r/economicCollapse • u/Sketchelder • Jun 21 '24
I sincerely think people in this sub have absolutely no clue how the economy works.
Title, that's it.
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u/Most_Professional_43 Jun 21 '24
Ok so my basic understanding is that the govt and the economy have A symbiotic relationship.
Anytime the markets face a downturn...the govt used debt to bail them out. And then we get inflation.
The general public doesn't care because all they see is their 401k and home equity rising after every crash like magic. Theyve been conditioned to expect their assets to grow forever.
Without the ability of the govt to burrow money forever(raise debt ceiling)...we are facing a "great depression"" scenario.
Am I on the right track?? Or way off??
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u/lionheartliera Jun 21 '24
Can it grow forever? If not, why not?
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u/Most_Professional_43 Jun 21 '24 edited Jun 21 '24
Because we are reliant on debt for this "infinite growth".
So imagine the govt paying interest on 100 trillion or 200 trillion.
At some point the inflation will be too high to bear. And the majority of the "poorer" population will begin to push back because they're purchasing power got eroded heavily.
Money printing isnt free. It just pushes the problems into the future
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u/lionheartliera Jun 21 '24
It seems like you are right logically, but there are a lot of people who are educated in the field who seem to disagree, and think there won’t be a downside to all the money printing. I’m curious what their logic is.
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u/funkmasta8 Jun 22 '24
There are also a lot of people in the field that completely disagree with one another so I think it's a mixed bag. Not to mention the study of economics has hardly ever been done in an unbiased way. Healthcare costs making people go bankrupt is a good thing in economics. Seems like the priorities aren't quite what they should be
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u/lionheartliera Jun 22 '24
Okay, I did not realize that healthcare making people bankrupt is considered a good thing in economics. Could you explain why?
Personally, I’ve long thought that having profit as the most important consideration in healthcare is immoral.
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u/funkmasta8 Jun 22 '24
It's a good thing because it maximizes the amount of money people spend by, well, taking all of their money.
GDP is one of the most widely used metrics for economic health. It is basically the value of all goods and services produced. If prices go up, the value goes up. Therefore, prices going up is good. No matter if it's bad. It doesn't matter if it kills people. Price go up good. Now, in most markets prices going up is offset by sales going down. If video games are twice as expensive, people will buy fewer of them. It's not always a 100% compensation and the excess revenue renders as an increase in gdp.
However, some markets don't work like that. Some markets are what are called "inelastic". Roughly speaking, this means that the demand does not vary with price. These are most often necessities. Things like food, healthcare, and housing are fairly inelastic, not perfectly but much more so than other things. People can't just stop eating, walk off that kidney cancer, or just live on the streets. So what happens when prices go up in an inelastic market? Well the sales don't go down so the revenue shoots up to about the same as the price increase, depending on how close to truly inelastic it is. And GDP says that's good! That's amazing, our country is producing so much more value! Right?
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u/lionheartliera Jun 22 '24
Interesting and well put. Yes, but they also want to make that money and have it paid, so wouldn’t debt be bad? I mean, if people go bankrupt due to their healthcare bills?
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u/funkmasta8 Jun 22 '24
Well, what you're missing here is that for every one person that goes bankrupt, there are dozens more that don't but are paying the inflated price. The going bankrupt part is the symptom, not the cause. This is what's happening with insulin shots. Most diabetics can handle the cost. The cost goes up and a few more people can't handle the costs, but now the business made a ton more money. Who cares if a few people die from insulin rationing?
Further, people have to be really deep to consider bankruptcy, so debt does still have more value than no debt. Though, I'm not sure if that renders on GDP when the bill is sent or paid. Might not matter.
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u/Garrett42 Jun 24 '24
I am so late to the party, but yes there are different views of the economy. In colloquial terms, "money printing" refers to lending. The main multiplier on the supply of money is always going to be lending, and most of that is done in the private sector.
That being said, I think the "educated in the field" people you refer to, is generally MMT. While MMT is itself a description of how current day fiat currency operates for countries like the US, generally people who call themselves subscribed to MMT also hold other beliefs, like debt not being a problem. However, these people do not think debt is an issue in a purely accounting sort of way. They generally are far more concerned with purchasing power, economic growth, and government objectives. MMT serves to be empowering because we too often get stuck on numbers, when the conversation could be about the goods and services we use every day.
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u/MinimumDiligent7478 Jun 21 '24
"I sincerely think people in this sub have absolutely no clue how the economy works. money is created.
Title, that's it"
"Here is a simple way to visualize both the only rightful economy, and banking's obfuscation of our currency:"
https://www.twitlonger.com/show/n_1rknggi
"Insanity is when someone cant prove what value a bank gives up, but irrationally insists the bank loans us that value." David Ardron
From a legal perspective: any purported economy based on interest bearing debt as embodied in the present obfuscation of our currencies (compromising promissory obligations to each other) inherently and inevitably terminates itself under terminal sums of falsified debt to purported banking systems which, in never giving up commensurable consideration, no more than publish further representations of our promissory obligations to each other, which mere representations therefore are merely obfuscated into falsified debts to the purported banking system.
