Unemployed?

I PM'd him because political topics are not welcome in this establishment. And, also, more or less off topic, although we're drifting awful close while discussing the economic effects of tax policy.

 

It's a bummer that the two are so closely intwined. But I can respect your decision to obey the forum rules.

Attempting to get back on-topic, I think we can all to a degree concur with the fact that there are inefficiencies in the government -- coming in many forms.

My query, however lies in whether a decrease in spending correlates directly to increased unemployment (the topic of the thread).

Obviously, paying someone $830,000 (accurate or not is debatable) for washing body parts is outrageous. However, in the case of the $3M for shrimp research, how many people does that employ? Is the savings offset from eliminating that program justifiable for removing the researchers from the workforce? What about projected revenues stemming from the R&D into more economic efficiencies?

I don't know the answers, I'm just asking questions. But I can imagine that if $3M employs ~600 people through various chains, plus added efficiencies down the line, it would be a small drop in the bucket compared to what those folks may or may not cost the taxpayer in the unemployment line with no residual advancements.

I'm sure the answer is somewhere in between.

 

im a volunteer firefighter, i was a probational fire fighter training and responding to calls till i turned 18 and the state of NC gave me my certs

now im 19 and have lots of training and an okay amount of certs (6 off the top of my head) + some that i have 1 or two classes till i finish up or just time

 

Ive been unemployed on and off since 09 .... i work when i can and am always looking cause i want to get the fuck back out of my parents house

Education: 1 B.S., 3 A.A's, 1 A.S. ... there aint nothing

ive driven as far as oregon and arizona for interviews

I agree with those of you who say too many people milk it, a buddy of mine who hasnt worked since feb 09 bitches and its like i tried to hook you up at a spot i was working and you werent having it

I get $165ish a week .... so you bet your ass im looking and id be screwed if my folks didnt put up with me staying here ... hope shit gets better soon i really do .... im lucky though paid truck cash, no debt, etc

 

I've been sucking up unemployment since I got out of the Navy last summer... I did the college thing and all that too. I spent 8 years doing a specialized field in the service and fucked myself for it. None of what I did will apply to a real job and even my degree won't help much as I was a Aeronautical Science major. To work in Aviation your need to be certified by the FAA in whatever your doing. A cert can take up to two years to get by going to school five days a week 5-8 hours a day. Without unemployment many of my fellow vets would be fucked. We need it to get certified and transfer our skills to civilian jobs. My roommate got out of the Airforce after 7 years and has been looking for work for 17 months. He just started rotating tires at Les Schwab cause honestly there literally is nothing else except for food service or brief contract work in a windowless room pressing a button.

 

It usually is.

However, time of high unemployment are NOT when you need to minimize government investment in the private sector.

That said, there's a lot of made up money in this country, and it's a problem. I first read this rant back when the Financial Crisis hit in 2008, and it's one of the better takes on the problem out there.

Basically: There is a LOT of stuff in our system that's really just paper and has no asset value. The only value is that other stock brokers might buy some. When everyone stops pretending CDO and other derivatives are worth something, you have a problem. And frankly, no one should've started thinking they were worth something in the first place, because they're debt being used to buy assets, not assets themselves.

Here you go:

 

Sounds like an opening speech to ECON 101...

 

Opening speeches in college classes typically have less cursing.

Aside from that, I enjoyed the tongue-in-cheek tone.

 

OK, a PG version of your quote

 

holy crap

 

Alright so I am back to mess up the thread again but this time I will control myself! Has anyone here heard of fractional reserve lending?

 

do you have a link to the full article/page/blog/whatever jandrews?

 

Yes, it's not all that uncommon. It's legal and is included in the "star" ratings many banks use as an indicator of how sound the bank is... I'm NOT a person who supports growth without equity so I'm not a huge fan of it (even if it's within regulation).

 

You mean banking? Fractional Reserve Lending is how banking works.

You put your money in a bank. The bank loans your money to other people. The other people pay the money back with interest. The bank uses that interest to pay you interest on your money you are keeping in the bank and to make a profit. Repeat.

That is Fractional Reserve Lending. It is basically how 99% of banks operate (in simplified terms) The only reason it has a name is because there have been enough instances of banks not keeping enough cash on hand to supply their customers when they came for withdrawals. Think "It's A Wonderful Life."

 

Banks only have to have a fraction of what they loan out but, I think what he's referring to is the banks loaning other banks cash as seed money to get to use as their own fraction to procure more funding.

 

What I have learned is that banks loan out more than 10-50 times their holdings. In fact...that is where the scam lyes with the bailout money apparently. The banks were going under because they lost all of their money on paper. We then sent them billions in hard cash! If I am wrong about any part of this ...please enlighten me! I would rather know the real truth

 

No that seems right.

The concept you are talking about is called "money multiplying." In a nutshell, it operates around the concept of standard banking but then expands the amount they loan out based upon the total amount of assets they possess.

For example:

Say a bank has $1M in hard cash. By law, they need to hold onto 10% of that for insurance (FDIC and whatnot) purposes.

So that gives them $900,000 to play with. Now, instead of loaning out that $900,000 to people and collecting the interest, they break it up into segments of 10% to cover their insurance legalities. Now, for every $90,000 they have, they can loan out $900,000, because they have the 10% fallback.

So essentially, the bank is able to make loans of $9M while only having $1M in its possession. So basically they've just imagined $8M that doesn't actually exist anywhere until all their debtors pay full.

I know this is oversimplifying, but I hope you get the idea.

As for the bailout funds. Basically, all these debtors began defaulting on their loans, and so the banks were running out of their $1M reserve because SOMEBODY has to pay for the goods and services bought on that credit. So when they got the bailout, they sit on it in a means of returning to traditional banking methods of having reserves and solidifying their base. People complain that they are getting all this money but not loosening credit, but really all they are doing is ceasing to participate in the unhealthy practices they were engaging in before.

Now, ideally, what SHOULD have happened is that the banks that made these money-multiplied loans should have had to fail and sell off their assets to cover their debts. But when you are talking about banks like BoA and Goldman Sachs and Chase and whatnot, who control such a vast amount of the nation's debt (mortgages, business loans, car loans, credit cards, etc.) you can't just let them die because then the manufacturers and dealers and everyone who sold their goods and services are expecting to get paid.

So then what do you do? You can't let them fail and absolutely crush the economy. But if you bail them out, they'll return to traditional banking philosophies and stagnate the economy by tightening credit (which they should have done all along). So you have a choice between bad or worse.

 

That was actually the most simple yet eloquent interpretation that I have ever heard on that topic! I truly thank you for it!