Peter Schiff: How gov't stimulus spending & deficits impact capital markets (Part 2)

[christo930]

I wish people would understand that one of the reasons the budget deficit grew by so much under Obama is that Obama put the wars on the budget. George Bush paid for the wars with borrowed money, but it was "off budget', meaning that it didn't show up in the yearly budget deficit, but Obama actually put the wars on the budget so over 500 billion dollars of the new budget deficit is just being more honest about how much money we are spending.

[heckler73]

It's too bad Pete doesn't understand how money works, ideally.

Banks are responsible for the mgmt of the endogenous supply of money, which allows the private sector to leverage capital investment (for production in the future).

Gov't manages the Exogenous supply which makes up for lack of AD when the endogenous side experiences "market failure", in order to prevent debt-deflation spirals (and vice-versa in boom cycles).

Sadly, he never changes his tune despite being regularly shown his errors.

[serialkiller1990]

@heckler73

Are you high?

Yeah. Sadly the man who predicted the crisis does not change his tune. And people who said its great, and after their policies failed they just say its would be worse, they did not spend enough. He understands it but he thinks its bull. The recent experiences seem to confirm that. Kaynesians are terrified by deflation. The whole XIX century in the US was one big deflation, and it became the most prosperous country in the world.

[heckler73]

@serialkiller1990

I would suggest you read Irving Fisher's "The Debt-Deflation Theory of Great Depressions" (1933) for some insight on the matter. (It's only 21 pages, & I believe the St. Louis Fed has a copy of it online... just Google it)

And no, I am not high. Perhaps you are if you believe Pete's claptrap.

[twk373]

@heckler73

What excuse can you possibly have for not understanding and agreeing with Schiff?

"Depression" is just an aggregate term for the market liquidating an overabundance of capital projects for which there are insufficient resources. This in turn is caused by governments and central banks artificially stimulating long term capital production by fucking up interest rates.

[twk373]

@heckler73

And what is "market failure," you clueless quack?

Why should anyone care about the "cures" of a self-styled doctor who believes that disease is magic? Doubtlessly you're a member of the Church of Scientology, which is where all Keynesians belong.