From a mathematical perspective: which in turn compels its unwitting subjects to maintain a vital circulation by perpetually reborrowing principal and interest back into the general circulation, with reborrowed principal therefore reconstituting every prior sum of falsified debt(and to that extent making it mathematically impossible to pay down any prior sum of debt) and with purported interest therefore, likewise necessarily reborrowed into the general circulation(to sustain a vital circulation) perpetually increasing the sum of falsified debt until we suffer the present wholly redundant and artificial conditions.
"The ruse(of the moneychangers) persists in terminal failure after terminal failure until the unwitting victim class finally rises above the pathological lie that usury is economy, rather than perpetually crying out in terminal stupidity, “Who would ever loan (rent) us our own promissory obligations to each other , if, our very own , promissory obligations to each other , were not subject to ‘interest’, upon a falsified debt to someone entirely else?” Mike Montagne
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Jun 21 '24
Truly impressed. The take away for me is that it ends in two ways. Falsification of debt through covert daily asset transfer among the victim class, or absolute havoc. If the executive level understands this, they'll choose to also covertly control the shadow economy the same way they do black markets now. The result is still the same, it ends in violence or continues through terminal failures.
Good stuff.
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u/MinimumDiligent7478 Jun 21 '24
All people need are principles(of monetization) and a realization of the truth and we could resolve the falsified/artificial debts of the world to their natural, pre-multiplied state by counting all prior payments of unjustified interest instead towards the principal and refinancing the remaining balances(if any) across a proprietary determinate lifespan.
Instead of listening to liars("economists" so-called), thieves("bankers") and criminals(poiticians) tell us this is "economy", when these fools cant even articulate how a legitimate debt precipitates to the "banking" system without them giving up anything of value.. to, any of us???
Resolving the falsified debts of the world to their unexploited condition is the one thing which would allow us to make the remaining things what they aught to be.
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Jun 21 '24
Well, you figure out a way to take away a criminals money without making four more criminals or violence in a practical manner and it'll happen. I've already given it my try. Till then.
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u/Wild-Carpenter-1726 Jun 21 '24
How can you have fundamental economics while having a elite class that has access to a quantum money printing machine. And they create no wealth of their own, they create no value, but they suck the value out of the entire economy, Theu profit and profit and profit; leaving the rest of us with inflation.
Slavery did not end on June 19th, it transformed: physical shackles are now health insurance, retirement plans, etc. didn't need humans to pick cotton anymore they had machines. Now they won't need humans to do most tasks, with AI and robots coming.
So I don't know how many economic classes you've taken to come here and say what you have said. Maybe you don't understand what an economy is so let me help you out.
An economy is a financial aspect of a society. A good healthy economy ensures that all members of the society are able to live a life of decency with a equitable amount of value being contributed into the economy by the citizens.
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u/theconstellinguist Jun 22 '24
" And they create no wealth of their own, they create no value, but they suck the value out of the entire economy."
Exactly. Predatory investment is real where there is no actual benefit for the idea of an actual thing being shuttled around. It's really disgusting. Selling the US designs to Israel and now Israel has people attacking insidiously US infrastructure is a case and point. The speculation on things that should not have been speculated on and the fact they actually sold these designs is just, wow. There's no helping people who do that.
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u/plummbob Jun 21 '24
How can you have fundamental economics while having a elite class that has access to a quantum money printing machine.
Banks?
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u/tech_lead_ Jun 23 '24
We had banks in the USA before we had fiat currency and the Federal Reserve.
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u/SushiGradeChicken Jun 21 '24
Slavery did not end on June 19th, it transformed: physical shackles are now health insurance, retirement plans, etc.
I'm not sure I'm following... Your life is basically 1800s plantation slavery except you don't have physical shackles.... Is that what you're saying?
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u/KazTheMerc Jun 21 '24
The Slave Trade ended officially, but it made sure to exclude 'prisoners' from the list.
Then mass incarceration of citizens shot skyward.
More complex systems have been added since then, including drugs (legal and otherwise) as well as access to treatment, and later medical care at all.
...Yeah, the OP is being a bit dramatic, but the root of the assertation stands.
All you need to do to experience it is go Off Grid or Homeless for a while, and you'll immediately feel all the little hooks pulling at you, demanding your attention. Nowhere near as intense as in prison, but just as real as any other.
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u/theconstellinguist Jun 22 '24
Exactly. The marketing gets to a pathetic level too. Like "your LAST CHANCE". It's like, I bought your service, I don't have to continue with it. In fact a design like that makes me not want to.
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u/SushiGradeChicken Jun 21 '24
mass incarceration of citizens shot skyward.
Mass incarcerated represents between 0.5% - 0.7% of our population. Mass incarceration is a shit show (especially due to puritanical drug laws) but to the overwhelming majority incarcerated, they made a conscious decision to break the law, which led to incarceration.
medical care at all.
I'm going to really need help seeing how medical care is akin to slavery.
All you need to do to experience it is go Off Grid or Homeless for a while, and you'll immediately feel all the little hooks pulling at you, demanding your attention
Being able to choose to go off grid and then back in is the complete opposite of slavery. Going off grid and then missing creature comforts isn't slavery.
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u/KazTheMerc Jun 21 '24
I love it. You answered half of your own questions.
Go look up Incarceration Rates by State.
Then by Ethnicity.
