More money in the hands of the consumer increases demand...

[ludin]

Doing that alone, however, increases the deficit.

it can however with more people spending money it means more people working which means more taxes.

 

[ludin]

The price of oil is determined by how well the company can SELL to our government their need to increase prices.


IE, the only thing that keeps gas from being, say, 5 bucks a gallon, REGARDLESS of supply, or more, is the fact that our government has a large say on the matter, due to the amount of subsidization they offer the industry. Don't play ball, lose the subsidies. That sorta thing. They do this because they NEED gas to be bought by ALL, kept CHEEP, in order to be able to tax the **** OUT OF IT.

A strike provides the PERFECT cover to convense some comity that prices need to creep up a hair. Supply has almost nothing to do with the price of gasoline. Because demand for it will not change, regardless of supply. We have a ton of it, we still need a minimal amount. We have almost none of it, we still need a minimal amount. Oil companies could get away with charging 10 bucks a gallon, just fine.


Are you going to stop driving as a result of gas being 10 bucks a gallon? Gonna ditch your house, move out into the woods?

you really don't know anything about the commodities/futures market do you?

 

[AlabamaPaul]

it can however with more people spending money it means more people working which means more taxes.

Not when the Government is giving back more than what is paid in taxes...

 

[KevinKohler]

So you really believe that our government sets oil and gas prices (beyond any effect that taxes/tax incentives have)?

Yes. They are the ones that APPROVE final price.

 

[KevinKohler]

you really don't know anything about the commodities/futures market do you?

Do explain. Fill me in on all of my short comings on the subject. Otherwise, this is an assumption, and you know what those tend to be, don't you?

 

[SlevinKelevra]

Demand does not cause economic growth. It directs economic growth. An increase in overall demand is only possibly by a preceding increase in the supply of goods and services--in other words, economic growth is what allows society as a whole to demand more than before.

LOL. no. you did not just post this complete cognitive dissonance.

 

[SlevinKelevra]

Yes. They are the ones that APPROVE final price.

1973 called.

 

[SlevinKelevra]

It's all about the "demand participants" not the "job creators"

am I too late to put an IP claim in on this term?
doesn't really show up on google search.

 

[ludin]

Not when the Government is giving back more than what is paid in taxes...

that is only at the end of the year. The government gets a huge tax windfall at throughout the year through the with holding tables.
in general most people pay the maximum in taxes. meaning not only do they pay what they owe but they pay more than what they owe.

few people claim the most exceptions through the year that they can. some people do but then they get hit with a huge tax bill
at the end of the year.

 

[ludin]

Do explain. Fill me in on all of my short comings on the subject. Otherwise, this is an assumption, and you know what those tend to be, don't you?

no you proved that you don't know anything about it with your post.
it is not governments that set the price of oil but the market.

the market sets the price of oil based on future production. so if oil forecasts remain high then the price goes down.
if it remains low then it will go up based on future production.

So if I am investing in oil I am not investing in the price of it now. I am investing in what the price will be 3 or 6 months from now.

Futures Market Definition | Investopedia

government has nothing to do with the price of oil.

 

[JP Hochbaum]

Keynes great contribution, which supply siders reversed in the 70's, was the adherence to demand theory. Well we are seeing the results of supply side, with massive recessions every 5-10 years, compared to none during the 50's and 60's KEynes era of demand side.

 

[ludin]

back to the topic the best way to get more money in the hands of people is to give reasons for companies to pay more.
better tax deductions for pay increases over a certain percentage is one.

I seen no reason as to why corporations pay taxes anyway it seems stupid to me. I would say get rid of the corporate tax all together
and in exchange a over 50% of the money saved must go to employee pay. another 25% must be spent on employee incentives
and the last 25% can be kept by the company.

 

[ludin]

Keynes great contribution, which supply siders reversed in the 70's, was the adherence to demand theory. Well we are seeing the results of supply side, with massive recessions every 5-10 years, compared to none during the 50's and 60's KEynes era of demand side.

recession of
53 - 10 months
58 - 8 months
60 - 10 months
69 - 11 months

there were none again? where are you getting your information from?

