https://nitter.net/EmilieSimons46/status/1521850521350516739?t=EBK5l9_wO0mmAUKtjzyV_A&s=19
Good god they're going to get slaughtered in the midterms if they don't actually do some sort of student debt relief.
going to get slaughtered in the midterms
:gui-better: :sicko-wholesome:
I think they'll get slaughtered anyways, but if they do some sort of anemic student debt relief, the slaughter will be used to argue against progressive policy. The one saving grace of the Democrats doing nothing is that they'll lose spectacularly and it'll be difficult for them to pretend that it's because they went too far to the left.
The one saving grace of the Democrats doing nothing is that they’ll lose spectacularly and it’ll be difficult for them to pretend that it’s because they went too far to the left.
no. no chance FDR2 gets branded as not far enough to the left. once again, lib establishment will take any good biden policies (uh, afghanistan, maybe debt relief) and blame his loss on those.
Maybe that's why the moratorium was stretched to the fall, after which they can spring a surprise and cancel X amount of debt, hoping that it will help stem the tide. Perhaps so that the closer it is to the midterms, the more it'll stay in the public's memory. Like that would be the absolute best case scenario with this band of DNC crooks, and even if it does go like that, it probably won't be enough. Inflation continues to do a number on the poor, and Jerome Powell is panicking
Biden is just a hybrid of GW Bush and Bill Clinton, its amazing.
wow, thank god. I was extremely anxious about [the federal deficit].
Pulling billions out of circulation to pay down the debt should be deflationary. That’s probably the thinking, get a control on inflation.
However this may exacerbate the economic slowdown and GDP loss, leading to recession.
General rule of thumb for national debt: Higher new debt means higher spending and growth, but also higher inflation. Lower new debt means lower spending and growth, but also lower inflation.
That’s the problem with “stagflation”, the buttons and knobs they usually push to fix either stagnation or inflation are opposing. Inflation you want to cool down the economy and lower bond rates. Stagnation you want to heat up the economy and raise lending rates. You can’t do both at once.
It perplexes economists because they run into a brick wall that their knobs can’t fix. What is really causing “stagflation” is the tendency for the rate of profit to fall. This is not fixable with knob-twiddling, but it’s the only thing capitalist managers have at their disposal.
I will add that capitalists do have a tool to fight stagflation/rate of profit falling.
War and the destruction of massive amounts of fixed capital.
Yep. Inflation, while bad for individuals with a bit of savings, is far worse for anyone with large amounts of liquid capital (banks, corporations).
High inflation benefits those in debt, by reducing the real PPP of their debt. Homeowners with mortgages are actually the biggest winners under hyperinflation. It damages those who give loans (again: banks, corporations).
But also, they don't care. Any kind of economic crash will be used to bail out the rich, making them richer and control even a larger % of the economy. The 2008 crash is a great example of that. The government only cares about the capitalists doing well, it will always overcorrect in favor of them, no matter what.
Paying down the national debt is not deflationary. If the government buys back issued bonds then the same amount of currency is in circulation. The feds control inflation by buying and selling treasury securities and the government isn't directing the feds to do that.
Here's what's really going on: Biden can't keep raising government spending because that will cause more inflation. Interest rates on bonds are so high because of inflation that the government can't keep paying them without causing more inflation to pay them off. Biden has to pay down debt now or we may see runaway inflation.
Sorry but that is also not deflationary. What you describe will slow the rate of inflation but not cause it to go negative. To be pedantic, deflation means that goods in the CPI are getting cheaper because the supply of money shrinks.
When someone says an action is “deflationary” in a hyper-inflationary environment they don’t necessarily mean the overall rate will go negative, just that the rate of inflation will decrease.
Just like if you are on a mountain top, the action of getting pushed off the summit is de-elevating, even if you haven’t dropped below the Earth’s surface.
In plain language, when someone says 'deflation' they are saying that goods are getting cheaper and existing debts are getting more expensive. The definition doesn't change if the economy is in a poor state, it always means the same thing.
The act is deflationary, that doesn’t mean it changes the entire economy to be deflationary
Inflation is described as a rate of change. For example, another rate of change is the speed in a car. If you are decelerating, you are bringing the speed of your car toward 0. If your acceleration is negative, you are going in reverse. They have two very different meanings.
So friction doesn’t slow down an accelerating car? You wouldn’t call friction a decelerating force? I think we are talking past each other here and you aren’t able to break this policy’s effect away from the general environment.
In a heavily deflationary environment, if a leader was to increase the money supply suddenly (but not enough for full inflation, just reduction of the deflation) - would you agree this leader’s policy was inflationary?