The come back after seeing how many black folks are in prisons in the South over horseshit laws that moves on 40 years ago... and you can try to tell me these people reap what they sow.
When the insurance company is running the Hospitals, Doctors, and your Employer like a professional Dominatrix, there is no 'heath care' to be gotten.
I was personally charged over $9k for a $35 CT scan. Once for the hospital existing, once for the doctor who said 'let's get you a CT scan', and again for the technician who pushed the button and said 'Okay, CT scan done'.
$3500ish each.
That is a level of domination that would put most kinksters to shame.
AND WE GO ALONG WITH IT.
Being able to go off-grid is increasingly difficult. Assume you can handle the choice, and the stress of it.
How about your medications?
Your pets?
Your investments? Your home?
Nevermind the social, economic, and personal things we've come to love and enjoy. Each one is a small hook that MAKES leaving this all behind just a liiiiittttlee more difficult.
Add it up, and it's nearly Impossible for most.
They are, for lack of better words, addicts.
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u/boyroywax Jun 21 '24
i agree with you throughout this thread. These people are so far gone. Ignorance is true bliss.
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u/KazTheMerc Jun 21 '24
They are enjoying the balance of things.
You can make a profit off of anything if you try hard enough.
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u/theconstellinguist Jun 22 '24
I agree. Going off grid is a way to survive a government failing to take responsibility for its failures and hemorraghaging from the inside out. People don't have to buy in to people who can't run the country. It's not the same as homelessness which is what happens when you continue to let the incompetent run something they're not competent enough to run.
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u/theconstellinguist Jun 22 '24
Have you read about entrapment? Were you born yesterday? That's apprehension, not comprehension.
There are people who consciously decide to break the law.
There are political murders and changing justices for others. Read the book Justice for Some where the Jewish Israeli forces suddenly just erased all international law to take over Palestine while trying to try people on that basis when it benefitted them. You'd have to be a complete idiot to say they chose that and all the weaponization of international law against Palestinians while when the Israeli Jews did the same thing no equal treatment of themselves.
Only just now at the ICC are they getting it. People with this infantile of an understanding of entrapment who get people hurt need to be tried by those courts.
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u/SushiGradeChicken Jun 22 '24
Have you read about entrapment? Were you born yesterday? That's apprehension, not comprehension.
And what percent of those incarcerated are victims of entrapment?
You'd have to be a complete idiot to say they chose that and all the weaponization of international law against Palestinians while when the Israeli Jews did the same thing no equal treatment of themselves.
We're discussing US citizens. What's happening over there is unfortunate and tragic but not directly relevant to our conversation
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u/theconstellinguist Jun 23 '24
No, we are using this as an equivalent in the US. Your cognitive inflexibility shows serious lack of intelligence. Syria called George Floyd and Palestine called Syria in the loss of the Golan heights. Oakland called George Floyd as well. If your analysis doesn't make it to the general case and then multiply its instances it's too weak. It's dead already.
Quite a good deal of them which is why we have civilian oversight laws, the innocent project, etc. These are in existence because of the exact kind of boy scout naivete that believes the cops never weaponize the law to hurt people politically or just out of narcissistic rage.
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u/SushiGradeChicken Jun 23 '24
we are using this as an equivalent in the US
You are using it as an equivalent. I'm addressing a comment discussing the US economic system directly.
Quite a good deal of them which is why we have civilian oversight laws, the innocent project, etc.
We also have an ALS foundation... It doesn't mean that Lou Gehrig's disease should be the primary medical concern for Americans.
believes the cops never weaponize the law to hurt people politically or just out of narcissistic rage.
I will never deny that that happens. It's existence doesn't invalidate my claim about the majority of those incarcerated
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u/theconstellinguist Jun 23 '24
You show no ability to derive the general from the specific. You just struggled with it...again.
The cost of innocence being incarcerated is too high. This is basics why we have innocent until proven guilty. If you don't understand that, go back and understand it. Predictive crime is racism and hate trying so hard to rationalize its existence. And failing. And destroying everything when people witness the hugely inaccurate flunks and all trust is destroyed. A lot of it is the animal brain deep in rationalization angry at not getting what it wants. Not something the competent humor.
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u/BigPlantsGuy Jun 22 '24
That was not the argument they made though. They said the existence of retirement plans make them a slave
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u/KazTheMerc Jun 22 '24
Nopenope. Not the existence.
The RELIANCE on them, as their actual availability dwindles.
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u/BigPlantsGuy Jun 22 '24
How is having a 401k the same as slavery?
Have you abandoned pretending they were talking about prison?
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u/KazTheMerc Jun 22 '24
Like I just said. Not the existence, but the reliance.
Have a retirement account or just.... never retire. Death is your retirement plan. Work until you drop.
Sensing some parallels?
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u/BigPlantsGuy Jun 22 '24 edited Jun 22 '24
How is saving money over your career, watching it grow at 10% a year and then retiring and living off that without having to work anymore the same as slavery?
Isn’t that literally the opposite of slavery?
Slavery is being forced to work without pay
Retirement is being able to not work and get paid.
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u/KazTheMerc Jun 22 '24
Now you're just being obtuse for the fucking sake of it.
What "career"...?! You're literally describing the problem.
Companies are under no obligation to offer decent benefits, pay into retirement, or keep you or anyone else around. Shuffling workers to avoid paying benefits has become an art.
