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Lono
05-08-2006, 08:46 AM
Im having a tough time answering this question and was hoping to maybe get some help on this question for my Macroeconomics class. Any help would be appreciated.

"People are poor because they don't have very much money. Yet, central bankers keep money scarce. If people had more money, poverty could be eliminated." Evaluate this view. Do you think it reflects sound economics?

This is not meant to be an opinion question. It is intended to get your responses based on economic principles. Remember that monetary policy and the Federal Reserve Bank System (Central Bank) is independent from U.S. government control.

NewChief
05-08-2006, 08:48 AM
Economics is one of my weakest subjects, but I'd think that more money would just devalue the currency and cause inflation.

chagrin
05-08-2006, 08:51 AM
HAA, don't worry dude, nobody here will give you their opinion. I am quite sure that you will find every answer based upon economic principles.

Bowser
05-08-2006, 09:18 AM
Economics is one of my weakest subjects, but I'd think that more money would just devalue the currency and cause inflation.

Yep.

Didn't Nazi Germany try the approach of mass printing money for citizens in the late 20's, early 30's to try and bring itself out of a huge depression? I remember from some history class stories of people having to take wheelbarrels full of money to the grocery store to buy food, because once the govt. did that, the value of their dollar plummeted.

I could be wrong about that, but that's the way I remember it.

banyon
05-08-2006, 09:20 AM
Im having a tough time answering this question and was hoping to maybe get some help on this question for my Macroeconomics class. Any help would be appreciated.

"People are poor because they don't have very much money. Yet, central bankers keep money scarce. If people had more money, poverty could be eliminated." Evaluate this view. Do you think it reflects sound economics?

This is not meant to be an opinion question. It is intended to get your responses based on economic principles. Remember that monetary policy and the Federal Reserve Bank System (Central Bank) is independent from U.S. government control.

What a terrible question.

It appears to be a straw man designed to have someone suggest that inflation would strip away the benefits of that suggested "solution".

There is an initial grain of truth in the proposition though. Initially, the demand to hold bonds would go down, lowering their price. Poor people, demographically speaking, typically aren't bondholders. This, in turn, raises interest rates and, because there is more consumption, raises the "C" in the GDP equation, theoretically creating more jobs and wages in the short term, but also likely raises inflation, eventually giving higher costs to manufacturers and to consumers.

Solving poverty is undoubtedly more complex than having Ben Bernanke alter the m1 money supply curve forward with a loose money supply.

Lono
05-08-2006, 10:17 AM
Ty for the responses.

Logical
05-08-2006, 10:24 AM
Economics is one of my weakest subjects, but I'd think that more money would just devalue the currency and cause inflation.

Exactly correct, in fact more money from the central bank would have the effect of making the poor even poorer, as their fixed incomes (minimum wage, welfare, unemployment) would have even less value in the economy.

StcChief
05-08-2006, 11:10 AM
Economics is one of my weakest subjects, but I'd think that more money would just devalue the currency and cause inflation.

Prime example: Jimmy 'Print money' Carter

Highest inflation in recent years.

banyon
05-08-2006, 12:41 PM
Prime example: Jimmy 'Print money' Carter

Highest inflation in recent years.

I think that was due more to the oil price shocks,

but are you blaming Carter for the Fed's monetary policy?

Art Burns Fed Chair 70-78' was appointed by Nixon.

Hydrae
05-08-2006, 01:24 PM
I view economics as a bell curve. Thus no matter what the values are, there will be those with less, those with more and the majority in the middle with some. We will always have "poor" people no matter what.

SBK
05-08-2006, 01:34 PM
Im having a tough time answering this question and was hoping to maybe get some help on this question for my Macroeconomics class. Any help would be appreciated.

"People are poor because they don't have very much money. Yet, central bankers keep money scarce. If people had more money, poverty could be eliminated." Evaluate this view. Do you think it reflects sound economics?

This is not meant to be an opinion question. It is intended to get your responses based on economic principles. Remember that monetary policy and the Federal Reserve Bank System (Central Bank) is independent from U.S. government control.

Poor folks are poor because of their view of money, just like rich folks are rich because the way they view money.

Printing more money just makes the little bit of money that poor folks have worth even less.

Cochise
05-08-2006, 01:54 PM
That whole statement is nonsensical from beginning to end.

banyon
05-08-2006, 02:11 PM
Poor folks are poor because of their view of money, just like rich folks are rich because the way they view money.


Yeah! why don't these dirt poor people just get a :cuss: job?

http://i.cnn.net/cnn/2003/WORLD/africa/01/21/africa.famine/story.carry.jpg
:rolleyes:

beavis
05-08-2006, 03:07 PM
Yeah! why don't these dirt poor people just get a :cuss: job?

http://i.cnn.net/cnn/2003/WORLD/africa/01/21/africa.famine/story.carry.jpg
:rolleyes:
I wasn't aware that we had starving Sudanese people in America these days.

