Dramatic Takedown of U.S. Jobs

[chuckChuck]

Good business managers always look at ways to keep their costs down.

[fjlip]

Good business managers always look at ways to keep their costs down.

Apparently not those the GREEN RESET/Solar/wind. Therefore crappy managers wasting our $$

[Austrian Economics]

"So... what would have happened to the US economy if the Feds hadn't used fiscal stimulus to keep the economy rolling during the the largest economic shock in 90 years?"

The unprecedented levels of borrowing only serve to hide the true cost of dealing with the pandemic. It does not eliminate the day of reckoning, but merely postpones it.

If the government wanted to make the cost of dealing with the pandemic immediately obvious, it would have diverted existing program spending to covid efforts by downsizing peripheral government departments and/or raising taxes. That would have been unpopular however, so they took the politically easier route of massive borrowing. Since borrowing temporarily hides real costs, most people unfortunately believe that dealing with covid is practically free and doesn't require any difficult choices. People think they can have their cake and eat it too.

[chuckChuck]

Sounds like many big farms!

One thing that the US government learned during the great depression and the great recession is that dramatically cutting government spending during a depression leads to a bigger depression and great damage that is worse than the effects of stimulus and printing money.

[shtferbrains]

"So... what would have happened to the US economy if the Feds hadn't used fiscal stimulus to keep the economy rolling during the the largest economic shock in 90 years?"

The unprecedented levels of borrowing only serve to hide the true cost of dealing with the pandemic. It does not eliminate the day of reckoning, but merely postpones it.

If the government wanted to make the cost of dealing with the pandemic immediately obvious, it would have diverted existing program spending to covid efforts by downsizing peripheral government departments and/or raising taxes. That would have been unpopular however, so they took the politically easier route of massive borrowing. Since borrowing temporarily hides real costs, most people unfortunately believe that dealing with covid is practically free and doesn't require any difficult choices. People think they can have their cake and eat it too.

Who is the lender?

[GALAXIE500]

You guys are all so pessimistic! Grain prices haven't been this high in many years. Rejoice, the end of the world is far away unless you are getting old and cranky! LOL

Chuck , I don't know you from a hole in the ground but I have to say you really don't get it do you ? 9$ a bushel is great if you had 1980's expenses on your damn balance sheet ! Did you retain that ?

[VK58]

Who is the lender?

Maybe the better Question is who/what is the collateral used by the lender ?

[Guest]

Chuck , I don't know you from a hole in the ground but I have to say you really don't get it do you ? 9$ a bushel is great if you had 1980's expenses on your damn balance sheet ! Did you retain that ?

but illustrates the depth of the problem we are dealing with !

[Grahamp]

They could have let a few firms fail in 87 and the recovery would have been 3 months,

Could have not bailed out Mexico in 94 and the recovery would have been 6 months.

Let LTCM fail in 1998 without strongarming Wall Street firms to bail them out and we would have had a 1 year recovery.

Let firms go broke in 2008 and we probably have a 2-3 year recovery.

Now in 2020, because we wouldn’t endure 3 months difficulty in 87, and we are looking at possibly an unrecoverable situation.

I am generally a very positive person, pessimism seldom pays. The negative, hard money people have been sounding this alarm since we went off the gold standard and I usually ignore them but I worry they might be right this time. I have always thought you can get away with very irresponsible monetary policies as long as the population is productive. You can probably build an indicator that measures the percentage of university students who have majors that end in “studies.” Gender studies, womens studies , religious studies etc. Once that percentage gets too high, then the monetary irresponsibility becomes a death spiral because too high a percentage of the population is useless. I fear we are there now.

[blackpowder]

Sounds like many big farms!

One thing that the US government learned during the great depression and the great recession is that dramatically cutting government spending during a depression leads to a bigger depression and great damage that is worse than the effects of stimulus and printing money.

