Open Thread: "The Paradox of Thrift"
I just ran across this idiotic statement in an MSM news piece:
WASHINGTON – Americans are hunkering down and saving more. For a recession-battered economy, it couldn't be happening at a worse time. Economists call it the "paradox of thrift." What's good for individuals — spending less, saving more — is bad for the economy when everyone does it...The downward spiral has hammered the retail and manufacturing industries. For years, stores enjoyed boom times as shoppers splurged on TVs, fancy kitchen decor and clothes.
I wouldn't call this a "paradox" but a fallacy. What do they think we are, a bunch of consumers? (see definitions 1-3, and especially 4)
And this is what passes for "news" in our society. Comments, please. Are you saving more? Do you feel unpatriotic as a result? What does the MSM not get by falsely calling this a "paradox?"
It's more like this:
Activities can be:
1) Bad for the economy, bad for people (earthquake).
2) Good for the economy, bad for people (unemployed go dig 'n fill holes).
3) Bad for the economy, good for people (everybody party this week).
4) Good for the economy, good for people (new profitable enterprise starting).
Usually governments only think in terms of what's good for the economy. You hardly ever hear any politician talk about the happiness of people. So it is no wonder Washington is often more burden then anything else! And stimulus packages usually don't mean starting profitable enterprises, for that no one needs it.
My answers -
A 1
Why should I save more when my money is to be inflated? Do I not punish myself for living and investing on depreciating money I earned in the past when all around are living and investing on money borrowed from Asia?
A 2
Well, if our politicians and MSM are Keyensians, should I feel unpatriotic if they define patriotism like Hamilton, rather than Jefferson would?
A 3
The MSM does not get Austrian Economics!
Economics is like a race between a bulldozer and a Motorcycle on a rough, dark road of time. Catastrophy and technologic advances are rough and smooth sections.
The bulldozer is the Austrian school. People only have money they've saved to invest and loan. Therefore, they value it highly and corruption means someone pays directly. The bulldozer is going to go through many rough times fine, but won't zoom down smooth stretches.
The motorcycle is the Keyensian and Chicago schools. They conjure money out of thin air to load and invest. If the bankers are thrifty and honest, and no disasters stress the economy, the economy zooms. Especially when technology enables advance and money to retool is needed, or raw human capital (like developing China) is waiting to be harvested.
But if the corrupt bankers loan money for casinos, and loan money to gamblers running from one town to the next, and rough times stress the system, their bubbles pop. Then when people lose faith, its a very long time, generations, before more young and naive people will trust the system with their money.
Another problem is, you never know when the market has been fully saturated, the commodity bubble inflated to its limit. Since Austrians move slow, on saved money, they don't go pop. Keyensians pop, because the money they lose doesn't exist - its debt. And someone's going to pay. The people with the money first (government, FED and bankers) pay least, and the taxpayer that gets the new inflated currency last, the most.
Spending and debt
I never bought into the idea of debt based financing. Spending that comes from savings is OK. The powers that be want you to use your credit card, home equity credit line and lease your new car. Paradox of thrift means you won't be a debt slave; the paradox for bankers is that they can't earn interest on people who are debt free. Our whole fake money system is based off of debt: no debt=no money. If you save gold you are saving real money, free from debt. The money we use now is not worth saving, which is why most people have very little in way of savings.
The world won't stop if you slow down your spending. Do what is right for you and your family. Don't be a slave to your possessions. Don't listen to the MSM. A country of debt slaves can only build wealth for the bankers and elites at the top of the food chain.
More Keynesian destructo-nomic nonsense....and still being
taught in our universities.
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"An economy built on fiat money is a society on its way to ashes."
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"An economy built on fiat money is a society on its way to ashes."
World-wide Workless Week
Stop the gears completely... Bring the entire thing to its knees.
Who are the people keeping Verizon and AT&T funded?
It cost me 600 dollars to get out of my cell phone contracts, but I'll be damned if I'm going to fund criminals who violate the law and my privacy by selling me out and abetting the Government in wiretapping my calls.
Yes, they were tapping your phone also.
Keynes said "In the long run we're all dead." ...
... in order to defuse criticism of the long-term consequences of his short-term perscriptions.
But Keynes was childless. Those of us with children - or nieces and nephews - or who place some other value on the rest of humanity and/or its gene pool - may have some stake in the future beyond our own lives.
