American Economics Thread

[vincent]

Based upon my understanding of Modern Monetary Theory (MMT), it's proponents argue that when done correctly, the overabundance in supply will tap into suppressed demand and the insatiable foreign demand for the USD ensure any price instability will be transitory, especially when the excess USD is invested into technology and infrastructure to boost productivity and causes deflation.

I disagree with MMT’s “if you build it, they will come” mentality because it will only work if productivity continues to rise to act as a counterbalance to the increase of supply which is not guaranteed. In reality, productivity growth is hard to achieve as US productivity growth has been on the decline since the mid-2000s and staying below 2.5% since the 1970s.

Moreover, the US having reserve currency status means very little because the USD is no longer on the Gold Standard and most major currencies are no longer pegged to the USD. Global Reserve status simply means that other countries accept and hold the USD more than other currency which makes it less volatile and risky. However, the very reason why other countries hold onto USDs is because of the presumption of it being is a safe haven from risk and volatility. Therefore, it is foolish to expect that foreign demand to persist when the currency’s value is being quickly depreciated by money printing. Any stimulus provided by MMT will be temporary as easy credit will be quickly priced into the market and will require more and more to achieve the intended affected while causing massive psychological damage to the USD’s creditability.

Foreign central banks aren’t the ones buying the new T-bills

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[hashtagpls]

Foreign central banks aren’t the ones buying the new T-bills

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So China really has stopped purchasing US Treasuries?
No wonder the US needs to go to war now; they're 6 months away from civil revolt and Revolution.

 

[In4ser]

Yeah, foreign demand for government bonds is the lowest since 1995 (can't remember where I read that though). Meanwhile, the government keeps giving unemployment checks. My friend is getting in $515 + $300 extra (from the Federal Pandemic Unemployment Compensation) a week in government checks. I actually feel pathetic because he's made more money last year because of the extra $600 in unemployment in 2020 than I am working full time and I'm making 50% more than the median income in Texas for individuals.

 

[broadsword]

Yeah foreign demand is the lowest since 1995. Meanwhile, the government keeps giving unemployment checks, my White friend is raking in $515 + $300 extra (from the Federal Pandemic Unemployment Compensation) a week in government checks. I actually feel pathetic because he's making more money in employment than I am working full time.

Isn't $515 + $300 a generous amount? Looks a lot.

 

[voyager1]

Yeah foreign demand is the lowest since 1995. Meanwhile, the government keeps giving unemployment checks, my White friend is raking in $515 + $300 extra (from the Federal Pandemic Unemployment Compensation) a week in government checks. I actually feel pathetic because he's making more money in employment than I am working full time.

Lmao thats actually demoralising

Can you imagine losing 8 hrs (minimum) every day working and getting less money than someone who is all day home and enjoying life.

Yep, no way I would accept that. Time is valuable

 

[In4ser]

Isn't $515 + $300 a generous amount? Looks a lot.

Yes, and Biden wants to spend more $$$ not only on infrastructure but more social welfare programs. Not that the US doesn't need to help its poor but this is retarded. Rentier Capitalism for the rich and Social Welfare for the Poor while the Middle Class gets fucked.

 

[hashtagpls]

Yeah, foreign demand for government bonds is the lowest since 1995 (can't remember where I read that though). Meanwhile, the government keeps giving unemployment checks. My friend is getting in $515 + $300 extra (from the Federal Pandemic Unemployment Compensation) a week in government checks. I actually feel pathetic because he's made more money last year because of the extra $600 in unemployment in 2020 than I am working full time and I'm making 50% more than the median income in Texas for individuals.

Holy shit; so this is, as they say, It.

What does that mean for the US moving forward? How's it going to affect other nations like Australia whose economy is so tied with the US? Will inflation be the same in australia as it is in the US?

 

[voyager1]

Holy shit; so this is, as they say, It.

What does that mean for the US moving forward? How's it going to affect other nations like Australia whose economy is so tied with the US? Will inflation be the same in australia as it is in the US?

Its like what happens to investors who invested their money on the wrong company and it declares bankruptcy, something similar

You lose your money

 

[emblem21]

Lmao thats actually demoralising

Can you imagine losing 8 hrs (minimum) every day working and getting less money than someone who is all day home and enjoying life.

Yep, no way I would accept that. Time is valuable

This madness cannot last forever, there will come a time when the stock market crashed and the printing press fail to function and soon after the dollar loses all value. I wonder if they have a backup plan because ‘fuck China’ isn’t going to save a person from starvation or lack of resources when no one accepts the US dollar as tender. They would have to use up all there gold reserves (if they have any that is) just to last a little bit longer but really, do they have anything prepared for a crisis because considering what happened recently with the pipeline crisis, it won’t take much to make things a lot worse then They are now.

 

[broadsword]

Yes, and Biden wants to spend more $$$ not only on infrastructure but more social welfare programs. Not that the US doesn't need to help its poor but this is retarded. Rentier Capitalism for the rich and Social Welfare for the Poor while the Middle Class gets fucked.

So that is why the American people do not want to go back to work, I suppose.