It can't, that's the problem. One of the biggest challenged associated with the power grid is that electrical energy cannot be stored in significant quantities for any remotely reasonable price. If it could, well, that would be HUGE.

I'll never understand the thinking that everyone can't have access to a livelihood.

Seems to me like that should be priority one for any economy, but ours obviously prioritizes an extra ferrari for executives and cheaper ipods over the poor.

Again: if you think these experiments made such shallow observations of authority/subordination your opinion is, quite frankly, uneducated.

It's called a case study, which is a very basic research strategy in the social sciences. You're correct that one case cannot be used to prove generalizations about all cases, but it is completely reasonable to make hypotheses because there is no evidence that the New Orleans police is an outlier case. I guess in order to prove such a hypothesis we'd need, like, a human experiment or something. ....Oh, wait.

Unless the very broad point you're making is that you get off on namedropping science when you don't even understand why something you're citing has a flawed methodology, no, the CPI is not sufficient.

Virtually every country on Earth has strong laws against bribery, yet in many countries it is culturally acceptable - if not required - that one bribe government officials and police officers. We consider bribery a form of corruption, but would the citizens of that country? The goal of enforcing the law without abusing authority is clearly orthogonal to the goal of enforcing the law within the framework of that culture.

Moral relativism is most certainly relevant when you're talking SCIENTIFICIALLY about such things. Isn't this what you criticized me for doing?

That's right. **** off.

Well, the real problem is... what do people have to contribute to society to get it? There are a lot of kids who would be completely satisfied with a subsistence income if they didn't have to do anything to get it. The UK is a pretty good case study of this sort of policy. The poors in the UK basically get a guaranteed living wage income, and it's created a socially-disruptive underclass of citizen without the skills or desire to do anything other than breed or smash windows.

We see a smaller version of this problem whenever we raise our minimum wage. In addition to driving inflation, the minimum wage increases the opportunity cost of finishing high school. So, you have to be really careful when you throw free money at people.

Let's helicopter everybody 30,000 dollars. What do you think will happen to prices of goods now that everyone has at least 30,000 dollars. Answering that question is basically as far as you need to go to realize how awful of an idea it is. It would help nobody, including the people you just gave 30k too. Not to mention, if you start only giving it to people without a job, you will have a large sector of the public making a lot more money than those who have even good jobs. Class animosity anyone?

Anyways, Jon'C nailed it, especially the social aspect of it (which I think might be the MORE important part).

But then you're taking it to the extreme.

Here in The Netherlands everyone has the right to a livelihood and we're hardly living in communist China. All kinds of conditions apply of course, like having to apply for jobs. And it works. Granted, there was more abuse way back when regulation was very loose, but even then it worked.

And don't think these people living on the bare minimum can do anything they want with their money. They'll be very poor, but at least have shelter, food and energy.

Oh, I know I'm taking it to the extreme. I'm just using the 20/hr living wage figure that the poster in that forum said. And I'm unsure why people are forgetting the fact that the US does have a pretty decent welfare/unemployment package. Currently you can claim unemployment for almost 2 years, I think? Just like yours, there is minor abuse, but on aggregate I'm sure people use it for what it's needed for.

I make almost around 20/hr, and my lifestyle would show that someone can live WAY beyond the minimum with that kind of money. The problem in the US right now isn't that unemployment/welfare suck. It's that finding a job sucks. Raising the minimum wage to 20/hr would not help that situation, at all. That is a MASSIVE short-term disruption, especially since wages are often bargained in contracts. Not to mention throw inflation in, and you've got a cluster****.

We already have that, we just call it welfare and food stamps and wic.

And lowering the minimum wage also wouldn't change the job market in any meaningful way. Getting rid of payroll taxes could.

You need to be much more clear about this. Are you talking about income tax [withholding] or are you talking about taxes directly applied to employers?

How is it better to basically waste a lot of time with jobs that aren't entirely necessary? When people start talking about making jobs just to make jobs, that's a problem, isn't it? Not everyone needs to work to keep humanity fed and sheltered--the subsistence stuff. There just isn't enough of that work to go around. So what exactly is wrong with subsistence living, even if it's free? It's not exactly glorious; most people will opt not to do it.