Live high on the hog (off the work of others) and try to die with your credit cards maxed out? Let the children of others suffer to pay off your debts and for lack of the stuff you used up? Maybe Keynes (and the psychopaths running the show) think it's a fine idea. But responsible adults don't.
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"Obama’s Economists: ‘Stimulus’ Has Cost $278,000 per Job."
That means: For each job "created or saved" about five were destroyed.
Ponzi Scheme
The "Paradox of Thrift" will also bring down a Ponzi Scheme. As long as everybody think it's ok and keeps pumping money into it, it works fine, and nobody gets hurt. But the second someone starts to question it and pull their money, the whole system collapses. So if savings and thrift weaken our economy, that tells you everything you need to know about the fundamentals of the whole thing.
5% of people make things happen
10% of people watch things happen
85% say "What happened?"
Or when it runs out of
Or when it runs out of recruits...
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"Obama’s Economists: ‘Stimulus’ Has Cost $278,000 per Job."
That means: For each job "created or saved" about five were destroyed.
That is why I wrote back in February ...
that it is a two part process and it must be done in the correct order.
1. Get people to choose to exist.
2. Then get them to choose freedom.
Do not think that you have to change the world and don't think that you must rush.
Do your part. That is all that matters.
It will happen.
You know what to do.
WAHOR!!
http://www.dailypaul.com/node/48994
WAHOR!!
http://www.dailypaul.com/node/48994
A Japanese movie, called, "A Taxing Women."
Where this old dieing Japanese *Yakuza mobster who evaded taxes and was explaining with a metaphor how he became wealthy to a female tax agent. ... a glass of water not full, and he was thirsty, but he would not drink...even when it became full, he would wait until water trickled over the rim and then carefully lick the water with his tongue. http://www.amazon.com/Taxing-Woman-Nobuko-Miyamoto/dp/B000X1...
However, make no mistake in thinking that "A Taxing Woman" is a G-Rated feel good film. In true Japanese style, Itami has no fear of sex or toilet humor, and plenty of both are on display here. The darker sides of life are not dumbed down, and the Yakuza are nasty people. But, stronger than their nastiness is Nobuko's goodness, and that is the message on display.
I tell my grandchildren about the glass and the water analogy as how I save, and for them to do the same. BTW, always pay your taxes !
* As of 2005, there are some 86,300 known Yakuza members. They are usually heavily tattooed, and may have missing pinkies.
Oh yes, always 'pay your taxes'
be a good slave, and make sure to pay your masters for the cost of your enslavement.
You bet your ass !
I prefer being a slave out of jail rather than in.
You don't pay your taxes ?
paradox of STUPID
A single person saying misinformed things is clearly self-evident.
If enough people harbor the same ill-conceived thoughts, the momentous nature of the error is lost on the public.
The Paradox of Spending
Bill King ( The King Report ) said:
“The Paradox of Thrift (or saving) is a reductio ad absurdum by John Maynard Keynes that avers that if everyone saves, aggregate demand will decline, and this will imperil the economy. We'd like to contribute the ‘Paradox of Spending' to Econ 101. This maxim holds that if everyone spends, there are no savings; debt surges and the implosion of that debt collapses an economy.”
-- from The Paradox of Savings and Spending Competing with Socialism 2009 by Prieur du Plessis (2/1/09)
http://www.marketoracle.co.uk/Article8609.html
I remember how many times I
I remember how many times I saw Bush say "its for the economy" in '05 when we were dealing with NAFTA. Everything was always about the economy.
"Do not give into evil, but proceed ever more boldly against it.
Do not give into evil, but proceed ever more boldly against it.
The root of all commercial evil
is the devaluing of our money. Once upon a time most of us were PRODUCERS. We farmed, ranched, mined, timbered, fished, crafted and what have you. Over the years the corporations seized these centers of production and reduced us to being mere consumers. The corporations need us to consume what they produce. They also require that we NOT produce in competition with them. So now we are seeing what happens when over-grown kazillion dollar international corporations become so over scale they cannot legitimately support themselves by ordinary production. This is compounded by inflation which requires that every consumer (corporations are consumers too) needs more and more dollar units every day just to stay even. As the dollar unit devalues more and more are needed but are not readily available by usual means. So people begin to lie to get, steal, bribe, connive and every sort of sordid behavior. We had none of this when our dollar had value.
So true. Do not give into
So true.
Do not give into evil, but proceed ever more boldly against it.
Do not give into evil, but proceed ever more boldly against it.
