or anything. I don't even pay for the parking garage on campus, and instead elect to walk 2 miles to class. I have so much excess money, I pay for my sister's college so she doesn't have to take loans.

Single, childless people should easily be able to make it on less than minimum wage.

I agree that the money should not be hidden overseas, but what do you think happens to the money that is hidden? You think it disappears, or sits in the bank account forever? No, they invest it! They're taking the money that they illegally hide and then inject it into the market.

"The economy has gotten worse because the rich have bought out parts of the government and kept wages down while finding ways to make more money for themselves."

This is exactly what I argue against. Keeping wages down doesn't actually impact the economy. This has nothing to do with anything except who gets to spend the money within the economy. This does not increase or decrease the velocity of money. If the CEO gives himself a raise, that also doesn't increase or decrease the velocity of money. It doesn't matter who spends the money, it only matters that it is spent and stays circulating in the American economy. If it leaves, it doesn't help us again until it comes back around.

Txgangsta : Do you live by yourself? What state do you live in? Do you have kids? All of those things are a factor in what expenses there are in daily life.
You don't own a car or pay for any insurances at all? Car insurance is a thing and so is paying to keep a car on the road and working well enough as to not be a hazard to the driver or those around. In many states a car is a must. I have to have a car to get around where I live since many places are fifteen to twenty minutes by car. If I could walk safely to somewhere, it would take me hours. Also insurance is a thing that has to be paid for. What happens if you come down with something really nasty and you have to go to the doctor or the hospital? You're going to be paying for a long time. A short visit to the hospital without insurance can mean thousands of dollars you will have to pay or ruin your credit or have the hospital sue you. Do you know how much medications can be? I have asthma and my medication would cost me a hundred dollars if I didn't have insurance.


No, the rich do not invest back into our economy. They leave money sit overseas to collect interest or buy things from other countries. http://www.alternet.org/economy/5-reasons-rich-are-ruining-economy-hoarding-their-money

Rich people do not help the economy, they sit on their money! Do you know what helps the economy? Raising the minimum wage to a more proper level so all the people that work every day to make this country work have more money so they can live better lives and spend more money so the economy grows. Here's where you're seriously wrong.

Minimum wage is $7.25/hour nationally so that's #580 for eighty hours, a desired two weeks of work. People can't get full time anymore but let's go by the numbers. Twenty thousand people making $7.25/hour for eighty hours in two weeks is 11.6 million dollars. One rich person decides to buy a $500,000 house. Which scenario places more money back into the economy? Twenty thousand people working or one rich dude buying himself another house so he can get out of more taxes?

You subscribe to trickle-down economics or some version of it and through the test of time that theory has been proven wrong.

NameEntry :

Raising wages does nothing more but cause inflation. The inflation lags, but is present nonetheless. Business owners will simply charge more because they can. And if the rich shove their money in mattresses, then they hurt the economy. If they put their money in the bank, they give banks the money to actually lend. They only time your money is not in circulation is when it sits in your socks. If it's in a deposit, it is being invested by the bank. You just think banks piss on it? No, the banks are trying to make money too.

No, I own no car, and I don't pay insurance on my non-existent car. I own a bike, and I used to pedal for 45 minutes to work. Now I work closer to home, so it only takes 10 minutes. I also pedal very hard. I don't have kids nor do I live alone. If you noticed my post, I said that single, childless people can get by on minimum wage easily. Yes, children are expensive.

If I come down with something really nasty, I either get over it or I die. I haven't died even once yet. =)

NameEntry : dude read some economic books or just look at videos. the usa president can not rise the tax or order any laws to be made.

http://www.theatlantic.com/business/archive/2014/07/why-the-economy-grows-faster-under-democrats-than-republicans/375180/

http://www.nytimes.com/2015/01/05/opinion/paul-krugman-presidents-and-the-economy.html?_r=0

the president power:

https://www.law.cornell.edu/constitution/articleii

https://en.wikipedia.org/wiki/Article_Two _ of_the_United_States_Constitution

so whatever Bernie is telling you is flat out lies. the only thing he can do is talk to the people who have the power and they ignore his ideas (like every president has been doing). being a president means being a punching bag because the president is the last one to sign it and if he signs it the bill becomes law and it will be his fault (bills and laws are different).