I've never understood why we don't separate the two economies; why not set up a system whereby people work in agriculture and other necessary infrastructure for subsistence during the prime of their lives, say, during their early twenties, in return for a lifetime of subsistence. That way, jealous people can't claim you're some sort of mooch, and it would also be much easier to keep the gains from increases in productivity. What I mean by that last part is: we still work as long, if not longer, as we did 50 years ago, yet our purchasing power is seemingly less. Why didn't the increase in productivity give us anything meaningful? With the subsistence economy I described earlier, the amount of time that had to be served would always go down, never up, as productivity increases.

Then of course there would be that other cutthroat economy that was blindly devoted to productivism, but it would be entirely voluntary.

Because of those things mscbuck and I posted. The part that might be hard to understand is that everything you do has a cost associated with it which is, psychologically speaking, completely divorced from the dollar-cost people usually think about. It's called opportunity cost; it's basically a way of measuring how much utility (benefit) you are getting out of something over the next best option. These costs are relative, and for some people instant gratification is worth a lot more than the chance of a larger long-term benefit. It's really just a question of how many of these people you'd like to have in your neighborhood. Especially on the weekday nights, when their friends are busy with homework, and they can't afford entertainment.

(This would also cause hyperinflation. Exercise: why? Consider the reciprocal effect on the minimum wage and on essential goods.)

This is called a pension.

Purchasing power has increased over the past 40 years or so, but it hasn't kept pace with increases in productivity. I don't know the precise reasons behind this, but I speculate that it's due to the income gap and debt-driven inflation.

There can never be such a thing as two "separate" economies.

that would never work. you would literally have to split them into two countries.
if they were two seperate economies how long do you really think it would take for the "subsistance" living people to take a look over the fence at the "cutthroat" economy that has rich people and all kinds of expensive toys, how long would it take till they begin to say "Hey! where is our piece of that pie?!? we have just as much right to that as they do!"? Not very long at all.
also who is going to pay for the subsistance people one they are out of their "prime" lets say someone in that economy would work from 20-35? thats 15 years... lets say the average person lives to 75, that 40 years of subsintant, yet dependant living. at any given time there would be 2 or 3 times as many people living off this bizarre pension system as people working to support it. how is that going to be paid for? are you going to make the cutthroat economy pay for it? because then your right back with the "jealous people" claiming "you're some sort of mooch"

It doesn't matter if there are 3 times as many people living off the pension system as there are people working to support it. I suspect that number would actually be much higher. Only 10% of Americans work in agriculture, but 100% of us eat. We could do it that way, or.. 100% of Americans could work in agriculture for 10% of the time.


As productivity increases, ipods are made with fewer ergs of energy, using fewer materials, and having greater capabilities.

As productivity increases, why don't pensions become bigger and cover a longer period of time?

We could just sell the damn country to europe

Yeah, except that it will take what, maybe a week for the cutthroat economy to figure out it can produce it's own agricultural sector for less and not have to support that ridiculous pension.

Freelancer, you have a lot of bad ideas. That's not a bad thing; it means you're thinking about the subject. It would just be a lot more efficient for us if you took an introductory microeconomics course.

The reason we don't do "x, y% of the time" for all "x" is because of comparative advantage. It's an important concept and you should read about it. It's why humans evolved systems of barter in the first place.

Because 401(k)s are a more efficient deferral of your income than a traditional pension (although with more personal risk,) and unlike pensions they cost the employer almost nothing to manage.

Once again, I gotta name drop JonC for being right. Keeps stealing my thunder

Freelancer, i believer 3% of our labor sector right now is involved in the agriculture/raw materials sector. Forcing this to 10% is allocating resources to where they are not valued. And the reason I can say that with 100% certainty is that subsidies/tariffs already make America produce way more food than it actually should.

Forcing this to ten percent basically violates any laws of comparative advantage, which in economics, assuming rather free mobility, is as close to "fact" as any other topic in the field. Other countries at this point produce food with a much lower opportunity cost than we do. If we were to trade with them, we'd get more food, and more of whatever good we produce. This is good for EVERYONE. Now don't get me wrong, there are infant industry arguments for getting rid of trade, but it doesn't work with agriculture. At this point, all the developing world has is the agriculture sector and we are decimating it by artificially lowering prices here in America and Europe to keep our farmers happy.

Honestly, it would probably be less distortionary if we just paid people to dig ditches. But we still run into the inflation problem.

And even if you kept it at 3%, it would still be allocating resources terribly inefficiently.

