Real World Event Discussions

Why is the world in such dire economic straits, and what can we do about it?

POSTED BY: SignyM
UPDATED: Sunday, August 23, 2026 20:19
VIEWED: 10090
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SIGNYM

Saturday, December 3, 2011 3:30 PM

I wanted to get back to this. I haven't forgotten, but this is a complicated topic. Let me recap:

There is a difference between finance and the economy, although the two are tied in today's world. The economy has to do with production and consumption. Finance has to do with money.

"Goods" tend not to collect in a few hands, and "services"... well, there are as many providers of services as there are competent labor-ready hands. It is very difficult to hoard enough of anything to make a difference in the everyday comings and goings of an economy... if vital commodities like lithium [batteries] or tantalum [capacitors] or oil are severely restricted, in the short run this will shock production, but in the long run alternative sources or materials will be found. Because a hoard of goods tends not to lend itself (so to speak) into collecting more of itself, it is fairly easy to break a monopoly on goods and commodities.

Money OTOH is a different story. To the extent that money eases the exchange of goods and services, it is a good thing. The problem with money is that, once it is a "thing" it can be hoarded, lent, and used to gather even more. Money behaves gravitationally, while goods do not. And depressions seem to occur when money collects in the gravity well of the very wealthy. Because money only functions to promote production and consumption when it is flowing, once it is collected, it stops flowing, and once it stops flowing the economy collapses.

The two antipodes that are presented over and over (and over and over) are Keynes and Hayeck... increase the money supply, or austerity. But neither really works, as Keynesianism tends to merely delay the inevitable and the Austrian school merely crucifies the vast majority (on a cross of gold, even!).

We need to think of money as a resource, albeit a very special one: Who gets it? How does it move? What are the alternatives? Can we do away with it?

We could redistribute money, but keep the same pro-corporate mode of production. However, the wealthy will eventually use their wealth to undo the system of wealth redistribution.

We could control how money is used... particularly, how money is created... but we've been there and done that when we were on the gold standard and it didn't do a single thing to prevent depressions.

We could go to a cooperative mode of production ... and although I think this would be a good interim step... there is nothing to prevent a cooperative from becoming as monopolistic as any corporation.

Money being used to buy and sell things isn't a problem. The ultimate conundrum revolves around "savings", "investment", and "debt".

One can control the use of savings and debt creation... simply require that money be saved and loaned at zero interest. But even in the ideal world of cooperatives, with zero-interest financing, there is still the issue of concentration of power through successive reinvestment in a particular cooperative.

So, ultimately, NOBODY should be allowed to "own" the means of production... not even cooperatives. Theoretically, that is the only solution that puts an end to all of these problems of money concentration and debt creation and irrational over-investment.

I've thought about how that might work, but run out of time, so I'll have to get back to this later.

SIGNYM

Saturday, December 3, 2011 6:29 PM

Actually, it occurs to me that there is really one one thing in human society that behaves in "gravitational" manner (besides gravity, of course) and that is human cooperation.

That is why the media is gravitational, money is gravitational, soldiers are gravitational, and religion is gravitational... but "goods" are not.

1KIKI

Sunday, December 4, 2011 2:27 AM

This is a lot to think about. I'm trying to think about is it gravitational or positive feedback.

SIGNYM

Sunday, December 4, 2011 8:35 AM

It's positive feedback. I just used gravity as an example of positive feedback that everyone in familiar with.

JAYNEZTOWN

Wednesday, December 16, 2015 4:24 AM

Former US Comptroller General Dave Walker says the US debt is actually three times more than the $18 trillion we see in the media

JAYNEZTOWN

Friday, December 18, 2015 1:00 AM

Quote:
Originally posted by 1kiki:

While Wall St. is going through the roof, Main St. is paying all the bills.

Check this one, thanks to Kwicko

FY End / Debt Outstanding / President

09/30/2015 18,150,604,277,750.63
09/30/2014 17,824,071,380,733.82
09/30/2013 16,738,183,526,697.32
09/30/2012 16,066,241,407,385.89
09/30/2011 14,790,340,328,557.15
09/30/2010 13,561,623,030,891.79 Obama

09/30/2009 11,909,829,003,511.75 W. Bush
09/30/2008 10,024,724,896,912.49
09/30/2007 9,007,653,372,262.48
09/30/2006 8,506,973,899,215.23
09/30/2005 7,932,709,661,723.50
09/30/2004 7,379,052,696,330.32
09/30/2003 6,783,231,062,743.62
09/30/2002 6,228,235,965,597.16

09/30/2001 5,807,463,412,200.06 Clinton
09/30/2000 5,674,178,209,886.86
09/30/1999 5,656,270,901,615.43
09/30/1998 5,526,193,008,897.62
09/30/1997 5,413,146,011,397.34
09/30/1996 5,224,810,939,135.73
09/29/1995 4,973,982,900,709.39
09/30/1994 4,692,749,910,013.32

09/30/1993 4,411,488,883,139.38 HW Bush
09/30/1992 4,064,620,655,521.66
09/30/1991 3,665,303,351,697.03
09/28/1990 3,233,313,451,777.25
09/29/1989 2,857,430,960,187.32 Reagan
09/30/1988 2,602,337,712,041.16
09/30/1987 2,350,276,890,953.00
09/30/1986 2,125,302,616,658.42
09/30/1985 1,823,103,000,000.00
09/30/1984 1,572,266,000,000.00
09/30/1983 1,377,210,000,000.00
09/30/1982 1,142,034,000,000.00