Txgangsta : No, raising wages does NOT cause inflation. The last time there was a minimum wage increase, there wasn't mass inflation so why would it happen this time.

http://www.pewresearch.org/fact-tank/2015/07/23/5-facts-about-the-minimum-wage/

I all ready gave you links to information about what rich people do. They do not leave money sit in American banks, they let money sit in banks in other countries. That money is not used by the banks to give loans or anything, like the article states, it just sits there and moulders.

If you're going to ignore the information I present and just deny everything I post, there's no reason for me to continue with this. Do some research of your own and stop knee-jerk denying everything I post.


mastergame: So Obama didn't get anything passed the first two years he was in office? That's when the Senate and House were blue so things actually got done. This is why Bernie supporters are also voting for politicians that will work with Bernie.

Also I don't like the implied insult that I do not do my pwn research and that I just repeated what's fed to me. Don't turn this into a personal attack.

NameEntry: obama didnt do anything just read his activity record:

What Obama said at his 2009 inauguration: “And we will transform our schools and colleges and universities to meet the demands of a new age”

Verdict: According to PolitiFact, Obama has kept 54% of the education promises he made when he ran for president in 2008. But, according to NBC News, 212,000 teacher jobs were cut between 2009 and 2011.

What Obama said at his 2009 inauguration: “On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics”

Verdict: No progress here. Petty politics still get in the way, demonstrated by Susan Rice’s squelched nomination, the debt-ceiling showdown, the fiscal-cliff battle, and Washington’s failure to get nearly anything done in the 112th and 113th Congresses.

What Obama said at his 2009 inauguration: “To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect”

Verdict: Total failure, people are worry about Muslim people being part of ISIS or lone wolfs.

The Promise: "As president, Barack Obama will close the detention facility at Guantanamo."

Update November 30th, 2015: 'Disappointed' Obama signs defense bill making it harder to close Gitmo

The Promise: “What I have said is we're going encourage democracy in Pakistan, expand our non-military aid to Pakistan so that they have more of a stake in working with us, but insisting that they go after these militants. And if we have Osama bin Laden in our sights and the Pakistani government is unable or unwilling to take them out, then I think that we have to act, and we will take them out. We will kill bin Laden. We will crush al-Qaida. That has to be our biggest national security priority.”

Update April 2nd, 2015: Islamic State and al-Qaida affiliates still growing

lastly-

You will notice that most of Obama’s failures result, not from taking a bold stand, but from taking no stand and just letting events drift. Certainly, in a lot of these cases, Obama has given speeches or press conference to announce his enlightened intentions—then done nothing to plan for how to actually achieve his goals.

Bernie cant do anything about laws just like obama did with his laws. the only thing Bernie can do is enforce the law and ask congress to change the law. everyone knows that congress will ignore whatever president, this will never change no matter what. Bernie is not special, he has no power over congress, his too old, and just straight out lying to everyone. the only reason you supporting him is because of the lying collage spending cut that doesn't exist. a collage is not part of any government, they do get money from them but they are not part of the government. If be so, college compass can flat out refuse to accept people because its their right not the people. too much students means the resource for books, technology, teachers (you might get bad teachers) or classroom space can lead to many problems. it has happen before and no one wants that to happen again.

there is no such thing as unlimited resource, many or otherwise. 

DEFINITION of 'Scarcity' The basic economic problem that arises because people have unlimited wants but resources are limited. Because of scarcity, various economic decisions must be made to allocate resources efficiently.

mastergame :
NameEntry :
Txgangsta :

This has become off topic in regards to what the thread is about, if you guys want to debate the presidential candidates, economy and the power of the president further and whatnot then you should find a more appropriate thread to do so or make your own.

Furthermore as a note in general for everyone while I'm not pointing fingers I'm asking you guys to keep it civil. Heated discussions are fine but don't get personal with the people you are discussing besides from not leading to any actually productive results and making a bad case for yourself, it more times than not devolves into flaming which will not be tolerated. Keep on point about the topic.

Well, of course they'd grab a new candidate if Hillory's health issues got too bad (they're already really bad), and Bernie tripped and fell off the stage and ended up unable to run. (I don't want him to die, I'd never wish that on...most people) But Ben Carson is my number one pick, atm, then Ted Cruz, then Trump.

I'd never vote democrat though, never in a million years would I vote democrat.

Bumping this up to the top. Can't believe I forgot about this.