 

[JP Hochbaum]

recession of
53 - 10 months
58 - 8 months
60 - 10 months
69 - 11 months

there were none again? where are you getting your information from?

I said massive recessions, not itty bitty ones.

 

[ludin]

I said massive recessions, not itty bitty ones.

those weren't itty bitty ones. they lasted about the average time of a normal recession about a year or close to it.
define massive? anything over a year? the last one was in 1980 over 20 years ago.
the one before that was 1973. 7 years before that.

so again where are you getting your information from?

 

[Lakryte]

So what you are saying is, "If we make it, they will come...."




You're wrong, mate. Just because we make a bunch of ****, doesn't magically put dollars into pockets to buy that ****. FACT.

What I am saying is that you can have all the dollars in the world, but if there is no supply of actual goods and services to exchange them for they will be totally worthless. That is a fact.

 

[Lakryte]

I realize that a lot of people think that, but in the real world, it's not the way things work.

Are you claiming that the only reason more cars were sold in Jan of 2015 is that there was a spike in the production of cars?

No, nor does my argument require that assumption. I did not say an increase in demand for a specific good requires an increase in supply of that specific good. I said an increase in overall demand is only possibly by a preceding increase in the total supply of goods and services.

In my world, a customer comes in and orders something, and I produce it. Same goes for many industries. The toaster oven producer doesn't just randomly produce as many toasters as possible, expecting that if they increase production, they will magically see an increase in sales. It doesn't work like that. The toaster oven company produces all of the toaster ovens that it's customers (the retailers) order. It gauges it's production based on the number of orders that it gets.

Likewise, McDonalds only produces as many hamburgers as are ordered, and the company that makes those frozen meatlike patties, only produces as many as McDonalds orders.

The barber only cuts as many heads as walks into it's shop. The paperclip company only produces as many paperclips as it's retailers order. The computer manufacturer only makes as many computers as it's retailers order.

In the case of trucks, it's being assumed that the reason that the reason that cars sales has increased, is because consumers have a few more bucks in their pockets, and can afford to purchase more cars. Now most likely the inventory of cars declined a tad in January, because this wasn't really expected, so now car producers who are low on inventory will slightly increase production, until their inventory is back at what they believe to be the optimum (profit maximizing) level. Car sales increased, and an increase in production will now likely follow.

Anyone who is involved with the scheduling of production levels would understand this. Businesses don't operate based upon your theories, they operate based upon really life demand and the need to maximize profits. Having warehouses filled full of production which is beyond demand, rarely if ever maximizes profit.

You are correct--the toaster company doesn't just randomly produce as many toasters as it can. Why on earth would they? That doesn't invalidate my original point.

People can only place more orders in the aggregate if the supply of goods and services has increased. Otherwise, their increase in orders for burgers will ultimately come at the expense of a decrease in orders for other goods and services. The barber cuts as many heads as walks into his shop--but the barber had to invest in a chair, scissors, razors, products, and rent space before anyone could walk into his shop and get a haircut. The cow farmer has to raise cows before anyone orders them for slaughter--unless they are willing to wait years for the cows to mature. The toaster makers have to invest in the factory to produce toasters, and the industries that create the materials used to make toasters have to invest in the equipment and labor to extract those materials. All of this happens before any final consumer product is demanded. The same is true of your other examples.

Furthermore, the meat patty company cannot just create as many meat patties as it wants. If the demand for burgers doubled overnight, that would not mean the production of meat patties would double, unless the economy has double the required supply of full grown, read to slaughter cows just sitting idle. You hold the assumption that the supply of final consumer goods can just increase or decrease instantly with the blink of an eye--that is nonsense. The full production process of most consumer goods takes many years.

Car sales have increased because demand has shifted away from oil and towards cars, or to put it another way, because production of oil expanded. Your example ironically demonstrates exactly what I am saying.