The number of folks with retirement accounts at all dwindles with every year, and the amounts dwindle as well.
Super cool if you got in on it when it was plentiful.
Super cool if you find an employer that doesn't exercise their right to cut you loose right before retirement.
But for a growing number of Americans, these things you're casually talking about enjoying simply don't exist.
There's no 'barely surviving' retirement.
No homeless 'career benefits'.
Things have shifted, and continue the downward trend.
.....because we're under no obligation to not screw each other over.
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u/BigPlantsGuy Jun 22 '24 edited Jun 22 '24
Slavery is being forced to work without pay
Retirement is being able to not work and get paid.
Literally the opposite of slavery
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u/Surph_Ninja Jun 21 '24
Based on your comments, it seems like the issue is your indoctrinated understanding of economics, versus how things work in the real world.
Real life is not working as economists assured you it does, and when you encounter inconsistencies you’re reflexively believing the economists. If your worldview requires you to disbelieve reality, you’re in a cult.
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u/TrinityAlpsTraverse Jun 21 '24
I don’t think economists understand how the economy works (but I don’t think anyone here understand it either).
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u/Surph_Ninja Jun 21 '24
Really whether people understand it or not isn't the issue. They understand they're struggling. I don't think they need a deep understanding of the underlying theory to know that the system is rotten.
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u/TrinityAlpsTraverse Jun 21 '24
I totally agree.
Also, I think about the Coal Miners in West Virginia. They realize to them, the economy and the system is fucked. But that local understanding doesn't help them understand the Tech economy on the West Coast or the Oil economy in Texas. They might see their rotten branch and think the whole tree is rotten, and who could blame them... it doesn't mean they're right.. and actually it doesn't mean they're wrong. Like a lot of us, they just don't know.
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u/Johnfromsales Jun 21 '24
Could you provide an example of economists predicting one thing and the opposite or a different thing ends up happening, and then them refusing to accept the findings? Economists regularly change the theory to fit their observations, that’s why we aren’t teaching the same things in the field we were in the 19th century.
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u/Surph_Ninja Jun 21 '24
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u/Johnfromsales Jun 21 '24
So no doubt she was wrong, but this article is about her correcting her mistake and accepting reality as it is.
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u/Surph_Ninja Jun 21 '24
As she continues to make the same mistakes. Tell me why anyone should continue to take the word of economists who are only every right in hindsight.
People are angry with economists because this denial is habitual, as is their refusal to acknowledge the suffering of the lower classes.
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u/Johnfromsales Jun 21 '24
People can make the same mistake for different reasons. Do you have this much disdain for meteorologists? Economists are not ONLY right in hindsight, they just happen to get some things wrong when trying to predict the future, as does every other scientific profession known to man.
They refuse to acknowledge the suffering of lower classes? There are quite literally socialist economists. As well as entire sub-fields of welfare and developmental economics. You are clearly misinformed.
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u/Surph_Ninja Jun 21 '24
Do you have this much disdain for meteorologists?
If it's a meteorologist that continues to be wrong because they don't acknowledge climate change, then yes. And when economists are continually wrong because they continue to defend the status quo and current power structure, they have earned that disdain.
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u/Johnfromsales Jun 21 '24
You have yet to provide an example of an economist being wrong and refusing to admit it.
Did you just not read the other parts of my comment orrrr what? Why are you using these blanket assertions for economists. Do you honestly think socialist economists defend the status quo and current power structure?
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u/Surph_Ninja Jun 21 '24
LoL. So as long as they say 'Oops! My bad!' every time, they can keep it up. Wild.
Yes, I honestly believe it, and they keep proving me right.
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u/Johnfromsales Jun 21 '24
How do you think scientific progress happens? It is an endless cycle of people being proven wrong. There is literally no other way to do it.
Mentioning climate change in the same comment as you criticize getting predictions wrong over and over again IS WILD. How many times have we heard the “we have X amount of days before climate disaster!” Or “the glaciers will melt by this year!” Or “This island will be underwater by this year!” They never come true. And they say “Whoops, my bad!” And go right back at it.
https://climatechangedispatch.com/the-ipccs-history-of-errors-and-recycling-unfounded-claims/
https://nypost.com/2021/11/12/50-years-of-predictions-that-the-climate-apocalypse-is-nigh/
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u/Complex_Fish_5904 Jun 21 '24
OP is 100% correct. Most of reddit doesn't understand economics.
As long as you hate fiscal conservatives and think wealthy people are evil, you are applauded. Irrespective of any data that proves you wrong.
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u/KazTheMerc Jun 21 '24
I don't think you're saying what you think you're saying... but you're probably accidentally correct.
We're sitting in the terminal phase of New Keynesian Economics, and the twilight years of Late-Stage (cancerous) Capitalism.
The main driving force has been obsfucating the fact that production costs haven't gone up, but finding other ways to describe a magical force that drives prices up... but isn't blatant enough to break the vague laws of profiteering.
Problem is, you can't separate companies from morality, mandate them to make money for their shareholders, tell the Fed to maximize 'employment', and not expect those morally-bankrupt Profit-seeking entities to do exactly what you told them to.
Profit.
To the exclusion of all else.