That's not saying it would cause a food shortage. It could be that a lot of Americans are really good farmers and don't even know it (they have an absolute advantage over farmers) and you end up with even more food than you had before. The problem is, they have to sacrifice 3% of their time in order to do it, and that time is going to be a lot more valuable to the economy if it is spent elsewhere. People who suck are still important to the economy.

Edit: Yeah, to really understand this, you need to have a really strong grasp of opportunity cost. Just take a microeconomics course. It'll change the way you think about a lot of stuff.

Meh. I think the 'point' is a little misguided. Who cares about overbearing efficiency and growth? I'd gladly give up 10, 15% of the efficiency for a slower pace, a little more peace of mind, etc.

Uh, so... what exactly is preventing you from planting a garden?

I don't give a **** about agriculture. If I had to spend 3-15% of my time doing something stupid and pointless instead of getting real work done, the last thing I would be gaining is "peace of mind."

Yeah, well, don't pretend like the current system is any less alienating to some people.

I think the current system where you generally do things at which you are skilled is much less alienating than a system where you do what arbitrary chore Freelancer has decided is good for the soul.

Get rid of the minimum wage and impose a salary cap. This would be enforced for citizens who have never worked in the work force previously. Everyone else would be grandfathered in.

Eliminating Minimum wage:
This will (eventually) allow Americans to be competitive with the rest of the world (mostly Asia). It also helps reverse inflation and create deflation over time. Despite what (corporate endorsed) economists say, deflation is good.

Imposing Salary / Bonus Caps:
It forces companies to do something better with their money then bloated salaries. The other benefit to salary caps, is that (surprisingly) it shouldn't reduce competition at the top, but instead should slow down the act of "Job Hopping for (unjustified/unqualified) Salary Raises".

There could be other benefits, or short comings, but continuing to do the same thing over and over and expecting different results is insanity. Let's try something new and see what happens. No one really knows, so let's try it.

my guess is that some businesses would go along with it, mainly smaller to mid size businesses. and then a lot of the larger corporations would probably go Halliburton on us and move to Dubai.

heh yeah except for the part where holding your money gives you a greater benefit than spending or investing it. Which is to say that, no, deflation is not good.

It's funny how that is so obvious, yet people miss it completely. It just shows that people have no idea what inflation or deflation really mean when it comes to the demand for money holdings.

In fact, in this current situation, mild inflation would be super preferred to get the economy going. Most of the debt you hold is in nominal figures, so mild inflation actually makes it easier to pay off debt.

Inflation is not bad, people, at least not by default. Hyperinflation is bad. A little bit of inflation here and there is not a bad thing, and given the current state of the economy where inflation is hovering around 2% but have very high unemployment, we could use a little. Money is not "easy" right now, and treasury bill yields and mortgage rates will tell you that. That's what makes Rick Perry's "The Fed is treasonous" claim even more laughable.

We need a little inflation right now. We could use a 4% NGDP growth target. More and more economists are coming around to the idea of targeting NGDP growth and using monetary policy and fiscal policy to accommodate, rather than trying to target inflation through interest rates. NGDP growth is an incredibly sound predictor of where the economy is going. It was one of the first signs of the deepening of the crisis.




Again, the US does have welfare, and it does have a very generous unemployment package...A much better idea than forcing people into farming is probably to train them with computers, or skills that are actually IN DEMAND today. I'd rather we make unemployment have some sort of mandatory skill training that you have to go through than just to force people into random sectors. Structural employment is screwing over the 90s generation, and they are trying to catch up.

And Alco, the scenario you play out with minimum wage may give America an ABSOLUTE advantage in producing such unskilled-labor goods, but that does not mean that we would shift our production into that good. Maybe a little, but not as much as you think. There probably would still be countries with a comparative advantage in that good, and it would be best to let them make it and we stick to what we do (again, assuming rather free trade).

One easy way of telling what the government is thinking is by looking at the federal funds rate. The reserve lowers the rate to generate inflation. One of the reasons the economic situation is so perilous right now is because that rate is already very close to 0%, and once it bottoms out the government effectively loses its ability to act against deflation.

Get rid of the minimum wage... to compete with backwards Asian slavery.
Do people actually think this?