RaiderH8r
05-08-2006, 03:37 PM
Yeah! why don't these dirt poor people just get a :cuss: job?

http://i.cnn.net/cnn/2003/WORLD/africa/01/21/africa.famine/story.carry.jpg
:rolleyes:
The first step to a successful interview might be for them to at least brush the flies off of their faces. Flies on your face just screams apathy.

BucEyedPea
05-08-2006, 04:04 PM
Im having a tough time answering this question and was hoping to maybe get some help on this question for my Macroeconomics class. Any help would be appreciated.

"People are poor because they don't have very much money. Yet, central bankers keep money scarce. If people had more money, poverty could be eliminated." Evaluate this view. Do you think it reflects sound economics?

This is not meant to be an opinion question. It is intended to get your responses based on economic principles. Remember that monetary policy and the Federal Reserve Bank System (Central Bank) is independent from U.S. government control.


If you really want to understand economics you'd do better by tossing that Macroeconomics book out the window and ditching class. All "establishment" economics studies today is the massive manipulation of money and credit by the Fed which creates distortions in the market. You don't need all that math and Laffer curves to understand things. Economics is actually a basic and simple subject. The word comes from the mistress of the household managing her inflow and outflow. It's been made complicated.

I'd suggest beginning with the basics...such as a book called Human Action by Mises. Economics is about human action and choices first and foremost.
Then read Hazlitt's "Economics in One Easy Lesson." Microeconomics is the name of the game.

Now the bankers aren't making money scarce today...they're creating too much of it. That relates to our govtís deficit spending. Itís called "fiat" money which is created out of thin air by a central bank and printed. It's not even called money....look at a dollar bill. It's called a "Federal Reserve Note."

People aren't poor because of lack of money alone. That's oversimplification. It would however be much saner to look at what creates wealth. And I'm not talking about easy and cheap credit which is the game Americans are being forced to play by bankers. Thatís not real wealth.

And banyon, you can't compare certain societies equally when they're apples and oranges. Contained societies where they: grow their own food, hunt their own meat, make their own clothes do not need to trade and exchange the same way. They don't need a lot of money as they are more self-sufficient. It's a simpler system.

banyon
05-08-2006, 06:17 PM
If you really want to understand economics you'd do better by tossing that Macroeconomics book out the window and ditching class. All "establishment" economics studies today is the massive manipulation of money and credit by the Fed which creates distortions in the market. You don't need all that math and Laffer curves to understand things. Economics is actually a basic and simple subject. The word comes from the mistress of the household managing her inflow and outflow. It's been made complicated.

I'd suggest beginning with the basics...such as a book called Human Action by Mises. Economics is about human action and choices first and foremost.
Then read Hazlitt's "Economics in One Easy Lesson." Microeconomics is the name of the game.

I would disagree that the best way to learn a subject is to avoid the traditional view of the subject and instead only learn the alternative methodology. Clear, informed thinking is always the best path to understanding.


People aren't poor because of lack of money alone. That's oversimplification. It would however be much saner to look at what creates wealth. And I'm not talking about easy and cheap credit which is the game Americans are being forced to play by bankers. Thatís not real wealth.

I think I agree here.

]And banyon, you can't compare certain societies equally when they're apples and oranges. Contained societies where they: grow their own food, hunt their own meat, make their own clothes do not need to trade and exchange the same way. They don't need a lot of money as they are more self-sufficient. It's a simpler system.

I was responding to shortbuskid's unqualified oversimplification. Any reasonable view would attribute some combination of intrinsic motivation and extrinsic circumstances as responsible for people's economic position. Certainly the informal economies at play in a place like Mali or Chad would alter the calculus involved, but it doesn't change the fact that these are people that are largely victims of circumstance.

To a lesser degree, that applies to people in the American economy. People do have a safety net of sorts (albeit a shrinking one), but their educational opportunities and corresponding job opportunities are circumstantial in part. The relative shares of wealth by each income group would indicate that this problem is getting worse with each year since the early 70's.

Adept Havelock
05-08-2006, 06:26 PM
Yep.

Didn't Nazi Germany try the approach of mass printing money for citizens in the late 20's, early 30's to try and bring itself out of a huge depression? I remember from some history class stories of people having to take wheelbarrels full of money to the grocery store to buy food, because once the govt. did that, the value of their dollar plummeted.

I could be wrong about that, but that's the way I remember it.

You are close, Bowser. It was during the Weimar Republic era (1918-1933) that hyperinflation occurred, due to massive printing of money, and the onerous "reperations" forced on the Germans by the French and English over Wilson's opposition by the Treaty of Versailles. This condition more that any other contributed to the rise of the Nazis.

A similar situation occurred in the CSA in the latter stages of the Civil War, as the South had little to no Specie or productive capability on which to base it's currency.

Back in college I always enjoyed torturing my friends in the Economics department. It's amazing how quickly they turn purple when you suggest that perhaps Adam Smith's "The Wealth of Nations" was simply a misunderstood piece of social satire along the lines of Swift's "A Modest Proposal". I'm pretty sure I've caused at least one episode of Angina Pectoris with that one. :D

banyon
05-08-2006, 06:31 PM
Wealth of Nations--satire?

pretty dry humor...