 

[JP Hochbaum]

those weren't itty bitty ones. they lasted about the average time of a normal recession about a year or close to it.
define massive? anything over a year? the last one was in 1980 over 20 years ago.
the one before that was 1973. 7 years before that.

so again where are you getting your information from?

Most of the information is in my head but for arguments sake I would say the 1973 recession, the early 80's recession and the most recent one in 2008 would suffice. All of which were massive in terms of years, drop in GDP, and rise in unemployment.

"1973-75 Recession
This period stood apart from many other U.S. recessions as it was marked distinctly by stagflation – the combination of high unemployment and high inflation. The United States faced a surge in oil prices due to OAPEC’s (Organization of Arab Petroleum Exporting Countries) oil embargo, combined with increased spending due to the Vietnam War and a stock market crash after the collapse of the Bretton Woods monetary relation system, officially putting an end to the economic boom which followed WWII. Unemployment peaked at 9% and, although the recession is recognized as having ended in 1975, the country experienced low economic growth for years afterwards.

Early 1980’s Recession
In the late 1970’s, inflation was on the rise in the United States, in part left over from the 1973 recession. As a result, the Federal Reserve tightened monetary policy considerably, in turn causing investment purchases to drop as capital became less available. By winter of 1982, however, inflation continued to drop and unemployment rose for several years.

Current Recession
It is difficult to say whether this current recession will be regarded as one of the worst in American history, but it is certainly shaping up that way. The result of an economy built on overextended consumer credit and risky mortgages, the crisis began in March, 2008 as investment bank Bear Stearns became the first of dozens of major American institutions to fail or be bailed out by the Fed. Bear Stearns would soon be joined by AIG, Lehman Brothers, GM, and Countrywide, to name a few. Unemployment has hovered just below 10% for nearly two years. It remains to be seen whether we are in the midst of a recovery or if this is just the eye of the storm.



Read more: The 13 Worst Recessions, Depressions, and Panics In American History - 24/7 Wall St. The 13 Worst Recessions, Depressions, and Panics In American History - 24/7 Wall St.
Follow us: @247wallst on Twitter | 247wallst on Facebook

 

[ludin]

Most of the information is in my head but for arguments sake I would say the 1973 recession, the early 80's recession and the most recent one in 2008 would suffice. All of which were massive in terms of years, drop in GDP, and rise in unemployment.

"1973-75 Recession
This period stood apart from many other U.S. recessions as it was marked distinctly by stagflation – the combination of high unemployment and high inflation. The United States faced a surge in oil prices due to OAPEC’s (Organization of Arab Petroleum Exporting Countries) oil embargo, combined with increased spending due to the Vietnam War and a stock market crash after the collapse of the Bretton Woods monetary relation system, officially putting an end to the economic boom which followed WWII. Unemployment peaked at 9% and, although the recession is recognized as having ended in 1975, the country experienced low economic growth for years afterwards.

Early 1980’s Recession
In the late 1970’s, inflation was on the rise in the United States, in part left over from the 1973 recession. As a result, the Federal Reserve tightened monetary policy considerably, in turn causing investment purchases to drop as capital became less available. By winter of 1982, however, inflation continued to drop and unemployment rose for several years.

Current Recession
It is difficult to say whether this current recession will be regarded as one of the worst in American history, but it is certainly shaping up that way. The result of an economy built on overextended consumer credit and risky mortgages, the crisis began in March, 2008 as investment bank Bear Stearns became the first of dozens of major American institutions to fail or be bailed out by the Fed. Bear Stearns would soon be joined by AIG, Lehman Brothers, GM, and Countrywide, to name a few. Unemployment has hovered just below 10% for nearly two years. It remains to be seen whether we are in the midst of a recovery or if this is just the eye of the storm.



Read more: The 13 Worst Recessions, Depressions, and Panics In American History - 24/7 Wall St. The 13 Worst Recessions, Depressions, and Panics In American History - 24/7 Wall St.
Follow us: @247wallst on Twitter | 247wallst on Facebook

right so the last massive one was 20 some years ago. not the 5-10 you said.
the one before that was 7.

in between that time we have had multiple small recessions some lasting almost a year.
it seems that the average recession is around 8-11 months.

however in even the 50-60's there were recessions some close to being massive.
it is just a fact of the economy. recessions are supposed to happen in order to clean the economy out of the filth sort of speak.

however we have a to big to fail mentality now that has stopped that from happening.

