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China is the world's slave.

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  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    China has turned itself into the world's slave. They don't have the infrastructure for a domestic consumption driven model (Western), and they have extraordinarily high domestic savings rates (like 30-40% of incomes). So to maintain employment, they sell stuff to the rest of the world. In turn, China acquires other nations' currencies and operates with a reduced reported government deficit (they have "back door" unreported government deficit spending through the state owned banks who are ordered to lend at a loss).

    When you look at the real terms of trade, China is impoverishing their citizens by reducing their nation's real resources available for domestic use in exchange for financial assets in other nations' currency. With respect to the U.S., that's real stuff that we get to use in exchange for digits in their account at our FED. When other nation's sent you their stuff and money that used to be called tribute. A few years back, headline MMTers went to China to explain this, but the Princlings benefit from the status quo, so they keep on sending us stuff.

    What they are doing is classic mercantilism, and it's a product of gold standard thinking. But in a fiat currency world, where floating exchange is an option for them, money is no object. What they could do, instead, is apply all that output they send us to raising the real standard of living of their citizens. With hundreds of millions still stranded in abject poverty, that is something that should be at the top of the agenda of a purported "socialist" government. America could capitalize on all this stuff they want to send us, as it allows us to pursue full employment by other means, but unfortunately we let their savings in our dollar unemploy our people. It's stupidity on both sides of the Pacific, and so-called "capitalists" are the leading idiots. More and more, I simply define "capitalism" as deviant "socialism" for the rich.

    Markets all have institutional settings and that takes government. Markets and government should serve the people, not the other way around.
  • Independent
    Plymouth, WI
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    China may be our bitch, but she is leaving her mess behind for us to try and clean up, adding one coal power plant weekly, who is going to clean the air and water our bitch is leaving behind with no emissions standards for their coal burning power plants and no emission standards for the factories that are producing our wants for cheap? China is sixty years behind America when it comes to caring about pollution, in fact, China doesn't care one bit about the pollution they are making to give us our wants. In fact, because China manufactures don't have emission standards to obey, they can produce products far cheaper than American manufactures can that do have to obey emission standards. American manufacturing can not compete with China polluting manufacturers, this is why we use to have import taxes, a tax system removed by our money system, so the rich can get richer without having to care about pollution standards.

    China is a Communist country, not a socialist country. Sure the China majority is living better than ever with us buying there work efforts, still, it is not the China people getting rich from our money, it is their Communist leaders getting rich. What do you think our alleys will do when China justifies invading America to collect the trillions we now owe them? Not a thing, is my guess. When you deal with the devil(If you have any question as to China being the devil, just ask Mother Nature and the China twelve year old working 12 hour days for peanuts), you will get evil, evil in many more ways than just polluted air and water and no jobs for legal Americans.
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    Once upon a time we exported everything to everybody. It's good to be the bitch! For that was when we bought things that said "Made In America".
    And then Greed bloomed.
  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    Unitedmajority: I agree with everything you're saying, except for your hang up on "Communism vs. Socialism". While they are headline communists, they purport to be in the socialist transition phase to communism.

    Issue with trade with China is moral and environmental, not financial. Any problems that we experience here from their imports is our fault for not allowing enough government net-spending to keep our workforce fully employed.

    The real terms of trade are in our favor. Everybody is confusing the theatre ticket for the performance. The stuff the world sends us adds to the stuff we produce and consume here at home. That raises our standard of living.

    It's good to be the King, not the bitch.
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    Carlitos Wrote: Unitedmajority: I agree with everything you're saying, except for your hang up on "Communism vs. Socialism". While they are headline communists, they purport to be in the socialist transition phase to communism.

    Issue with trade with China is moral and environmental, not financial. Any problems that we experience here from their imports is our fault for not allowing enough government net-spending to keep our workforce fully employed.

    The real terms of trade are in our favor. Everybody is confusing the theatre ticket for the performance. The stuff the world sends us adds to the stuff we produce and consume here at home. That raises our standard of living.