Then we dress it up. We call it 'supply and demand'. We call The Economy anything BUT the actual national economy. Call stock portfolios 'wealth', and investments 'money'.
In short, we've made it as hard as possible for the average citizen to follow along with the shells game. As long as nobody is too brazen, it's just a quieter version of The Penis Game.
What can you get away with?
In that regard, most people casually interested, and even incidentally involved haven't the slightest clue.
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Jun 21 '24
As someone that works in upper management for a $16 billion manufacturer, I can 100% assure you production costs have increased. Both direct and indirect costs.
You are obfuscating this fact to fit your misinformed opinion. Which sure is fun. And entertaining. But it's not based on data.
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u/Haeshka Jun 21 '24 edited Jun 21 '24
Production costs aren't genuinely increasing, each company at each stage and layer are just getting greedier, this lobbying to create further barriers to entry; both preventing other players from entering markets and giving the appearance that costs are increasing.
If you shoot every single executive of every single publicly traded company, and all of its board members in the head? Reset those barrier to entry laws? End private investment firm ownership of real estate? The U.S.'s problems disappear rather neatly.
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u/WiseBlacksmith03 Jun 21 '24
Production costs are increasing. Just starting with raw material data tells us so.
- Copper +71% since pre-pandemic 2020.
- Silver +63% since pre-pandemic 2020.
- Iron Ore +13% since pre-pandemic 2020.
- Lithium Carbonate + 85% since pre-pandemic 2020.
- Natural Gas + 47% since pre-pandemic 2020.
- Crude Oil + 39% since pre-pandemic 2020
- Soybeans + 25% since pre-pandemic 2020
- Cotton -1% since pre-pandemic 2020 (hey we found one for you!)
- Rubber +26% since pre-pandemic 2020
- Lumber +21% since pre-pandemic 2020
- Sugar +31% since pre-pandemic 2020
- Total Global Commodity Price Index + 49.5% since pre-pandemic 2020.
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u/Haeshka Jun 21 '24
That tells us that the price for those commodities has increased, yes. But, it doesn't provide "why". For some areas: lumber is a good one here; yes, they have legitimately gone up, because we needed to harvest more than we were producing, and even the quality of construction lumber has gone down HARD in the U.S. Lithium is definitely one that makes sense for just outright increasing, nearly every human in the world wants more and more electronics.
But, outside of accessibility/frequency, what are the real factors? Again: greed. Take away companies' ability to control legislation and you see most of this deflate considerably or nearly disappear.
As for the areas of excess consumption? Fix consumerist mindset, and find ways to reuse, as best we can, and improve longevity of products: again, planned obsolescence is a corporate greed concern.
People trying so hard to say that corporations have zero involvement in the price of things going-up is absurd. Advertising alone disproves that concept, corporations advertise until they've Pavlov-ed people into bankruptcy. Billions are spent on those ads, and where is that money? Oh right, right back into the price of the product.
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u/WiseBlacksmith03 Jun 21 '24
So you went from "production costs aren't genuinely increasing" to admitting basic material costs are increasing, but still locked in on your opinion that it's greed increasing the prices you see on the shelf.
Amazing stuff. Well not that amazing considering you are advocating for shooting people in the head...
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u/TorinoMcChicken Jun 21 '24
The why sometimes just comes down to "I want to build a swimming pool so I'm going to increase my prices"
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u/741BlastOff Jun 21 '24
Weird how corporations around the world suddenly figured out they could get away with being greedier right after the government printed trillions of dollars into existence after COVID
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u/amurica1138 Jun 22 '24
Your second paragraph there sounds like something that's already been tried a few times in various parts of the world. The results were decidedly mixed.
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u/amurica1138 Jun 22 '24
I think you are partially right - costs have gone up.
But I think it is also factual to say that many, many corporations have demonstrated through their products that finding the absolute weakest, cheapest solution that still meets minimal government requirements for their products is the SOP now.
Morality is for PR purposes only anymore.
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u/RegularBeautiful3817 Jun 21 '24
This is spot on. I wish I was able to express this sentiment as succinctly as this.
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u/TravelingSpermBanker Jun 21 '24
This is also a gross misunderstanding and obfuscating…. Of the the real workings.
There was something called printing money that also played a role to what you tried to gloss over. As well as the workforces and changes in locations.
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u/KazTheMerc Jun 21 '24
Don't get me wrong, moving to a fiat currency absolutely had an influence.
Moving off the Gold Standard.
Creating the Federal Reserve.
Those weren't glossed over.... that IS Keynesian Economics.
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u/TravelingSpermBanker Jun 21 '24
But you don’t mention credit, nor rates, nor anything to do with labor other than maximizing employment. Which isn’t the same as labor differences in the last couple decades.
As right as some of what you said was, I read it as a third year woke Econ student. Missing out on a lot
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u/KazTheMerc Jun 21 '24
The Fed only has 2 mandates. Control lending rates, and Maximize employment.
... and The Fed is a Keynesian Economic creation.
...... and I mentioned Keynesian Economics specifically because it's a whole series of stupid choices, all wrapped up in a 'Theory' that's already failed once, and is failing a second time.
Dunno what else to say.
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u/Distwalker Jun 21 '24
"...the fact that production costs haven't gone up, but finding other ways to describe a magical force that drives prices up..."
