Economic Ravings
This is really just one discussion in a long line of them, full of hyperbole and oversimplifications (on both sides). This one in particular started from this article: 6 Steps by the IMF for a One-World Currency (if you're going to read it, do so with with loads of pinches of salt)
Feeling whimsically defiant, I responded,
Regarding the debt ceiling - I think the article you sent the other day had it closer to the mark : if the Repubs keep demanding No New Taxes in place of accepting massive legitimate reductions, I expect what'll next happen is THAT is when the FED is most likely to suddenly print prodigious amounts of money for sake of being defaulted upon and thus exploding inflation. Otoh, QE3, besides still being a mere possibility, is not at all the same thing. Trying to jump-start the economy is no easy task, especially when it's probably impossible. It seems that under all likely scenarios we either see meager growth (Keynesian-ish model), or else dramatic collapse followed by depression followed by sharp recovery (Austrian-ish model). Under either model the long-term prospects are not as rosy as people would have like to think - even the sharp growth in the Austrian world is mostly an error in math, as it's easy to post high gains when you're starting from a lower floor with a massively unemployed population but it takes a long time to get back to the level you were at and as you get higher the gains taper off again.
The biggest real problem we face is that in either scenario it takes a long time for unemployment to come back to something America is used to, and that's going to be relatively bad and last a long time unless we really create new industries or such. That is combined with a future in which more and more of the work force retires and saps the wealth of the workers, but what to do? We, as a country, made promises that were made poor assumptions, and then slashed revenues to the point that we're working with cents on the dollar of what was expected. What to do? Tell the elder generation to fuck off? These are structural problems in our economy and are not avoidable, as far as I can tell, though we can affect the degree.
The debt ceiling was just an arbitrary number anyways - one might note that for the past decade it has been raised annually almost procedurally. Capping at this specific value doesn't gain anything particular except cause us to crash into a wall. Much better to brake and swerve so as to minimize the losses due to the crash and throw momentum in the right direction.
All that aside; are you against a global currency? Why? It seems removing the dollar as the global reserve currency would constrain our economy in all sorts of ways and severely limit the government's ability to get away with inflationary practices. I just wasn't sure what aspect of global currency counters the domestic economy concerns?
"This sounds like a brilliant strategy to offset sudden currency collapse. However, it is actually a very subversive way to slowly elevate the SDR as a world reserve currency itself, and to replace the dollar entirely, while the IMF plays the hero. It also allows the IMF to slowly “harmonize” all the world’s currencies until there is no distinction in their value. The SDR becomes a de facto reserve unit without officially overthrowing the dollar."
But that's genius? Isn't it? By my understanding, modulo a bunch of details and theories,
1. We roughly agree that our current standard of living is unsustainable.
2. We roughly agree that the rest of the world is treated deplorably.
3. We roughly agree that the US government is too reliant on inflation and too loose in monetary policy.
By creating a basket of currencies and slowly introducing that into the system, there is a way to wean the US from its usual ability to just print money (yay on 3!) and a way to transfer wealth from the US to the rest of the world in an organized and controlled manner. On one level, this seems like theft, and at that level, it is. But this is necessary if we agree on 1 above, and doubly so if we agree on 1 and 2. To reach a sustainable level of living, the US has to decrease its relative wealth; but to do this, the wealth has to go somewhere. Either financial instruments flow, or there is a massive default somewhere and value flows; the former is easier to direct in positive directions, while the latter is a craps shot (good be fairly good, but could be terribly bad). In the "world currency" scenario, the US economy is forced to clamp down and get its financial house in order while the developing world is helped to develop in sustainable directions so we don't have endless wars between knots of cloistered people trying to horde against the very real threat of diminished resources that our current global gluttony is careening toward...
Nevermind. Just a thought. I'm sure everything is fine.
(Cause if you can't post stream of consciousness scenarios based on loose metaphors to a pseudo-anonymous blog on the Internet, what's freedom anyways?)
Feeling whimsically defiant, I responded,
Regarding the debt ceiling - I think the article you sent the other day had it closer to the mark : if the Repubs keep demanding No New Taxes in place of accepting massive legitimate reductions, I expect what'll next happen is THAT is when the FED is most likely to suddenly print prodigious amounts of money for sake of being defaulted upon and thus exploding inflation. Otoh, QE3, besides still being a mere possibility, is not at all the same thing. Trying to jump-start the economy is no easy task, especially when it's probably impossible. It seems that under all likely scenarios we either see meager growth (Keynesian-ish model), or else dramatic collapse followed by depression followed by sharp recovery (Austrian-ish model). Under either model the long-term prospects are not as rosy as people would have like to think - even the sharp growth in the Austrian world is mostly an error in math, as it's easy to post high gains when you're starting from a lower floor with a massively unemployed population but it takes a long time to get back to the level you were at and as you get higher the gains taper off again.
The biggest real problem we face is that in either scenario it takes a long time for unemployment to come back to something America is used to, and that's going to be relatively bad and last a long time unless we really create new industries or such. That is combined with a future in which more and more of the work force retires and saps the wealth of the workers, but what to do? We, as a country, made promises that were made poor assumptions, and then slashed revenues to the point that we're working with cents on the dollar of what was expected. What to do? Tell the elder generation to fuck off? These are structural problems in our economy and are not avoidable, as far as I can tell, though we can affect the degree.
The debt ceiling was just an arbitrary number anyways - one might note that for the past decade it has been raised annually almost procedurally. Capping at this specific value doesn't gain anything particular except cause us to crash into a wall. Much better to brake and swerve so as to minimize the losses due to the crash and throw momentum in the right direction.
All that aside; are you against a global currency? Why? It seems removing the dollar as the global reserve currency would constrain our economy in all sorts of ways and severely limit the government's ability to get away with inflationary practices. I just wasn't sure what aspect of global currency counters the domestic economy concerns?
"This sounds like a brilliant strategy to offset sudden currency collapse. However, it is actually a very subversive way to slowly elevate the SDR as a world reserve currency itself, and to replace the dollar entirely, while the IMF plays the hero. It also allows the IMF to slowly “harmonize” all the world’s currencies until there is no distinction in their value. The SDR becomes a de facto reserve unit without officially overthrowing the dollar."
But that's genius? Isn't it? By my understanding, modulo a bunch of details and theories,
1. We roughly agree that our current standard of living is unsustainable.
2. We roughly agree that the rest of the world is treated deplorably.
3. We roughly agree that the US government is too reliant on inflation and too loose in monetary policy.
By creating a basket of currencies and slowly introducing that into the system, there is a way to wean the US from its usual ability to just print money (yay on 3!) and a way to transfer wealth from the US to the rest of the world in an organized and controlled manner. On one level, this seems like theft, and at that level, it is. But this is necessary if we agree on 1 above, and doubly so if we agree on 1 and 2. To reach a sustainable level of living, the US has to decrease its relative wealth; but to do this, the wealth has to go somewhere. Either financial instruments flow, or there is a massive default somewhere and value flows; the former is easier to direct in positive directions, while the latter is a craps shot (good be fairly good, but could be terribly bad). In the "world currency" scenario, the US economy is forced to clamp down and get its financial house in order while the developing world is helped to develop in sustainable directions so we don't have endless wars between knots of cloistered people trying to horde against the very real threat of diminished resources that our current global gluttony is careening toward...
Nevermind. Just a thought. I'm sure everything is fine.
(Cause if you can't post stream of consciousness scenarios based on loose metaphors to a pseudo-anonymous blog on the Internet, what's freedom anyways?)