Why are you being so tedious about this? My general point was correct and everyone understood what I meant
That's just not right. If I'm traveling at a steady 100 kph and hit the brakes, my acceleration is negative. Acceleration is just the rate of change of velocity--the slope of line describing how my velocity changes over time. If I'm stopped, shift into reverse, and hit the gas then my acceleration is still positive because my velocity is increasing (just in the "negative direction" relative to where I started). If my velocity is increasing, my acceleration is positive. If my velocity is decreasing, my acceleration is negative. It doesn't matter what direction I'm going.
You're correct, the rate of change of speed is velocity and not acceleration.
I would assume Biden is talking about reducing new debts (lowering spending) in addition to paying back old debts (of which 33% are foreign held and won’t cause money to circulate in American markets)
I may be misunderstanding but I'm asking this question in good faith: I've seen a bunch about how companies are recording record profit. If that's the case, how is the rate of profit falling?
"Profit" and "the rate of profit" are, confusingly enough, not the same thing. The rate of profit can be easier to wrap one's head around by thinking of it as "the point of breaking even on an investment," that magical moment for capitalists when they've finally paid off the money they invested on a venture and are now receiving pure raw profit from. The easiest analogy is finally paying off the loan to build a factory using the profits from that factory; now every dime of profit you make is going straight into your pocket or towards some future venture to make even more profit.
When capitalism was still fairly young the rate of profit was pretty small because all the quick, easy forms of industrialization were still on the table and competition was minimal, so you could invest $1 million into a canned foods factory and pay it off in five years before building an economic empire off canned tomato sauce or whatever. The problem is as time goes on all these easy investments get taken and the room for competition vanishes; it's hard to imagine anyone revolutionizing canned foods in 2022 because there's a few major players that have dominated it for so long there's just no room to squeeze in, and any revolutionary advances in the industry would have to come off of ludicrous research and development costs (you can start to see where this is going). Likewise newer industries like tech and electronics have room for new players, but the cost of entry is exponentially higher. A new semiconductor factory costs something like a billion dollars to build and is obsolete within 5 years, and the existing players there have the CPU markets pretty locked down so the likelihood of a new player ever managing to break even let alone return profit for potential investors is nonexistent, so any fledging company trying to do so won't receive investment and dies in the cradle.
You can see a lot of this in major tech companies like Uber and even in larger conglomerates like Amazon, who have been running massive budget deficits for practically their entire existences while keeping investors happy with the potential of future profits coming off of aggressive reinvestment strategies. In all likelihood Uber in particular will end up collapsing when their grift finally falls apart as they've never been able to materialize profits no matter how scummy their business practices get. Paradoxically, this also means someone who is recording record profits can still be decades away from paying off the investments they made to get those profits to begin with, which extends the rate of profit.
This also pushes investors towards dumb speculative shit that might pay off sooner if it somehow pans out, which is why venture capital is so gung-ho about startups and their increasingly stupid ideas to revolutionize housing by putting rental properties on the blockchain or whatever. If you invest in 20 startups and one of them is a unicorn that becomes a billion-dollar idea, then you've made more money off your investments in the immediate short-term than if you built an actual factory or piece of infrastructure somewhere which would pay out more but over a period of time where you, the investment banker as an individual, would not get to cash out on and therefore don't give a fuck about.
tl;dr: Modern capitalist ventures require significantly higher up front costs to produce profits, and as time goes on this continues to get worse and worse. Since capitalism is fundamentally built on "I give you investment money, you give me profit as soon as possible" this pushes investors to start doing stupider and stupider shit like cryptocurrencies, NFTs, and high finance that's completely divorced from any productive venture, effectively building a mountain of worthless currency they can roll around in like Smaug while billions starve.
Thank you for the in depth explanation! This makes sense; it's like how all the easily accessible coal deposits have already been mined, so now we have to go for the subbituminous coal, or more difficult coal to reach. As a result it requires more money to make money, so even if profits are high, the barrier to entry is also much higher.
Just replying to save this. Thanks for the breakdown comrade :fidel-salute:
I would also like to know. In fact I just requested in the megathread recommendations for a primer explaining some of the stuff being discussed in this thread.
pay no attention to the $109B March trade deficit.
largest in US history btw
who the fuck cares I run out of money to eat after the about the 25th of every month
if you ain't fixing that I ain't listening
The only function of a democrat is it repair all the damage Republicans do when they get in and gut the entire county, it's the same disco that has been happening since Clinton.
I mean what other move do they got? Help people? And what, do work and piss off your donor base? It’s pretty clear to everyone with half a brain cell that power only listens to money in :amerikkka:. It’s why these parties love the culture war bullshit because it distracts idiots while they are robbing us. Even as Biden is giving the Republicans everything they want, he’s still sinking lower than ever.
I mean I don't disagree. I'm pretty doomer pilled at this point a leftist movement can only exist with the destruction of the obstructionist democratic party.