 

[JP Hochbaum]

right so the last massive one was 20 some years ago. not the 5-10 you said.
the one before that was 7.

in between that time we have had multiple small recessions some lasting almost a year.
it seems that the average recession is around 8-11 months.

however in even the 50-60's there were recessions some close to being massive.
it is just a fact of the economy. recessions are supposed to happen in order to clean the economy out of the filth sort of speak.

however we have a to big to fail mentality now that has stopped that from happening.

I think you are rewriting history here. THe recessions in the 50s and 60s barely make the qualifications of a recession. And the last big recession was 2008. Not sure how you get 20 years ago...

1960 a 1.6% drop in GDP and a peak of 7.1 UE. 10 months

1969 1 .9% dip in GDP and a peak of 6.1 UE. 11 months.

1973 recession a near 7% decline in GDP and a peak of 9% UE. 2 years, and UE never fully recovered to its pre recession levels until 1997!

1980s recession had a dip in GDP of 4% and a peak UE of over 10%, it lasted 2 years as well.

2008 recession is called the GReat Recession for a reason because only the Great Depression dwarfed it in size. 4.9% dip in GDP and 10% plus in UE, still haven't recovered 5 years later.

Keynes recessions averaged a 1.75% dip in GDP and a 6.6 UE rate and average of 10.5 months.

Supply side recessions averaged 5% dip in GDP and 9.75% UE average.

And since we entered into the post Keyenes era we have never reached the levels of 4% UE (for a brief time in the late 1990's). So tell me again how the recessions now aren't far worse???

 

[ludin]

I think you are rewriting history here. THe recessions in the 50s and 60s barely make the qualifications of a recession. And the last big recession was 2008. Not sure how you get 20 years ago...

1960 a 1.6% drop in GDP and a peak of 7.1 UE. 10 months

1969 1 .9% dip in GDP and a peak of 6.1 UE. 11 months.

1973 recession a near 7% decline in GDP and a peak of 9% UE. 2 years, and UE never fully recovered to its pre recession levels until 1997!

1980s recession had a dip in GDP of 4% and a peak UE of over 10%, it lasted 2 years as well.

2008 recession is called the GReat Recession for a reason because only the Great Depression dwarfed it in size. 4.9% dip in GDP and 10% plus in UE, still haven't recovered 5 years later.

Keynes recessions averaged a 1.75% dip in GDP and a 6.6 UE rate and average of 10.5 months.

Supply side recessions averaged 5% dip in GDP and 9.75% UE average.

And since we entered into the post Keyenes era we have never reached the levels of 4% UE (for a brief time in the late 1990's). So tell me again how the recessions now aren't far worse???

They were all recession as they met the definition of a recession and they lasted the average time of a normal recession so it would be you trying to re-write history.
last recession in 2000 lasted about 10 months and fell in line with the other recession so it wasn't massive.

the last massive recession was in 1980 20 year ago.

since that time we have other minor recessions but those are to be expected. the market has to correct itself at some point in time and that is what a recession is.
it is a market correction because it has gotten to far out of line.

the current recessions except for this last one has neither been bad or worse than others.

even during the 50-60's there were recessions lasting up to 8-11 months. so I guess keyenes didn't work then either.
Obama imployed keyenes heavily during this last recession.

the problem is all the money he spent didn't go into the econcomy. it went to government workers and unions.
very little made it into the hands of working people. all those so called shovel ready jobs? never appeared.

he would have been better if he would have sent every American family 2 or 3k dollars.