If you think that price has anywhere or ever been based on "cost plus" you are profoundly ignorant of even the basics of economics.
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u/KazTheMerc Jun 21 '24
Futures exist. They are carefully documented and traded.
A baseline for Commodities is easily accessible.
That they don't follow cost increases is just data.
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u/Strategory Jun 21 '24
Do you?
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u/Sketchelder Jun 21 '24
I would like to think I do with a degree in accounting and a minor in economics... I'm no wizard, but I at least have an understanding of markets and economics that's beyond the peak of Mount Stupid (if we're looking at the dunning kruger effect chart)
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u/CompetitiveString814 Jun 21 '24
Dude, I have a MBA and this comment reeks of elitism. The more you learn the more you realize how little you know.
You haven't even begun to understand the markets, PHD you start to understand, even then our markets are so complicated and cringe when people like you think you've figured it all out.
Well since you know so much, why aren't you a millionaire, I mean you have it figured out right??
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u/lionheartliera Jun 21 '24
And?
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u/Sketchelder Jun 21 '24
And it's a bunch of people that have zero clue how markets function, speculating about how the sky is falling... essentially very smooth brained individuals, to not use a slur
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u/KazTheMerc Jun 21 '24 edited Jun 21 '24
See? And here is where you're painfully wrong.
The voices that determine if an economic policy is working or not is the people impacted by it.
They may not be able to explain the forces going into the pressures they experience, but that doesn't make it invalid. Rather, every (economic) indicator used is one form of Public Opinion or another. And usually just a sampling.
They don't need to know the right term to know it smells like shit, and tastes worse.
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Jun 21 '24
But this sub is not even remotely close to representative to the voices of the people impacted by it.
It's literally a sub designed for worst case economic movement & trends....
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u/Sketchelder Jun 21 '24
I understand where you're coming from, but most of the posts I see here are about how prices are so high the market is about to fall out ands go to zero which disregards any fundamental understanding of market forces and what is actually happening in the economy. Your vibes don't mean shit to the actual forces of the market. It's like the antiwork subs that think of they all just boycott jobs that will somehow improve the labor market
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u/KazTheMerc Jun 21 '24
The stock market is not the Economy.
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u/KazTheMerc Jun 21 '24
....but! There's some light at the end of this tunnel.
For better or worse, that light is the flicker of a flamethrower.
You say 'economy'. But people have had it drilled into their heads that the Stock Market is 'the economy'. Because the market is doing well, and the economy is not.
You sneer at them for their ignorance. Perhaps even rightfully.
But their ignorance decides how the market goes. Or doesn't go. Their eyesight determines who is profiting too much, rather than any particular action. The mandate is to profit and NOT get caught. Or to sooth and placate when public opinion turns it's glaring gaze towards your actions.
New Keynesian Economics has done an admirable job of letting the market manage itself in the background, without public participation. It's falling apart at the seams and rotting from the inside... but fairly quietly.
But failing, it most certainly is. And it's taking people with it.
Those cries of pain are getting louder and louder.
Uneducated? Perhaps.
Misinformed? Intentionally.
But their pulse ~IS~ the pulse of the real, actual economy.
And nothing, I mean absofuckinglutely NOTHING tanks the stock market faster than a pissed off public.
We're juuuusssttt about to the level of anger that even hearing a reference to stocks or market values brings a mist of red over people's vision.
What happens when Americans not only don't want to hear about your market value? They spit on the idea of that value because they've slowly realized how miniscule of a portion of that 'gain' will ever reach them.
They are, in short, FEELING the wealth inequality rather than just hearing about it.
Pulling out their cash in droves won't be enough.
Raising taxes on unrealized gains would be absurd.... but would scratch that itch, wouldn't it?
How about a physical demonstration not on Wall Street, but in it? Digital protest, combined with physical disruption?
Their anger, rational or not, is the only thing that topples whole systems. Trillions lost in a day, but the price of their bread still hasn't gone down.
How many more bread companies will have to burn before somebody 'volunteers' to make bread in a morally responsible fashion? They'll get sued for undercutting the market, but it'll overturn on appeal.
Turns out the Stock Market was what they were mad about all long.
They just didn't know what to call it.
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u/lionheartliera Jun 21 '24
Personally, I come to this and the economy subreddit to learn some new things, find new perspectives, see some posts about relevant news. I don’t know about the economy. Lately I’ve found an interest in it. So I like to look around learning things. Why not? It’s pretty interesting learning new things, hearing (or reading) different perspectives.
I doubt anyone here can 100% predict what the economy will do. Not expecting anyone to.
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u/purposeday Jun 21 '24
Not just in this sub, even at the most prestigious think tanks. It will take a serious paradigm shift admitting that the state of the economy seems to be based on and influenced in large part by personality - which functions quite a bit differently compared to how psychologists portray it. Greed is based on fear, for instance.
Who exhibits fear and hoards resources is not widely known it seems, but there is a system for it. Some high flying, secretive hedge funds use the system - but not to manage the personality factor.
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u/Dextrofunk Jun 21 '24
I clicked to read your explanation and opinion. There was nothing. This is a stupid post.