Yeah, I've seen some pretty wacky theories about how to get out of the liquidity trap. I've read a rather interesting one from Greg Mankiw which basically states this: Let rates go negative. Nobody will want to deposit into banks (obviously). But, with that, every 2 weeks make every physical dollar bill that ends in serial number "x" (x being whatever) invalid currency. Just FORCE people to start saving/investment , or to just go buy **** to make sure their money doesn't become worthless.

The crazy thing is that Bernanke, every single day, tells the country that they have the tools to get out of the trap. But what we've seen from them so far are just half-assed attempts. Hell, look at these quotes from Bernanke about 12 years ago during the Japan crisis.....



What the hell is Bernanke doing right now? He advised Japan to set a explicit price level target, through more inflation, while they were in their liquidity trap. What the hell does he think we are in now? The Tea Party is not helping the situation. They keep saying "INFLATION IS EVIL INFLATION IS EVIL" when they have absolutely no idea what they are talking about. They are just spooking the nation into economic paralysis.

This sounds like a very good idea if you want mobs of pissed off people storming all 50 state capitols. Besides, good luck getting every single person in the country to play along with denying people the ability to spend their hard-earned money.

Who uses cash any more anyway?

Reading comprehension, Tibby.

Why would they storm the capitol? Who is denying them the ability to spend their cash? If they put it/keep it in banks their money remains safe. If they spend it, their money is spent. Either way, it helps investment, and it helps aggregate demand? It's not like this would be a permanent policy. If they don't spend the money FAST ENOUGH, that's the problem. But like I said, just put it in a bank, and BOOM, you don't lose anything. BTW, the government would announce which bills were going out of currency ahead of time, so it's not like it would just be a rug pulled under from people. I probably should've mentioned that.

I don't advocate this quite yet, because the theory is set-up in a rather simplistic model, but I fail to see why you are saying people would storm the capitols. If anything, they would storm the banks to make sure they keep their money. If you understood the crisis the US is in, you'd see where this has its place. But if you don't get opportunity cost, comparative advantage, or liquidity traps, well, then I'm assuming you don't have any idea and that you think it's ALL WALL STREET'S fault.

I don't think long term deflation would occur. But we need some deflation to get things back in line from all the hyperinflation we've had. We need to get people buying again, going out to eat, etc. Then things should balance out as free market supply and demand starts to work itself out. Also, keep in mind that you can have inflation and deflation at the same time. For example, the housing market is experiencing deflation while food costs are experiencing inflation.

Obviously, it doesn't matter what rules and regulation are in place. If people and businesses are not responsible with how they manage their money, then we're going to end up right back in the same place again.

No. No no no no no no no no no. Jesus christ, did you read ANYTHING of the above that JonC or I posted?

Deflation does NOT help debt. Deflation does NOT increase output (of which we are at a HUGE shortfall right now). Deflation does not help business in this environment with AD shortfalls and structural unemployment.

Just because the standard macro model that I'm sure you learned in Intro to Macroeconomics says that low interest rates = easy money, does not mean it is happening. Go look at bond yields. Tell me that investors are expecting inflation with a straight face.

I meant the "every 2 weeks make every physical dollar bill that ends in serial number "x"" part, nobody uses cash money any more so this would be moot.

Even mild inflation is bad when wages don't rise to match it. Everything gets more expensive, and the working class is paid exactly the same. That's why we have protests. It's not because of inflation, it's because of stagnant wages.

Further, the real reason 'the government' likes inflation is because it devalues the national debt. They don't actually care what happens to joe blow and his mortgage.

I'm just a nobody chiming in to say that I use cash-money. There are entire "industries" of people that still use cash. Think of how many people out there receive tips for a living. For many, cash is the majority of their earnings. When the unemployment rate is high, I can only assume that more people are working "menial" jobs, thus even more people are probably receiving cash than in times when said rate is better. In times like this there are also a lot of people doing work "under-the-table" in order to put a little extra food "on-the-table". The college student that started sucking dicks (wow, not censored...not that I'm complaining) & cleaning people's homes is likely to not have direct deposit.

I see now. Like many people, you guys seem to think this thing can be fixed on the micro level. I beg to differ. Obviously, depending on what side of the fence you are on, deflation or inflation is going to help or hurt you.

I could care less about debt. I could care less about interest rates. I could care less about loans. I'm strictly talking about the buying power of the country currencies. The system is so broken, we need to get the currencies stabilized first. Everything else is secondary at this point.

Ugh, you orthodox simpletons just don't understand.