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Author Topic:   The economy needs a 3% GDP growth to function well
LamarkNewAge
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Posts: 906
Joined: 12-22-2015


Message 16 of 21 (820985)
09-29-2017 6:08 PM
Reply to: Message 13 by LamarkNewAge
09-27-2017 6:22 PM


Correction. Fiscal Yeay 2018 is October 1 2017 to Sept 30 2018
That is the new fiscal year coming up and I described it as FY 2017 by mistake. It is FY 2018 that will see the Federal Reserve begin to reduce its $4.5 trillion balance sheet. The reductions will start at $10 billion per month (starting in December I think) and the amount liquidated will gradually rise to $50 a month in 12 months.

October 1 2018 till September 30 2019 will be FY 2019 (not FY 2018 as I stated above) and that will be the fiscal year where apparently $600 billion will be liquidated.

In addition to huge budget deficits of at least $700 billion, in these 2 years, there will be all this QE liquidation bond selling that will require investors.

Interest rates already have jumped quite a lot just this week alone. I didn't see the yield numbers for yesterday or today (have yet to read my Wall Street Journal for September 29 plus I don't know what happened today), but September 27 say a major increase in the treasury yield. (from like 2.0% up to about 2.3% in just 1 day)


This message is a reply to:
 Message 13 by LamarkNewAge, posted 09-27-2017 6:22 PM LamarkNewAge has not yet responded

    
RAZD
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Posts: 19077
From: the other end of the sidewalk
Joined: 03-14-2004
Member Rating: 2.6


Message 17 of 21 (821005)
09-30-2017 10:05 AM


Wealth -- what is it?
The problem with the current economic system is that it only measures "wealth" in monetary units:

To be "wealthy" in this system you must accumulate a lot of money and things valued in monetary units.

In my thinking this is a false paradigm. This is what causes Trump, the Koch brothers, Walmart and the republican party.

A person can be wealthy, in my opinion, if they are surrounded by a happy and supportive family (Asgara and Buz come to mind), and a person can have a wealth of knowledge. These things do not have a strict monetary value and so they are not included in the "economy" valuation.

What is wealth?

Bing dictionary brings up:

quote:
wealth
[welTH]
NOUN

an abundance of valuable possessions or money:
"he used his wealth to bribe officials"
synonyms: affluence prosperity riches means substance fortune money cash lucre capital treasure finance assets possessions resources funds property [more]

  • the state of being rich; material prosperity:
    "some people buy boats and cars to display their wealth"
  • plentiful supplies of a particular resource:
    "the country's mineral wealth"
  • a plentiful supply of a particular desirable thing:
    "the tables and maps contain a wealth of information"
    synonyms: abundance profusion mine store treasury bounty bonanza cornucopia myriad lot load heap mass mountain stack ton plenitude
  • archaic
    well-being; prosperity.

It is only when you get to archaic that you get to well-being ...

So to my thinking a country is wealthy that is concerned with and encourages the well-being of it's citizens, that has a wealth of knowledge to handle problems (like global climate change and renewable power generation), where the health and happiness of the citizens is a paramount concern.

That is not the current USofA ...

quote:
Gross National Happiness

Gross National Happiness (also known by the acronym : GNH) is a developing philosophy as well as an "index" which is used to measure the collective happiness in any specific nation.

The concept was first mentioned in the Constitution of Bhutan, which was enacted on 18 July, 2008.[1]

However, the term itself, 'Gross National Happiness', was previously coined in 1979 during an interview at Bombay airport when the then king of Bhutan, Jigme Singye Wangchuck, said "We do not believe in Gross National Product. Gross National Happiness is more important."[2]

GNH Implementation

The implementation of a GNH policy can be challenging as it requires considerable institutional support. In Bhutan, the implementation or mainstreaming of GNH into political institutions has been a gradual process for several decades but recently accelerated with the introduction of the GNH Index and the GNH Screening Tool.

As part of a lengthy and ongoing process of integrating the GNH philosophy into public policy, the GNH Index was developed by the Centre for Bhutan Studies (CBS) to help measure the progress of Bhutanese society. In 2010, the first nationwide GNH survey was conducted with a sample size of 8,510 Bhutanese aged 15 and above. The second nationwide survey was conducted in 2015 and had a sample size of 8,871. After all three rounds of surveys, follow-up interviews and additional data gathering was conducted in order to review and refine the survey. The GNH survey covers all twenty districts (Dzonkhag) and results are reported for varying demographic factors such as gender, age, abode, and occupation. The survey therefore provides a rich dataset to compare the happiness between different groups of citizens, and how this has changed over time.[12]


quote:
Lifestyle > Happiness net: Countries Compared

DEFINITION: This statistic is compiled from responses to the survey question: "Taking all things together, would you say you are: very happy, quite happy, not very happy, or not at all happy?". The "Happiness (net)" statistic was obtained via the following formula: the percentage of people who rated themselves as either "quite happy" or "very happy" minus the percentage of people who rated themselves as either "not very happy" or "not at all happy".

