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PoliGAF 2013 |OT2| Worth 77% of OT1

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empty vessel

empty vessel

Member
Oblivion said:
Wait, what?
Click to expand...

The money multiplier is doctrine in which the money supply (which includes bank money, i.e., demand deposits) is thought to grow based on the amount of currency and reserves (base money or high powered money or state money) in the system and fractional reserve banking:

The way this multiplier is alleged to work is explained as follows (assuming the bank is required to hold 10 per cent of all deposits as reserves):

  • A person deposits say $100 in a bank.
  • To make money, the bank then loans the remaining $90 to a customer.
  • They spend the money and the recipient of the funds deposits it with their bank.
  • That bank then lends 0.9 times $90 = $81 (keeping 0.10 in reserve as required).
  • And so on until the loans become so small that they dissolve to zero …
Click to expand...

It incorrectly assumes that bank lending is constrained by reserves and fails to account for the fact that reserves are added to the system by the Fed when aggregate reserves are inadequate. So far from the money supply being some multiple of the amount of base money in the system, it is really simply determined by the demand for money.

Here's a better explanation:

http://bilbo.economicoutlook.net/blog/?p=1623

And here's an empirical Federal Reserve paper:

http://www.federalreserve.gov/pubs/feds/2010/201041/201041pap.pdf

Excerpt:

The effect of reserve balances in simple macroeconomic models often comes through the money multiplier, affecting the money supply and the amount of bank lending in the economy. Most models currently used for macroeconomic policy analysis, however, either exclude money or model money demand as entirely endogenous, thus precluding any causal role for reserves and money. Nevertheless, some academic research and many textbooks continue to use the money multiplier concept in discussions of money. ...

Since 2008, the Federal Reserve has supplied an enormous quantity of reserve balances relative to historical levels as a result of a set of nontraditional policy actions. These actions were taken to stabilize short-term funding markets and to provide additional monetary policy stimulus at a time when the federal funds rate was at its effective lower bound. The question arises whether or not this unprecedented rise in reserve balances ought to lead to a sharp rise in money and lending. The results in this paper suggest that the quantity of reserve balances itself is not likely to trigger a rapid increase in lending. To be sure, the low level of interest rates could stimulate demand for loans and lead to increased lending, but the narrow, textbook money multiplier does not appear to be a useful means of assessing the implications of monetary policy for future money growth or bank lending.
Click to expand...
 
bengraven

bengraven

Member
God, I was forced to listen to Fox News for five minutes and within five minutes I heard

- "some people are saying..." (WHO?)
- "...who is protecting American interests in Egypt?" (is that what this rebellion is really about?)
- "they want Christians out of the Middle East...that's what this is all about". Oh thanks for clearing it up.
 
T

Tamanon

Banned
There is nothing more boring and annoying than going with someone to shop for lingerie. Most of the time you're trying to figure out where you're supposed to be looking when not actively conversing with your girlfriend. Especially when it starts coming down to banal decisions.

I usually take that opportunity to go outside somewhere, maybe go get a pretzel.
 
B

bananas

Banned
Conservatives Revolt As GOP Tries To Calm Obamacare Shutdown Mania

Conservative anxieties over the Affordable Care Act are reaching a boil as the law’s major provisions are set to take effect in the coming months. And an all-out grassroots mobilization during the month-long August recess by wealthy right-leaning groups like FreedomWorks and Heritage Action appears to be having an impact. Republican lawmakers have said their constituents are demanding they hold the line.
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OHzgPNf.gif
 
O

Oblivion

Fetishing muscular manly men in skintight hosery
empty vessel said:
The money multiplier is doctrine in which the money supply (which includes bank money, i.e., demand deposits) is thought to grow based on the amount of currency and reserves (base money or high powered money or state money) in the system and fractional reserve banking:



It assumes that bank lending is constrained by reserves and fails to account for the fact that reserves are added to the system by the Fed when aggregate reserves are inadequate. So far from the money supply being some multiple of the amount of base money in the system, it is really simply determined by the demand for money.