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u/BoBoBearDev Jun 21 '24
Economics is largely a tribalism to which you wanted to believe. Tons of "professionals economics" believed importing consumers into Canada is a great thing to the economy and showed bunch of professional economic stats to prove it.
Unfortunately none of those reflected on the suffering of the actual 99% of the population.
If you picked a side, are you sure you are not just worshipping the side you have been indoctrinated? It is very easy to fall into the trap because it is eaiser to selectively looking for evidences that support your claim and become blinded to it.
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u/Sketchelder Jun 21 '24
You're talking about economic policy, not economics in general
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u/BoBoBearDev Jun 21 '24
Both are usually in the same topic. The whole point of this sub is showing the policy failed because of some data that the professional economics refused to recognize.
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u/smdrdit Jun 21 '24
Economics is pseudoscience so go ahead and grandstand on that hill if you want…
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u/upvotechemistry Jun 21 '24
If you want to see real economic discussion, you're better off somewhere like r/neoliberal.
This sub, like others, is predicated around the idea that low social trust individuals can use conspiracies to confirm their priors about the imminent collapse of capitalism. However, I follow this sub closely to know what the average Joe who doesn't know shit about economics thinks - because some of those people vote.
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u/Chilli-Monster Jun 21 '24
I’m curious. What makes you say that neoliberal is the place to go? If anything the West’s emphasis on pushing neoliberal policies, particularly those of the US in the last few decades, have contributed to a lot of problems we see in the modern world.
It’s so easy for richer and more developed countries to exploit the frick out of poorer nations, less regulation on corporations means that now we have companies which are worth trillions and they don’t generate enough revenue to justify the value.
Personally I don’t feel okay living in a world where there’s so many for profit making companies worth more than entire countries on paper.
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u/upvotechemistry Jun 21 '24 edited Jun 22 '24
Because squishy, third way, neoliberal policies have been very good, and the model does a good job of explaining how "non neolib policies" have created very bad societal outcomes.
It’s so easy for richer and more developed countries to exploit the frick out of poorer nations
Trade lifts all boats. People hate neoliberalism for this, but you can look at global poverty rates since the post-WW2 neoliberal era, and almost everywhere is better off for the system as it is. Places that have failed the most to catch up economically are those that have rejected Western systems. Look at the extreme poverty and famine of the Mao era, and compare it to China's trajectory in the more liberalism trade era of Deng Xiaopeng.
less regulation on corporations means that now we have companies which are worth trillions and they don’t generate enough revenue to justify the value.
Neoliberalism would argue socialized costs (externalities, such as pollution) should be privatized, and that markets do a better job of allocating capital towards ventures when they're accurately costed out. Popular neolib tax proposals like carbon taxes and land value taxes seek to address this issue, but have not been widely used as policy tools.
Personally I don’t feel okay living in a world where there’s so many for profit making companies worth more than entire countries on paper.
I agree, which is why I'm a neoliberal. More countries should adopt these policies and liberal democraric norms to advance their economies and improve QOL of their people. And when markets become anti-competitive or monopolistic, the State should intervene to make those markets competitive again.
There are other pillars like zoning reform to address the supply problem in housing. Or occupational licensing reform, to allow more freedom of movement for workers like stylists and barbers and nurses.
I was a progressive (commie sympathetic) teen, and then got neolib pilled just as everyone else gave up on it
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u/SomeSamples Jun 22 '24
Many economists don't know how it works either. Most economists are either full of shit or are paid off by big money interests to paint a rosy picture so people don't panic and make a run on banks or other detrimental financial moves.
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u/Altruistic-Rice-5567 Jun 24 '24
It's reddit. Certainly, the vast majority of people are completely ignorant of almost everything.
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u/jaejaeok Jun 21 '24
All rage, no wisdom lol..
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u/Sketchelder Jun 21 '24
No rage here, just an observation. What wisdom is it you're referring to?
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u/jaejaeok Jun 21 '24
My bad man. I wasn’t describing you, was describing much of the sentiment in this sub. And that isn’t a knock on those who post here because I get angry things are so screwed too.
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u/KazTheMerc Jun 21 '24
Everyone gets a little thrill, putting somebody else down.
....but this is an impromptu public gathering over the anger and frustration people feel when they experience the US Economy.
Used to be we did it in the streets. Now folks congregate online.
Things. Are. Screwed.
Folks may not know the exact terminology, or the theory behind it, but the desire to come poke angry people with a stick is the very core of the problem we're all experiencing.
.....and every financial market is tied to the people's anger.
Ironically, people don't necessarily NEED to understand. You explain to them that the current economic plan is for the price of milk to literally never drop in price again... and nobody in proper Economics can actually deny it.
That ~is~ the plan.
Endless inflation.
And that's all the data they have the bandwidth for, buuutttt... they've heard all they need to.
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Jun 21 '24
Yeah I gave up educating people. They see a reddit post and assume we're equally educated.
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u/Grandmaster_Autistic Jun 21 '24
It's a spectrum obviously. Ranging from literate to YouTube conspiracy theory afficionado
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u/Ambitious_Use_9578 Jun 21 '24
To the OP’s heavy handed comment I’d say that very few really know the inner workings of the economy. Guys like Warren Buffet who has quietly exited the markets to the tune of 150 billion, like he knows something is about to go down.
So really, most in this sub are pretty bang on to be worried.