No "paradox" here, just common sense.
Inflation discourages savings while it encourages spending.
But there is a limit to how much people will or can borrow.
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Natural Law and Natural Rights
http://jim.com/rights.html
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"Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive."
This argument drives me crazy...
How long did the MSM shout about Americans having no savings and massive credit card debt. Now they're yelling about people (gasp) saving money and even attempting to (gasp) live within their means.
It's insanity - as if people could really "stop" spending money anyway. Food prices, car repairs, housing, basic necessities, medical care, etc. are all going up and there isn't a thing you or I can do about it but pass the money on down the line.
The real "problem" is that (some) people are using a bit of common sense and realizing that maybe, just maybe, they shouldn't buy luxuries that they don't need without first having the money in hand to actually pay for them. I think twice about buying anything I don't truly need and I reject the notion that the purpose of my existence is to "be a good consumer" and "keep the economy going".
Send, spend, spend...charge up those credit cards! No savings, no "emergency fund" so you don't lose your house one month after you lose your job, no problem! Don't worry, Big Government will save you yet...
This statement is from
This statement is from Keynes theory. Keynes could not understand why people would save money. Go figure.
www.twatm.com
Keynes never worked a day in his life.
He was an ivory-tower academic, who'd never faced any kind of hardship. His father was an economics professor at Cambridge, too.
-jcr
"The problem with trying to child-proof the world, is that it makes people neglect the far more important task of world-proofing the child." -- Hugh Daniel
Keynes
that guy is lucky to no longer be with us on this planet otherwise a lot of angry broke suffering folks would be after his a**.
(Better) to be confused in the search for truth than fully confident and sound asleep in a dream of lies. ~ Michael Nystrom
http://www.votenader.org/blog/2008/09/10/statement-to-ron-pa...
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"How can we justify to the unemployed and underemployed in the United States the incredible cost of maintaining a global empire?" - Dr. Ron Paul
I was taught that
no spending made the great depression worse, and apparently that is what these guys were taught too.
I think we need a few links to some of the alternate reasons why the great depression was so bad so that we can point them out when this kind of fluff is thrown in our faces next, by the neighbor next door, or the guy at work, ect...
Great Myths of the Great Depression
Great Myths of the Great Depression by Lawrence Reed: http://www.mackinac.org/article.aspx?ID=4013
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The Fed is not a private bank. PRIVATIZE THE FED!!!
"The Federal Reserve Banks should simply be regarded as governmental agencies." -Murray Rothbard
"I now call the Federal Reserve the fourth branch of government." -Ron Paul
patriots save money so they can buy
guns ammo canned foods and precious metals.
(Better) to be confused in the search for truth than fully confident and sound asleep in a dream of lies. ~ Michael Nystrom
http://www.votenader.org/blog/2008/09/10/statement-to-ron-pa...
http://www.flickr.com/photos/57925480@N00/2660779139
Website:
http://www.libertypoet.com/
Twitter:
http://twitter.com/LibertyPoet
"How can we justify to the unemployed and underemployed in the United States the incredible cost of maintaining a global empire?" - Dr. Ron Paul
More blame for the American public.....
This whole transfer of wealth will be blamed on the middle class. The very people they are ripping off.
I am all for saving more and spending less, especially if you can't afford it. It used to be unfashionable to be in debt.
Attention needs to be focused on the bankers,barons, and politicians responsible, and even the media that perpetuates the lie.
MAKE A LIST!!!!
★★★★★★
"Life's tough......It's even tougher if you're stupid."
-John Wayne
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The statement was on cnn
The statement was on cnn earlier,almost verbatim. "paradox of thrift" look for this quote to spread.
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The government throws the people bones while keeping the treasures of this country.
"A government of reason is better than one of force." --Thomas Jefferson to Richard Rush, 1820
I can't afford to save..it's hard enough to keep up with all...
my bills. I was unemployed for 4 months and now am working but only part-time and am still looking for another part-time job to stay a float. I can't afford to be "a patriot" and spend money either.
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"Whether you listen to the left side of congress' mouth or the rightside, either way it's the same mouth"
A man who has hate in his heart is not a free man
Have you noticed the bank/credit card fees lately?
I am cancelling all my credit cards and moving all my debt and banking to credit unions... F**k the system!
"All great truths begin as blasphemies."
"Human beings with love and compassion are some of the most beautiful creatures in the universe... Those without are a plague on us all."