> Wow ! This person talks like she understands the
> economy and doesn't understand the concept of fiat
> Yes, the Congress turned the management of the
> money supply over to the Federal Reserve system
> quite some time ago. Very good. And yes, the
> Whitehouse does not issue money. Very good again.
So you concede that fiat money is controlled by the Federal Reserve. That's a good start. But if that is the case, why did you criticize Biden for creating $2 trillion in fiat money? You just acknowledged that he did not and could not.
> But the Federal government has an unlimited line
> of credit with no specific requirement to have it
> repaid by any certain date.
azsteve, borrowing is not fiat money. If it were, then your borrowing money to buy a home or using a credit card to purchase a Big Mac would mean you have created fiat money, which would make you the Federal Reserve.
Are you the Federal Reserve, azsteve?
> But repayment is
> guaranteed by the Federal government. This is
> where the new guy comes in with his $2T plan. With
> the help of the legislature he can write checks
> for any amount which in this case is $2T. The
> Central banking system then creates the money from
> nothing, and issues the money to the US
Right. Except that when the US government uses what you just described as its "unlimited line of credit," it does so by issuing bonds. The Fed is not involved and fiat money--which is currency--is not created.
That's why when Biden borrows money for new programs or Trump cuts taxes to enrich the rich, the deficit swells and the national debt goes up. If the government or the fed were creating fiat money--creating it out of thin air--there would be no new debt and the national debt would not go up.
See where you get when you confuse borrowing with fiat money?
> The real question is how we can call this an
> investment. Real value would come from raw energy
> (real intrinsic value that drives people to work
> and moves machinery to build infrastructure)
> flowing in to the the country via a petroleum
Again, you keep taking government investment--which traditionally has meant everything from education to tarmacs, from electricity grids to airports and hospitals and space technology--and reducing it to energy, which is a tiny fraction of total public spending. Why is that?
> So okay, let's just say that everyone is on-board
> with the $2T loan and calling it an "investment".
So now you are calling the $2 trillion a "loan?" I think you mean borrowing. But in either case it wouldn't be fiat money.
> As we spend the $2T, do we want to fuel everything
> we do (from driving the kids to school to
> operating machinery to build bridges) with $2/gal
> gas or with $4/gal gas?
But the Keystone Pipeline was not government investment. It was a proposed private-sector initiative that Trump wanted to permit, not to fund. You are confusing private with public investment.
Putting that aside, let's look at your price projections. You say that the pipeline would reduce the cost of gas from four dollars per gallon to two dollars. That's a bit of an exaggeration, isn't it? I mean, the Keystone pipeline would generate 600,000 barrels of oil per day--which is less than one percent of global daily consumption. So rather than reducing the price of gas at the pump from $4 to $2, the actual change would be more like $4.00 to $3.96.
That means your math is off by somewhere around 10,000%.
> Who gets the interest
> money on the extra $1T that we pay because we shut
> down the pipeline? I'll give you a hint: It's not
> the homeless. Another hint: GNPE mentioned
> increasing costs on everything needed to build
> homes, the raw materials.
Fascinating. Say that energy accounts for a third of the cost of those goods. Since cancelling keystone would have raised the price of gas by about 1%, the price of those raw materials would rise by about a third of a percent.
The sky isn't really falling.
> So when we
> use machinery to cut, process, and transport trees
> (for example), everything that literally 'fuels'
> these processes costs us double.
No, the costs don't double. They might, on average, increase by 1/3 of one percent.
Read the first sentence, or the first summary point, of your own source. It says "fiat money is government-issued currency. . . paper currencies. . ." Currency, azsteve, is not credit. If you understood that, you would have avoided a lot of confusion.
> Logic dictates that we use incentives to create
> record employment rates and do what we can to
> reverse the debt, like re-negotiating prices with
> our suppliers who in our case now just happens to
> hold most of our debt. And, reducing our per-unit
> energy costs. A raising tide (or a raising economy
> in this case) raises all ships.
That passage is garbled beyond sense.
Edited 3 time(s). Last edit at 04/30/2021 05:01PM by Lot's Wife.