Here's a better explanation:

http://bilbo.economicoutlook.net/blog/?p=1623

And here's an empirical Federal Reserve paper:

http://www.federalreserve.gov/pubs/feds/2010/201041/201041pap.pdf

Excerpt:
Click to expand...

Huh...that's pretty interesting and surprising, because unless I'm mistaken, even Keynes believed in the multiplier concept.


On an unrelated note, do current medicare taxes go to fund current medicare beneficiaries (in the same way that SS does)?
 
empty vessel

empty vessel

Member
Oblivion said:
On an unrelated note, do current medicare taxes go to fund current medicare beneficiaries (in the same way that SS does)?
Click to expand...

You're trying to start another fight, aren't you?

First, there is no good reason to track money like this. Money in the government's hands effectively ceases to exist at all. So no taxes go to fund anything. Taxes just come in and disappear. All acts of government spending are ex nihilo.

Of course, the government can use accounting to make it look like taxes fund spending, and that is what we have. The government does account for some Medicare payments with Medicare taxes. But not all of it. Medicare is partially accounted for (but not paid for) via general revenue taxes also.
 
M

Mario

Sidhe / PikPok
T

TacticalFox88

Banned
APKmetsfan said:
Its reddit. A lot of that stuff is known but exaggerated with their trademark outrage about how this world sucks.

Some of it too is probably lies. Never trust random people on the internet.
Click to expand...

Even assuming only 5 percent is true, that's still five percent of ridiculously fucked up shit.
 
B

bananas

Banned
Just started listening to The Center Holds audiobook.

Only a few chapters in, and, so far, I feel it's a really good explanation of the politics of both parties during Obama's first term. Really enjoying it.

One thing that sticks out so much is how effective the Tea Party was for Republicans in 2010, and how it's been biting them in the ass ever since.
 
T

thepotatoman

Unconfirmed Member
bengraven said:
God, I was forced to listen to Fox News for five minutes and within five minutes I heard

- "some people are saying..." (WHO?)
- "...who is protecting American interests in Egypt?" (is that what this rebellion is really about?)
- "they want Christians out of the Middle East...that's what this is all about". Oh thanks for clearing it up.
Click to expand...

Lol. I was wondering what Fox would say about Egypt. The muslim brotherhood sure are evil for causing a coup to overthrow the muslim brotherhood. Maybe if they weren't so evil christians wouldn't have to be massacred at the protests supporting the muslim brotherhood. And their talks about making the mere existence of the muslim brotherhood illegal is just another step towards outright banning christianity.

I can't imagine how fox viewers can parse that the muslim brotherhood is clearly the victim in this case and their opponents are clearly the bad guys, because as much as you may disagree with the muslim brotherhood's politics, it's nothing compared to arresting and massacring your political opponents indiscriminately. How can fox speak about this after basically portraying the muslim brotherhood as Al Qaeda under a different name over the last 2 years?
 
S

Samk

Member
Anyone read This Town by Mark Leibovich yet?

Supposed to be an intimate look at the sort of wealth behind modern politics. I've yet to pick it up.
 
H

Hitokage

Setec Astronomer
At this point it's clear that the Muslim Brotherhood aren't good guys in general, but that doesn't necessarily mean the methods used to oust them were the best and neither are they on the same level as Al Qaeda.

The magic of nuance.
 
O

Oblivion

Fetishing muscular manly men in skintight hosery
Well, this is by far the douchiest thing I've seen in a while (and that's no easy feat):

During a question and answer session at the meeting, Molina stepped up to the microphone and, with a quavering voice, asked, “Mr. DesJarlais, I have papers, but I have a dad who’s undocumented. What can I do to have him stay with me?”

Rather than make any attempt to assuage the girl’s fears, Desjarlais said, “Thank you for being here and thank you for coming forward and speaking,” but “the answer still kind of remains the same, that we have laws and we need to follow those laws and that’s where we’re at.”

The tea party crowd whooped and applauded wildly as the little girl took her seat, head down.
Click to expand...

http://www.rawstory.com/rs/2013/08/...has-to-be-deported-as-tea-party-crowd-cheers/
 
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