1Iceland 94%2005
2Sweden 91%2005
2Denmark 91%2005
2Netherlands 91%2005
5Australia 90%2005
6Ireland 89%2005
6Switzerland 89%2005
8Norway 88%2005
9Venezuela 87%2005
9United Kingdom 87%2005
11Belgium 86%2005
12Philippines 85%2005
13United States 84%2005
13France 84%2005
15Finland 83%2005
16Austria 81%2005
17Canada 75%2005
18Poland 74%2005
19Japan 72%2005
20Turkey 71%2005
21Bangladesh 70%2005
22Spain 68%2005
23Italy 64%2005
24Uruguay 60%2005
25Brazil 59%2005
25Argentina 59%2005
27Azerbaijan 56%2005
28Chile 52%2005
29China 49%2005
30Portugal 48%2005
30Mexico 48%2005
32Dominican Republic 47%2005
33Nigeria 46%2005
33Hungary 46%2005
35Ghana 43%2005
36India 40%2005
37Slovenia 32%2005
38Croatia 31%2005
39Georgia 27%2005
39Latvia 27%2005
41Estonia 26%2005
42Romania 23%2005
43Armenia 14%2005
44Lithuania 10%2005
45Slovakia 4%2005
46Russia 2%2005
47Ukraine -4%2005
48Belarus -8%2005
49Moldova -12%2005
50Bulgaria -24%2005
Group of 7 countries (G7) average 77.67%2005
NATO countries average 54.36%2005

Citation:
"Countries Compared by Lifestyle > Happiness net. International Statistics at NationMaster.com", World Values Survey 2005. Aggregates compiled by NationMaster. Retrieved from http://www.nationmaster.com/...stats/Lifestyle/Happiness-net


Now I imagine a few nations have changed position since 2005 (Venezuela for instance), but I can't help notice that countries with high degrees of social democratic policies -- such as universal health care and guaranteed minimum income -- rank at the top, and that the US ranks 12th (in 2005).

So I would contend that GNH is a better measure of "wealth" than GNP ... particularly as it is difficult to have too much happiness.

Enjoy

Edited by RAZD, : .


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Taq
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Posts: 7192
Joined: 03-06-2009
Member Rating: 3.1


(2)
Message 18 of 21 (821088)
10-02-2017 11:22 AM
Reply to: Message 15 by LamarkNewAge
09-29-2017 6:01 PM


Re: A Universal Basic Income.
LamarkNewAge writes:

The average income in the United States appears to be going toward $59,000 per person for 2017.

The statistical Naze in me can't help but point out that this is the median income which is different from the average or mean income.

The world average should be over $11,000 for 2017 but that depends on how much worse the dollar gets. (Purchasing power in the world will average over $17,000 per person in 2017).

A truly universal (that is worldwide) income right of $250 per month (PPP or purchasing power parity) might be in order if one wants faster economic growth and the (near)end of abject poverty.

I'm not an economic expert, but it seems like a bad idea to dump a lot of cash into an economy since it could create unmanageable inflation/deflation. It also reminds me of a story my grandfather used to tell about his time in the US Army during WW II. There were quite a few guys who liked to gamble and play poker. Within a few days of getting their paychecks a lot of those guys would be broke, but there were a few card sharks that would be flush with money, and it was usually the same guys each month. Just flooding the economy with money seems like a bad idea, but it might work if it is balanced by building infrastructure that would produce good paying jobs in the long term. Otherwise, all of that money moves into the pockets of barons or an economic oligarchy (think Russia) and stays there.

But I could be completely wrong. Again, I'm not an expert in economics.


This message is a reply to:
 Message 15 by LamarkNewAge, posted 09-29-2017 6:01 PM LamarkNewAge has responded

Replies to this message:
 Message 19 by LamarkNewAge, posted 10-06-2017 3:07 PM Taq has not yet responded

  
LamarkNewAge
Member
Posts: 906
Joined: 12-22-2015


Message 19 of 21 (821388)
10-06-2017 3:07 PM
Reply to: Message 18 by Taq
10-02-2017 11:22 AM


Re: A Universal Basic Income.
quote:

The statistical Naze in me can't help but point out that this is the median income which is different from the average or mean income.

I can't make to much fun of you because I managed to forget what you seem to have forgotten. I USED to know (the very basic fact) that the median income was a much lower dollar amount than the average income, but it seemed to slip my mind (remember the Brexit thread and PaulK challenging my knowledge on that issue?)

The median is about $18,000 per capita per year while the average is going to be about $59,000 per capita per year.

The median household income will be around $38,000 or something.