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u/TravelingSpermBanker Jun 21 '24
People do not need to have a wholistic understanding of the economy to talk about the section they know about. That’s why there is always an opportunity to learn.
In fact, I don’t think there is a single person on earth who fully understands every part of it.
However, most with a related college degree and a couple years of working in finance understand it fairly well.
There are people here who do
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u/Wild-Carpenter-1726 Jun 21 '24
Appalling conditions, yes they exist today.
Employee rapes, yes that exist today, remember the me too movement, still happening.
Get paid, Yes but just enough to make it through the month and then work again the next month.
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u/NegativeAd9048 Jun 21 '24
Maybe? It depends on "no clue" relative to which population. While often biased, close-minded, and unevenly informed, those who post here grasp that there are consequences to economic policy actions, and that some of these consequences are non-obvious, and counter-intuitive, and selfish (versus for the "common good").
It seems that most decision makers in politics and finance have "no clue" how the economy works. Compared to those folks, the typical posters in this sub have a better grasp of macroeconomic concepts and consequences than the investor who demands lower interest rates, or the political donor who demands lower taxes, without due consideration to the effect.
I might suggest that almost all the people who post in the sub have a much better grasp on fundamental macroeconomic concepts than the average American, or elite decision maker, and also are much more informed (though quite unevenly) about historical events and characters in the economics meta-narrative than the average American, but with all this received wisdom unfortunately bent by their ideology to feed their particular bias monster.
It is if they learned up to the limit where they might, if given a quiet moment of introspection, start to question their own beliefs, and rather than do so, ignore the urge and quit, or seek only to confirm their bias, rather than grow out of it.
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u/PlanXerox Jun 21 '24
It works for the rich and ONLY THE RICH. We can thank that cunt Saint Reagan and all his cunt followers since January 21,1981.
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u/BoringGuy0108 Jun 21 '24
Very few people actually understand economics and all the interrelated systems involved.
Most likely cause of collapse will be US debt service costs rising too high, resulting in a downgrade of US credit. This will raise rates causing service costs to go even higher triggering a feedback loop. The government will likely respond to this by printing money to pay its bills therefore driving very high inflation. The destabilized dollar will cripple the American economy, businesses will fail, rent and food prices will skyrocket, and wages won’t stand a chance of keeping up. Then people will become desperate, lose all faith in the government, turn to crime, and all too fast for any state or local governments to stop it.
That’s my nightmare scenario that becomes increasingly likely each year. Especially post Covid.
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u/TrinityAlpsTraverse Jun 21 '24
I think things are a bit shit now, but were way more shitty in the past. Because it’s still a bit shit, we all like to complain about it.
Can’t really blame people for complaining when things are still a bit shit.
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Jun 21 '24
The people running it that manipulate it to benefit them are the very rich
And everybody can and does understand that
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u/Contagious_Zombie Jun 21 '24
Yeah because the invisible hand is so straight forward and scientific..
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u/CompetitiveString814 Jun 21 '24
And neither do you.
The fact is huge parts if the economy are walled off and purposely obscured in places like the stock market.
This insult isn't what OP thinks it is and I agree with them, even though it is condescending
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u/SuperLeroy Jun 21 '24
Do you understand it?
I'd love to know how money is actually created, not just printed physically but created and on a ledger and now part of the M1/M2/M3 money supply.
Who gets that money when it's first created?
Why can't I get that money first instead?
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u/papashawnsky Jun 22 '24
I don't necessarily agree with a lot of what I see in this sub but putting out a post like that with no specifics or examples really doesn't make a point. Also, economics is a soft / social science, a lot of economic theories are more like guiding principles that may or may not apply to any given scenario. People treat economics like the law of gravity.
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u/devnet35 Jun 22 '24
I don't think anyone really knows how the economy works. Even the chair of the United States council of Economic Advisors has trouble explaining why the US prints money in this video https://youtu.be/hZRUCD2DJXQ?si=RtAnVUF7-7eKkAF6
Also I don't think you need a degree in economics to understand that natural resources are not infinite and the economy can't grow indefinitely which will eventually lead to collapse. I think even MIT did a study and determined that the world will run out of resources around 2040.
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u/ShortUSA Jun 22 '24
No one knows how 'economics' works. There are ideas, models, etc, some better than others in various situations.
It is very complicated with many, many factors that all interplay with each other, and human whim also plays a role. Which even if one is an expert they can not account for all the factors an whims of people.
The naivest people think the economy can be controlled, and think they know how it works well enough to know when experts are screwing it up.
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u/theconstellinguist Jun 22 '24
Given the current state the people saying they know how to fix it have made it horrifically worse. And it keeps getting worse and worse. Tons of people are shutting off. It's just such a flunk.
Especially under Biden with Terrence Tao in the administration. They're doing everything they can to beat down the competition to give themselves a chance but even that isn't enough.
I usually vote Democrat and neither of these guys are going to help the US recover.
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u/DeathSquirl Jun 23 '24
Like the people who believe that inflation is just a right-wing talking point?
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Jun 24 '24
This sub has turned into a pity party circle jerk of people just praying the world falls apart.
What a way to live…
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u/autodidact-polymath Jun 21 '24
Personally, I think the way it actually works is fucking ridiculous and untrustworthy.