Goldman Sachs chief economist touts big spending Democratic programs to front-load growth if Joe Biden wins the presidency and Democrats keep the House and take the Senate. How do Bernie Sander’s twice-crushed supporters feel about rewarding “millionaires and billionaires” on Wall Street by borrowing to the hilt against the future income of their children and grandchildren?
Background Resource:
Goldman’s Chief Economist Breaks Down Why a Biden-Led Blue Wave Would Prompt an Upgrade in Growth Forecasts
[Business Insider, October 5, 2020]
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Bill Whittle Network · Biden-Led Blue Wave to Boost Growth: Wall Street Economist Touts Big Government Spending
22 replies on “Biden-Led Blue Wave to Boost Growth: Wall Street Economist Touts Big Government Spending”
New Democrat plan: Declare the leaf legal tender.
Pres Trump has moved the head of the Fed into the Treasury Dept, or something like that.
I don’t have any claims to fame on understanding economics, but this has some yet unknown effect on the debt…
Recently bought a ‘ton’ (LOL, I wish!) of gold, real gold, not stored at my house, if anyone thinks they can rob me!
Goldman might like money spent willy nilly since they could make it increase their stock prices and thus their profits. It is far too likely these will be a bunch of shovel ready jobs that are never given shovels or just spread around and pay 15 people to buy a $1 part, making it cost $100.
Bill has already mentioned the broken windows falacy of the green jobs concept and with the idea Steve brought up of other ways the private sector is creating wealth, that wealth will likely never materialize with the increased costs of taxes, regulation and “sensitivity training” that will be mandated and the various meetings and sessions eating valuable design and testing time, not to mention the money.
Glad I listened all the way through before posting my comment. The guys seem to “get it”, as far as I can tell.
Scott @ 4:50: “become wealthier” — maybe they will be wealthier in dollar terms but not necessarily in net value standard of living terms, although their [wall streeters] std of living may not decline as much as the rest of us might see (if we are not correspondingly invested in inflation hedges ourselves).
I may have to rethink my 2019-2020 investment strategy to transition from “growth” to “wealth preservation” if they keep devaluing the currency. But I was expecting some great drop in the market after it has grown so high for so long = not realistic long term. I just don’t know exactly when this will occur (and stay down for a while).
Bill @ 5:30 : “money is a medium of exchange” but it is also a mechanism for “storing value”. That function is too often overlooked. So of course when Bill says “money is no longer money” he is saying money has been losing its value as more of it is created without anything to back it up.
Scott: “taking water from the deep end of the pool and pouring it into the shallow end” Great comment!! Great image!
I tried cocaine once, about 40 years ago. All it did was make me talk really fast. I thought, “What’s the fun in that?” and never tried it again.
Protect yourself, buy Bitcoin. If you don’t understand it, investigate it. It is better money in every way, the hardest money ever invented.
Better than gold?
I agree that digital currency has its strength in not being tied to anything tangible while simultaneously being limited in availability; however, it matters not what currency is the “best” if it is not accepted where one wishes to use it. Additionally, digital currency is valueless in a non-digital society — think about that if “being off the grid is ever necessary.”
I am not an “expert” on bit coin, although I gather it is structured to be much more resistant to counterfeiting than currency, and can be created independently of any sovereign government [so governments are going to resist it eventually]. Also, at some point someone will find a way to “crack” the safeguarding encryption, maybe using quantum computing or whatever. It is “hard” until it isn’t. As far as I can tell, the people “making money” in bit coin bought early and then sold for dollars, so are ahead in dollars, if not in real value.
I may be mistaken but right now I also understand that the amount of bit coin available (or that can ultimately be created) is constrained and thus will not grow with the world’s economic growth. Therefore its wider use would constrain growth or grow out of favor as a money. Or someone will come up with a scheme that allows “growth of the money supply” in sync with the economy, advancing beyond the current bit coin technology to something else?? The core appeal would be some form of money that stays in sync with the market’s expansion and contraction that governments do not control.
In the final analysis “money is an agreement”, typically a social agreement. As part of our consent to be governed we consent to let the government regulate its value (hopefully to keep it stable – something that has not been the case for 100 years — thank you Federal Reserve!*).
We could have money outside of government but it would be at even greater risk to being devalued than it is now . Banks could issue debt notes under their name and integrity, and that would work fine until their integrity was compromised or questioned (Enron? Madoff?). The use of commodity money, such as gold, is based on the concept that it is limited in its availability, being mined at approximately the rate of economic growth, and thus should also be stable in value.
But gold over history has been devalued via alloying and/or “coin shaving”. And people put up with this devaluation as long as they could absorb the lost value because of the marvelous social invention that money is as a medium of exchange. Even the economy of Great Britain in the 1700-1800’s did not end up being really gold based, but debt based. But their economy grew in concert with the debt so things looked (and were sort of) stable. Some people think using a basket of commodities (gold, silver, oil, aluminum, soy beans, wheat, or whatever) can be used as a stable source of value, but that still has the same issues as gold by itself.