You're right. And starting in the Depression they built many things.
Built a lot of infrastructure, built many industries. Developed abundant cheap power. Hoover Dam essentially why aero industry all west coast.
Currently we don't seem able to build anything. Green or otherwise.
If you want a guaranteed standard of living for all, at least for a while, you will need to provide free energy.
Until Gene Roddenberry writes the rules of nature, we will need to build all the nuclear and hydro we can. And be able to tax something that produces money. Those last two words key.

[Austrian Economics]

Who is the lender?

Mostly the central bank. One arm of the government is loaning money to the other arm. It's no different than taking cash out of your cookie jar and replacing it with a slip of paper marked IOU. When the cash is all gone, would anyone expect to be taken seriously if they pointed to the cookie jar full of IOUs and shouted, "Look at all my assets! I'm rich!"

[Austrian Economics]

Sounds like many big farms!

One thing that the US government learned during the great depression and the great recession is that dramatically cutting government spending during a depression leads to a bigger depression and great damage that is worse than the effects of stimulus and printing money.

Contrary to popular belief, the Great Depression did not end until 1947, when all the wartime price and production controls were finally lifted. Government spending was cut by 60% and millions of government employees were fired. Freed from the shackles of big government, the economy boomed.

Just look at a chart of interest rates in that period. All through the 30s and 40s interest rates sat near zero, primarily due to lack of business demand for capital. In 1947, they started to trend up as the profitability of the marginal business finally got above the rate of interest.

[Austrian Economics]

They could have let a few firms fail in 87 and the recovery would have been 3 months,

Could have not bailed out Mexico in 94 and the recovery would have been 6 months.

Let LTCM fail in 1998 without strongarming Wall Street firms to bail them out and we would have had a 1 year recovery.

Let firms go broke in 2008 and we probably have a 2-3 year recovery.

Now in 2020, because we wouldn’t endure 3 months difficulty in 87, and we are looking at possibly an unrecoverable situation.

I am generally a very positive person, pessimism seldom pays. The negative, hard money people have been sounding this alarm since we went off the gold standard and I usually ignore them but I worry they might be right this time. I have always thought you can get away with very irresponsible monetary policies as long as the population is productive. You can probably build an indicator that measures the percentage of university students who have majors that end in “studies.” Gender studies, womens studies , religious studies etc. Once that percentage gets too high, then the monetary irresponsibility becomes a death spiral because too high a percentage of the population is useless. I fear we are there now.

It's not a good sign that the only way we can "revive" the economy is with interest rates effectively at zero. Zero percent interest signals capital that self-replicates, which is clearly impossible.

[AlbertaFarmer5]

You guys are all so pessimistic! Grain prices haven't been this high in many years. Rejoice, the end of the world is far away unless you are getting old and cranky! LOL

I think I understand why Chuck is so optimistic about agriculture.

I just checked the NFU website, and apparently there is nothing wrong in ag in Canada, considering that their top priorities appear to be:

Open Pit coal mines
Opposition to hydro electricity in northern BC
Protests by Indian farmers about the end of their equivalent of the CWB
Fertilizer emmissions, but they seem to be against farmers best interests in this one
Climate Change, but again, they seem to be against farmers best interests
Opposition to hydro electricity in northern BC again
Protests by Indian farmers about the end of their equivalent of the CWB again
Still compaining about the demise of the CWB almost a decade later.
The name of Seeds Canada
Solidarity with the fight agains "the virus of capitalism and patriarchy"
Native fishermen's right to fish on the east coast
Gender and racism
Gender and racism again.
The need for childcare and pharmacare

So after reviewing this list, Chuck can be excused for thinking things must be pretty good down on the farm( and they are, especially post CWB)

[sumdumguy]

It’s very confusing for lefties. Our most left-wing friend in Vancouver is perplexed because now indian chiefs (especially American chiefs) are crying because the pipeline is cancelled. Our friend says that during negotiations, no native bands wanted the pipeline - now that it is turfed, they will lose millions.