BucEyedPea
05-08-2006, 06:39 PM
I would disagree that the best way to learn a subject is to avoid the traditional view of the subject and instead only learn the alternative methodology. Clear, informed thinking is always the best path to understanding.


Is this also a satire?
That's funny, to someone of my economic background, when you refer to the above as "traditional." It's the other way around. The Macro guys turned the traditional on it's head and distorted it.

I think a better word would be "status quo."

banyon
05-08-2006, 06:42 PM
Is this also a satire?
That's funny, to someone of my economic background, when you refer to the above as "traditional." It's the other way around. The Macro guys turned the traditional on it's head and distorted it.

Whatever terminology you want to use. It is the paradigm accepted view now. My point is only that increased knowledge of any subject (whether you are pursuing the "traditional" bent on the subject or the "alternative" methodology) should only improve your understanding. If you're grounded well in your beliefs, then opposing views should not be daunting.

By analogy, Christians should feel free to read Satanic texts. If they are corrupted by them then their beliefs weren't very firmly established.

BucEyedPea
05-08-2006, 06:48 PM
Whatever terminology you want to use. It is the paradigm accepted view now. My point is only that increased knowledge of any subject (whether you are pursuing the "traditional" bent on the subject or the "alternative" methodology) should only improve your understanding. If you grounded well in your beliefs, then opposing views should not be daunting.

By analogy, Christians should feel free to read Satanic texts. If they are corrupted by them then their beliefs weren't very firmly established.

Daddy...is that you again?

You don't lecture to me about how I came to my views on economics because the very thing you are preaching to me is exactly how I came to them. Accepted views...smaccepted views...it's time for a better way. I came from the left and moved to the right.

And they are not unaccepted...many of these men from these places teach at our universities. They are also sought by members of Congress when they do research.

Also, I had my own business for five years, and simply streamlined it,by taking it into the home due to becoming a mother. ( Working 15 going on 16 years) So I am still self employed. I have had first hand experience with many of the principles and problems free enterprise brings. And I work in one of the most competitive industries.

banyon
05-08-2006, 06:56 PM
Daddy...is that you again?

You don't lecture to me about how I came to my views on economics because the very thing you are preaching to me is exactly how I came to them. Accepted views...smaccepted views...it's time for a better way.

And they are not unaccepted...many of these men from these places teach at our universities.

I had my own business for five years, and simply streamlined it,by taking it into the home due to becoming a mother. ( Working 15 going on 16 years) So I am still self employed. I have had first hand experience with many of the principles and problems free enterprise brings. And I work in one of the most competitive industries.

Why did you make this about you?

I'm just telling the youngster that he should read up a bunch and decide for himself.

FTR, I would classify my economic views are substantially nontraditional as well.

BucEyedPea
05-08-2006, 06:58 PM
eh?

Perhaps because "you" was in your last post which quoted me.
Were you not lecturing me a bit? As in below.

Whatever terminology you want to use. It is the paradigm accepted view now. My point is only that increased knowledge of any subject (whether you are pursuing the "traditional" bent on the subject or the "alternative" methodology) should only improve your understanding. If you grounded well in your beliefs, then opposing views should not be daunting.

By analogy, Christians should feel free to read Satanic texts. If they are corrupted by them then their beliefs weren't very firmly established.

Oh BTW...my views on economics are not "beliefs" the are not even based on "theory"...they are based on what actually happens. Reality.

banyon
05-08-2006, 07:04 PM
eh?

Perhaps because "you" in your last post which quoted me.
Were you not admonishing me a bit?

Yeah, but it's not an admonishment. It's just a disagreement about pedagogy.

You had also responded to me in the same post to which you refer (in #16). But I guess I went ahead and responded to your entire post instead of just the last part. I guess I assume that you understand where I am coming from on that part, since you didn't address it.

It's all good.

Hell, I don't even admonish patteeu, even though I disagree with him 99.5% of the time. :D

BucEyedPea
05-08-2006, 07:16 PM
Well I changed the word "admonishment" to "lecture" as it was a bit too strong.
But it comes across like a "talk" by a parent...like I don't know what I'm doing.
I've debated these things with progressives ( socialists)...communists even and I do not feel it corrupts my views. Quite the contrary it helps me to sharpen and hone my skills. :)

In fact I know everything someone from the progressive end is going to say BEFORE they even say it.

Weren't you the one who said I was not specific enough, but too ideological?
You haven't really given me any specifics as to why one system is better except to appeal to authority.

Boozer
05-08-2006, 08:02 PM
Oh BTW...my views on economics are not "beliefs" the are not even based on "theory"...they are based on what actually happens. Reality.

You reality is filled with rational utility maximizers?
:spock:

Lono
05-11-2006, 07:55 AM
Thanks for the help guys, I think i understand it better now.