The United States Economic Design

[Original Poster]

So I don't know as much as I'd like about the united States economy and it's big part of what I feel motivates our country to do a lot of what it does. I'll describe what I know our system is designed like as well as what it leaves me to believe in hopes that those in favor of the United States foreign policy can convince me it's the right one. As a note to Universal Mind, I hold nothing against you and actually really like debating with you because you're beliefs show that you aren't just going in line with Republican policy, as I feel most do because of the slant of the media which doesn't give people the information they need to make rational decisions (I mean, if people knew what was going on, they wouldn't all think Iran is the biggest threat to our nation, for instance). I'm sure you feel the same way about the democrat base and any cheapshots I give are in the spirit of the argument but not personally held against you. Okay, so this is what I think about our economy. Watch the 3rd part of Zeitgeist for a better explanation of this, but in the short run since the 1920s our gold standard, which had the guarantee of being replaced by its value in gold at any time, was replaced by bills carrying only the value our government placed on them. In order to give these bills value, all money was borrowed from international banker that had the right to print such money, as it was needed. When the government does so, bviously, it lowers our value of the dollar (as it has considerably since the Iraq war). Not only that, but the money is borrowed at interest. That means we are supposed to pay the federal reserve back every penny we borrow, and then some. So what's so bad about that? We borrowed enough money from China to make them the next world super power, surely international bankers are better. The bottom line is, people that want to make money are choosing our policy for us. This was put in place by FDR; Nixon put in place HMOs which blatantly turn patients into products; Clinton installed NAFTA which basically allows American corporations to move their factories to Mexico and take advantage of the low minimum wage and Reagan put in place the World Trade Organization which allows owners of different companies to decide world policy on trade. This issue is bipartisan, as in both parties are trying to screw us over. WTO is a huge promoter of Globalization. But localized economy is necessary for supply and demand to not come off balance. Look at what happened to the Soviet Union. After Kruschev was kicked out and technocrats started expanding their economy and industrializing everything their economic policy was unyielding and would not allow companies to cope with problems. Focus was put so much on expansion rather than care many parts were faulty. The managers were forced to take the blow which created contempt for the industries. As a consequence money made by innovation ended up in higher wages or, more frequently, lowered prices for the customers and the industries would not benefit. What would happen to us with Globalization is the reverse. The money is coming from other countries and going mostly to the industries, and only benefits prices in countries with the stores in them. So the end result is that we can buy stuff with money we can't earn. As our economy plummets, the wages that are here may just have to plummet as well to ensure we all become slaves to the corporations as well. For evidence on how that works, read Noam Chompsky's "Hegemony or Survival." The reason is because Politicians do not screwed over by their own decisions. They get bribed so much they never have to worry about anything again after they hand our country over, piece by piece, to businesses. Can you really argue that our politicians are really stupid enough to pay 70 dollars a hammer for the military? No, they just know if they benefit the war industries they'll get paid for it, and it's not like their spending their own money, their spending ours. When we go across seas or into South America and start wars we get to set our companies up to "rebuild." That's all the spreading of our so called democracy really is.

[juroara]

all I know is, the WTO is the most wicked thing on earth!!!

[Alric]

Its much farther than just taking bribes or anything. How do you think they get elected? They promise all kinds of stuff to people. They all have their own goals and things they want to get done, but how do you think they pay for them? We can't affored to pay for all the projects the government wants to do, so they just borrow the money to help pay for them. This works out for everyone. The federal reserve gets paid the intrest from the money they loan to the US. Money which they print themself. And to sweeten the deal the government passes a law saying everyone must accept their money. Then the government gets the money the need for all the stuff they want. Heck most of the time they don't even have to worry about paying it back, they just stick it onto the debt, and of course the federal reserve doesn't care, since they printed the money for free. If it helps think of it like this. You need 5 dollars to buy something. So I write down on a piece of paper "5 dollars." And I hand you the paper. You tell everyone they have to accept any money created by me or else you will beat them up. So you go out and you buy cell phone with you 5 dollars. You now own a cell phone and owe me 6 dollars. Thats pretty much how our economy works. A few things quickly become obvious. One, why do I get an extra dollar in intrest when I didn't loan you anything? All I did was write down 5 dollars on a piece of paper. Two, isn't threatening beat people up if they don't accept your money illegal? And finally three, Isn't that just a big scam?

[juroara]

stop it alric, that makes our model to horrible to think about

[R.D.735]

It started with the Great Depression, really. The Federal Reserve was established to put a stop to the frequent bank runs and depressions of the 19th century, and instead made the next depression ten times worse by greatly deflating the money supply. Of course, no one could believe that the severity of the depression was the fault of the agency that was designed to prevent it, and the Fed remained in place. Ben Bernanke actually agrees that this was exactly what happened. True Keynesian policy is based around the idea that the free market has one critical flaw: prices go up much easier than they go down. To compensate, the government can vary spending or vary the money supply. Unfortunately, government spending also goes up much easier than it goes down. This has led to perversion of Keynesian policy of today, where spending by the government must increase by a greater rate than the economy in order to maintain smooth economic growth. We can see the results clearly: the federal government has become more and more powerful, and politicians easily find the useful ways to spend more money: on shady deals, corporate subsidies, and porkbarrel fiascos. Total government spending is about 20% of the economy today, and increases at an incredible rate every year. Unless the economy can keep pace with the government, which it most certainly can't, the policy will lead to utter disaster. Of course, all the officials who know about this problem hope that someone else will figure out how to fix it without cutting government spending, or delude themselves into believing there is no problem. It's kind of like driving on the freeway and only being able to turn right... and the gas pedal is stuck...and the brakes are gone. It's fun to go faster than everyone else, but there are stop signs and left turns in the real world.

[Original Poster]

It's supposed to make us pissed off so we can elect Ron Paul, the only candidate that wants to do away with the system.

[R.D.735]

It's unfortunate that none of the other candidates have actually addressed economic policy where it matters most. Even the Democrats seem oblivious to the reasons behind the weakening of the middle class, and the rest of the Republican candidates are in a world of their own.

[Moonbeam]

It's obviously totally unsustainable. I'm not being sarcastic.

[Original Poster]

If only people were educated enough. If Ron Paul isn't elected, I don't know whether to stay or go. This economic model is spreading though because people in charge realize they can get filthy rich from it, so it doesn't seem like there's anywhere to run. Maybe Venezuela.

[R.D.735]

I think it's best to remain in America. I think our economy is well-suited to recovery as long as the Fed doesn't do something ridiculously wrong-headed when the big recession hits. Moving to a foreign country probably entails more cost than it's worth, and there's no guarantee that circumstances will be better elsewhere(China will get hit really hard). Planning ahead for the things that will affect you personally is, as usual, a good idea.

[Neruo]

Yeah, the American economy is constructed in a extremely strange, unfair way. But it's also totally expectable, normal. I mean, why Wouldn't it have gone this way? If bankers can make it so that they are guaranteed to be able to give out loans to the government, making trillions, why shouldn't they? Easy money. People didn't even protested when things like this happened. People don't even know. Some act as if stuff like this is weird, of the level of conspiracy theories. I am being to see it as logical, natural. A normal way for people to act in certain positions. If things can get fucked up, meaning the many lose at the expense of the few, there is no reason for it not to happen, the few will take care of that gladly. As happened with the silly economical system in place now, and with a great portion of the world's politics.

[Original Poster]

So you're saying its natural because some greedy guys had the ability to turn it into this?