Trust in the integrity of the money regulator is being pushed to the limit with this gargantuan growth in the money supply that has insufficient value being created to support it. As Bill said, when there is not enough money to fund the national debt or anything else useful from government, things will collapse. What happens then is anybody’s guess, but I sure would appreciate some scenarios being presented by “economists” or historians or political scientists or someone to help bring the eventuality into sharper focus. Maybe then people would wake up sooner than too later.
*The Federal Reserve now also has as part of its charter to support “full employment”, but I have never understood how the availability of money could generate innovation and entrepreneurial ideas, the real source for employment if/when there is a proper match between the skills and abilities of the labor force and what is required by the “free” market.
I agree that the Dems would be worse, but no one can deny Trump is the biggest spender ever.
And all of the Democratic Party didn’t support Harris. Who’s gonna be President if Biden wins.
Another point I’m surprised you didn’t make is that we’re not hypocrites for speaking up louder on the federal debt. America had a referendum on it back in 2012, and the majority told us deficit hawks to go (copulate) ourselves. We won ‘t be able to have an adult conversation on the topic until a lot of people start feeling pain
Even then, there will need to be time for the stupid ones to die off. Unfortunately, the birth rate of stupid out-paces death.
“The birth rate of stupid outpaces its death rate.” – David Pimentel
Adding to my quote collection. Hope you don’t mind the minor change.
I don’t mind the modification; thanks for the compliment. However, I do think that the birthrate of stupid outpaces the death rate of all — not just that of the stupid. It’s an asymptotic behavior that will inevitably lead to the stupid population outnumbering all others until a catastrophic reset occurs. I realize that this may be nihilistic, but the God (or Universe for those who do not ascribe to the same beliefs) often has a sadistic sense of humor, which I appreciate and share.
Ah. I didn’t think of it that way. But you make a good point.
That sadistic sense of humor also extends to those cases where even pretty intelligent PhD engineers, and many others as well, have been known (on occasion) to do or say or think stupid things.
Recall that Darwinian evolution says that if the population of stupid people is actually better adapted to the environment we may find ourselves in sometime in the not so distant future, then they will survive and have children while the not so stupid people may not*. That is not the way I would bet, but it is possible that scenario becomes REALITY – which as we know from Lionell – IS NOT OPTIONAL.
*Some people have suggested that the great loss of life among the more talented young men during WWI in Britain (and Europe?) led in turn to less capable and able attention to what followed, including their post WWII transition to the Labor Party, etc.
There is the engineering (I think) quote that engineers are trying to make better foolproof devices and the universe is making better fools… so far the universe is winning.
As to the Darwinian concept, I think that is flawed in that stupid people cannot win against reality. For a time, with the aid of smarter people, they can create compensations (like capitalists make the money that is taxed for welfare, so warning labels and liability laws can prop up stupid people improperly using things) eventually (according to your example) the smart people are out bred, reality will then come down without mercy on the stupid, but that might be what David meant by the “catastrophic correction” event.
I posit that stupid people have not adapted to a physical reality, but to a social situation. That only lasts as long as the civilization that creates it exists. Similar to housing prices rising faster than normal supply dictated, when the “free” cash ran out the whole construct evaporated and people that appeared to afford a house were hit by the reality that they could not. It may not be that smart people are out bred but realized that they have been taking for chumps and just start going along with the mooches and leaches, preparing for the time when they have to fall back on their stored resources (like the wise and and not the foolish grasshopper of the parable).
Exactly!
The common description of the theory of evolution, “survival of the fittest,” is factually incorrect. What actually happens is “survival of the survivors.”
Let’s say a squirrel is born that would otherwise be the most successful squirrel of all time. Suddenly a tree branch breaks and falls, crushing the squirrel to death. That little guy ain’t gonna reproduce and pass on his advantages, is he? He was the victim of essentially a random event that couldn’t have been adapted for. His unique combination of genes won’t appear ever again; only the “less fit” squirrels will go on. Doesn’t matter how fit you are if you don’t reproduce.
Same goes for humans. Let’s face it, stupid people are going to outnumber smart people forever. Always have, always will. But they survive. And they reproduce like rabbits.
What we think of as “better” men have carried the “worse” ones on their backs since the dawn of civilization. Are these people truly “better” and “worse?” Well, we all have “certain unalienable rights” that the constitution is designed to protect for everyone, smart or stupid. So the answer to that question is no, not legally or morally.
Doesn’t mean we have to like putting up with them. Doesn’t guarantee them success in life, either.
Stupidity is not inherited (ie, genes), it is taught (environment)…
Like all other traits, there is a genetic component to intelligence. That’s not to say it entirely determines how smart someone is, but it is known to exist.