09/30/1981 997,855,000,000.00 Carter
09/30/1980 907,701,000,000.00
09/30/1979 826,519,000,000.00
09/30/1978 771,544,000,000.00

09/30/1977 698,840,000,000.00 Ford
06/30/1976 620,433,000,000.00
06/30/1975 533,189,000,000.00 Nixon
06/30/1974 475,059,815,731.55
06/30/1973 458,141,605,312.09
06/30/1972 427,260,460,940.50
06/30/1971 398,129,744,455.54
06/30/1970 370,918,706,949.93

06/30/1969 353,720,253,841.41 Johnson
06/30/1968 347,578,406,425.88
06/30/1967 326,220,937,794.54
06/30/1966 319,907,087,795.48
06/30/1965 317,273,898,983.64
06/30/1964 311,712,899,257.30 Kennedy
06/30/1963 305,859,632,996.41
06/30/1962 298,200,822,720.87
06/30/1961 288,970,938,610.05

06/30/1960 286,330,760,848.37 Eisenhower
06/30/1959 284,705,907,078.22
06/30/1958 276,343,217,745.81
06/30/1957 270,527,171,896.43
06/30/1956 272,750,813,649.32
06/30/1955 274,374,222,802.62
06/30/1954 271,259,599,108.46
06/30/1953 266,071,061,638.57

06/30/1952 259,105,178,785.43 Truman
06/29/1951 255,221,976,814.93
06/30/1950 257,357,352,351.04

SIGNYM

Friday, December 18, 2015 11:15 PM

This was an interesting discussion, and still relevant.

I hope that KPO and THUGR and G read it, if nothing else to

1) Serve as an example of an actual discussion.
2) Demonstrate that there is life beyond their obsession with Russia
3) Show that I'm not ALWAYS talking about Russia or criticizing The West, I DO actually think about theoretical things, and have criticisms of socialism (should socialism ever come about) because I can see that it would create its own conundrums

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You can't build a nation with bombs. You can't create a society with guns.

JAYNEZTOWN

Saturday, December 19, 2015 9:15 AM

another flaw for me in the US system is how open its scientific property is, I mean imagine you have an American company, it got support, tax cuts, grants whatever help and they invest in research....a better machine on how to freeze ice, or a better offroad motorbike or a new computer chip for a phone or something...whatever the item. For me this 'item' is a product of America, yet outsourcing and crony capital globalism should not mean that an American physics product or artistic chemical product or scientific product ends up in Japan or China or Italy or India or S.Korea two weeks later...so many times have I seen and heard of America simply giving away its best technology for a few bucks it just makes me shake my head. If America invents a new engine, a new computer or new aqua vehicle or a new chemical prodict I feel the United States should have intellectual access to its products for at least 4-5 years in a controlled enviornment inside America, if it is sold then it must be sold for a high price then after 4 or 5 years of course it should be sold or give out to the rest of the world. It's ridiculous how quick America gives away items it has taken years to have studied and researched.

1KIKI

Saturday, December 19, 2015 9:37 AM

Why is it that positive feedback SYSTEMS persist? Not any one particular system, but the whole process? What might be negative feedback besides an alternative super-competing positive feedback system?

SAGAN: We are releasing vast quantities of carbon dioxide, increasing the greenhouse effect. It may not take much to destabilize the Earth's climate, to convert this heaven, our only home in the cosmos, into a kind of hell.

SIGNYM

Saturday, December 19, 2015 9:06 PM

I suppose we can look at black holes as the ultimate positive feedback system: A heavy star attracts matter, which creates a greater gravitational field which attracts more matter, which collapses to a black hole, which continues to behave in the same gravitational way .... I don't know if physicists or astronomers and mathematicians have ever imagined what "the end" of a black hole looks like. It seems that what happens in a black hole is beyond our observations and our math.

Fortunately, it's easier to observe other positive feedback systems, and they definitely have an "end" of one sort or another. In some cases .... like amplifiers ... they result in destructive oscillations which burn out the circuits. In nuclear fission, they result in an explosion which scatters the elements and slows down the reaction. In the case of lofting greenhouse gases into the atmo, they result in a new equilibrium - a la Venus. In the case of money concentration, they result in repeated depressions when too much money is concentrated in the hands of too few, and there aren't enough customers to drive production (another oscillation) which leads to revolt.

For those destructive positive feedback systems which we create ourselves ... like cyclic economic/ financial depressions ... you would think that we'd be 100% on top of that: Able and willing to predict the consequences of the systems that we ourselves had created, or at least allowed to develop.

Among them, scholars and researchers have sussed out what some of the underlying drivers are. The only reason why we don't make further progress on this, IMHO, is the fact that TPTB have a vested interest in things STAYING JUST AS THEY ARE: In this case, where they have all of the money and influence. So they will spend significant amounts of money on think tanks and endowments and commercials and campaign contributions to blunt and confuse our collective understanding of what is happening and what is happening next, and what might be done about it.

I personally think that since wealth seem to always behave gravitationally because it eventually sifts into the hands of a few sociopaths who are able and willing to take advantage of its ability to concentrate MORE wealth and power - we are fully capable of understanding the problem and devising solutions to this underlying driver, instead of being caught in an endless cycle of decay, collapse, and regrowth.

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You can't build a nation with bombs. You can't create a society with guns.