For some groups (especially Americans of Indian descent), the median household income is close to the average individual income amount. The Indian household median income situation was what got me confused (in the Brexit thread)between average and median (though I knew exactly what median meant, as you surely do, but I got the dollar amount all confused, and I used to know better LONG ago.

PaulK raised the issue of "well being" being better reflected by the median income level, and I stupidly said that the median was about the same as the average, and he called me on it. How I forgot that, I have no idea.

quote:

I'm not an economic expert, but it seems like a bad idea to dump a lot of cash into an economy since it could create unmanageable inflation/deflation. It also reminds me of a story my grandfather used to tell about his time in the US Army during WW II. There were quite a few guys who liked to gamble and play poker. Within a few days of getting their paychecks a lot of those guys would be broke, but there were a few card sharks that would be flush with money, and it was usually the same guys each month. Just flooding the economy with money seems like a bad idea, but it might work if it is balanced by building infrastructure that would produce good paying jobs in the long term. Otherwise, all of that money moves into the pockets of barons or an economic oligarchy (think Russia) and stays there.

But I could be completely wrong. Again, I'm not an expert in economics.


You seem to be responding to the QE temporary creation of money (to be removed later?)

It made mortgages cheaper and lower interest rates there enabled people to get good monthly payments.

But the wealthy were the biggest winners there.

Lower income folks are hurt by lower mortgage rates because it shoots up housing prices.

That was the mortgage backed security part of the $4.5 trillion in debt purchases.

As for the federal treasury bond purchasing part...

The national debt hasn't been too expensive to finance that's to the QE buying treasury bonds and keeping rates down.

But a massive ton of the debt purchasing was fairly short term maturity bonds, and they will need to be replaced my (much higher yielding) bonds sold to investors in time.

Edited by LamarkNewAge, : No reason given.


This message is a reply to:
 Message 18 by Taq, posted 10-02-2017 11:22 AM Taq has not yet responded

    
LamarkNewAge
Member
Posts: 906
Joined: 12-22-2015


Message 20 of 21 (821390)
10-06-2017 4:07 PM
Reply to: Message 14 by Taq
09-29-2017 5:33 PM


On the Indian issue.
quote:

What I have noticed is that humans need a job. When we don't have jobs and just sit around the results are pretty ugly. To use one example, there are indigenous tribes in Alaska that receive rather large incomes from mineral rights (i.e. oil money). Each person gets as much as $60k a year for nothing more than existing. What do these communities look like? Alcohol and drug abuse are rampant. Quality of life is piss poor. Education for kids is atrocious.

It seems to me that we humans derive our sense of worth from working. When that is taken away we tend towards destructive behaviors. So how do we supply people with work in a society without money and without a need for people making stuff?


American Indians are interesting.

There is a lot of interest in (generally fundamentalist) Christianity despite the well known past imposition. Indians are interested in a lot of issues and frankly, a societal resurgence (as if it ever surged in the past) in the liberal arts might attract lots of Indians.

Indians in the United States might not be the best examples if one expects to see what typical results will be.

I don't know.

I know that a number of working Indians do have issues with liquor, but most are deeply offended if "their people" are singled out as having worse vices with addiction than whites and blacks. They are very vocal on that note. (dunk Indians often shout out against whites and "their drugs"). Drunk and sober Indians alike dismiss their being singled out as any different.


This message is a reply to:
 Message 14 by Taq, posted 09-29-2017 5:33 PM Taq has responded

Replies to this message:
 Message 21 by Taq, posted 10-06-2017 6:02 PM LamarkNewAge has not yet responded

    
Taq
Member
Posts: 7192
Joined: 03-06-2009
Member Rating: 3.1


Message 21 of 21 (821399)
10-06-2017 6:02 PM
Reply to: Message 20 by LamarkNewAge
10-06-2017 4:07 PM


Re: On the Indian issue.
LamarkNewAge writes:

Indians in the United States might not be the best examples if one expects to see what typical results will be.

I know where you are coming from, but I don't think they are atypical, either. There is a strong correlation between unemployment and chronic drug use. One could argue which leads to which, but the correlation is there. From what I have seen, this is true across all races. If you look at the current opioid crisis it is really bad in W. Virginia where unemployment is high (i.e. coal miners out of work).

I know that a number of working Indians do have issues with liquor, but most are deeply offended if "their people" are singled out as having worse vices with addiction than whites and blacks. They are very vocal on that note. (dunk Indians often shout out against whites and "their drugs"). Drunk and sober Indians alike dismiss their being singled out as any different.

There is a genetic basis for alcohol tolerance and addiction (e.g. ADH isoforms), but those are tangential to the issues I am referring to.


This message is a reply to:
 Message 20 by LamarkNewAge, posted 10-06-2017 4:07 PM LamarkNewAge has not yet responded

  
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