 

[JP Hochbaum]

They were all recession as they met the definition of a recession and they lasted the average time of a normal recession so it would be you trying to re-write history.
last recession in 2000 lasted about 10 months and fell in line with the other recession so it wasn't massive.

the last massive recession was in 1980 20 year ago.

since that time we have other minor recessions but those are to be expected. the market has to correct itself at some point in time and that is what a recession is.
it is a market correction because it has gotten to far out of line.

the current recessions except for this last one has neither been bad or worse than others.

even during the 50-60's there were recessions lasting up to 8-11 months. so I guess keyenes didn't work then either.
Obama imployed keyenes heavily during this last recession.

the problem is all the money he spent didn't go into the econcomy. it went to government workers and unions.
very little made it into the hands of working people. all those so called shovel ready jobs? never appeared.

he would have been better if he would have sent every American family 2 or 3k dollars.

You are really bad with math and with general acceptance of facts here. I could see this discussion is better served being ignored from here on out.

 

[ludin]

You are really bad with math and with general acceptance of facts here. I could see this discussion is better served being ignored from here on out.

IE you can't refute facts and want to make up your own. when called out on making up your own facts instead of admitting you were wrong. you pitch a fit.
sorry history proves you wrong.

I am not the one bad at math.

you claimed we have a massive recession every 5-10 years.
you then defined a massive recession as anything over 1 year.

other than the 2008 recession the last massive recession was in 1980. 20+ years ago.
the one before that was in 1973 7 years before that.

during the 1950-60's there were at least 4 or 5 recessions that lasted anywhere from 8-11 months.
so the only one bad at math here is you.

you made claims that proved to be wrong and I simply called you out on it.
you then accuse me of re-writing history. when in fact I posted history.

you then project your lack of knowledge on me. have a nice day.

 

[JP Hochbaum]

IE you can't refute facts and want to make up your own. when called out on making up your own facts instead of admitting you were wrong. you pitch a fit.
sorry history proves you wrong.

I didn't make up any facts. All the recession data I posted could be found anywhere. I have posted numerous links showing you where to find it.

Demand side era:

1960 a 1.6% drop in GDP and a peak of 7.1 UE. 10 months

1969 1 .9% dip in GDP and a peak of 6.1 UE. 11 months.

Supply Side era:

1973 recession a near 7% decline in GDP and a peak of 9% UE. 2 years, and UE never fully recovered to its pre recession levels until 1997!

1980s recession had a dip in GDP of 4% and a peak UE of over 10%, it lasted 2 years as well.

2008 recession is called the GReat Recession for a reason because only the Great Depression dwarfed it in size. 4.9% dip in GDP and 10% plus in UE, still haven’t recovered 5 years later.

Demand side recessions averaged a 1.75% dip in GDP and a 6.6 UE rate and average of 10.5 months.

Supply side recessions averaged 5% dip in GDP and 9.75% UE average. average over 2 years duration

And since we entered into the post Keynes era we have never reached the levels of 4% UE (for a brief time in the late 1990’s).

Please explain which of the above is "made up".

 

[ludin]

I didn't make up any facts. All the recession data I posted could be found anywhere. I have posted numerous links showing you where to find it.

Demand side era:

1960 a 1.6% drop in GDP and a peak of 7.1 UE. 10 months

1969 1 .9% dip in GDP and a peak of 6.1 UE. 11 months.

Supply Side era:

1973 recession a near 7% decline in GDP and a peak of 9% UE. 2 years, and UE never fully recovered to its pre recession levels until 1997!

1980s recession had a dip in GDP of 4% and a peak UE of over 10%, it lasted 2 years as well.

2008 recession is called the GReat Recession for a reason because only the Great Depression dwarfed it in size. 4.9% dip in GDP and 10% plus in UE, still haven’t recovered 5 years later.

Demand side recessions averaged a 1.75% dip in GDP and a 6.6 UE rate and average of 10.5 months.

Supply side recessions averaged 5% dip in GDP and 9.75% UE average. average over 2 years duration

And since we entered into the post Keynes era we have never reached the levels of 4% UE (for a brief time in the late 1990’s).

Please explain which of the above is "made up".

I already did you cut my post in half to be dishonest. so you lose.