    It's good to be the King, not the bitch.
    That only applies to those with wealth. Our manufacturing jobs provided a huge amount of M1 money. And that meant local governments were well funded. What you wrote should be sent to the American Manufacturing Association for use in their PR.
  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    Again, imports can unemploy our people if we don't allow net-spending by government to offset the savings of the foreign sector. The only way a foreign agent can run a trade surplus with us if they desire our dollar to save. All that stuff the world sends us frees us to pursue full employment by other means, and build other stuff, like high-tech components, green energy facilities, etc.
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    And where is the government to get this money to offset the unemployed? For it is consumer spending that generates sales taxes and worker income that drives income taxes. You can't paint our loss of manufacturing in a positive light for no good has come from it. A healthy middle class always indicates a healthy economy. China is seeing that happen and that is why the Amercan Manufacturing Association is advocating moving the factories.
  • Democrat
    Meridian, MS
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    Carlos you wrote: China acquires other nations' currencies and operates with a reduced reported government deficit (they have "back door" unreported government deficit spending through the state owned banks who are ordered to lend at a loss).

    Help me understand what "unreported" government spending is. I mean maybe the U.S. should just "unreport" our deficit, and we would be flying high. And if their state banks are ordered (by whom?) to lend at a loss, I sure want to borrow every penny I can from them, so when I pay it back, I won't have to pay it all back. And this would benefit THEM, or at least make them happy, because they would be losing more in lending to me. Plus they wouldn't have to report it, I guess.

    This stuff is just way over my head.
  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    michaels39301:
    Their Central Bank has a negative equity account.

    So they can just spend without regard to aquiring offsetting assets.

    That's not how it is supposed to work here. When the FED marks up accounts in the banking system, they acquire financial assets. The recipients get digits in their account, but loses the financial asset that the FED recieves.

    But the FED has bought a lot of toxic trash, and is burying it in the books. So there's going to be losses from that that reduce the profits they turn over to the Treasury overtime, as the FED winds down QE intervention, which supports the 'bad' buys with profits from the 'good' buys.

    Over in China, when those bad loans de-capitalize the banks, the CB buys them up to recapitalize the banks, no questions, no problem. Also, just to point out, not everybody in China can get these loans. They're typically used to finance other state-owned companies or private companies contracting with the state to build stuff.

    Functionally, it's just like having the state fund the projects.

    They just mark it down in a negative equity account at the CB.

    In the USA, the Treasury is the only one with a negative equity account.

    Banking is a public-private partnership. That's what FDIC insurance and CB lender of last resort authority means. Government supplies the insurance (FDIC) and the reserves (FED), and banks are suppose to make loans based on honest credit analysis. They are agents under the government's control. Every loan they make has to fit in a box specified by Congress. It's similar to the rules of engagement for private security forces employed by the government as defense contractors.

    If you don't do honest credit analysis, and everybody can just get a loan and buy stuff, well that drives the price up of whatever is people are borrowing to buy, like houses, and when the loans go bad, the bank capital goes bad. Borrowers owe and their credit is screwed; "banks get bailed out, we get sold out." If government doesn't recapitalize the banks, they can just change the bank capital rules, which what was primarily done to keep from having to deem the banks insolvent. TARP just put Treasury in front of the FDIC for losses in excess of bank capital, and $700 billion or whatever was nowhere near enough to cover all the losses. So it was regulatory forebearance that saved the banks.
  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    WovenGems: "The funds to pay our taxes and buy government securities come from government spending."-Warren Mosler.

    Federal taxes regulate demand (they reduce our spending). Since we have to pay our taxes in dollars, we are willing to work for dollars. Taxes are a thermostat for the economy. So if spending is too little to keep the workforce employed, you either cut taxes, or add to government spending to reduce taxes per size of government.

    Now, top down tax cuts don't work, because of the marginal propensity of the rich to save, and not spend tax cuts recieved. So you start with tax cuts from the bottom up.

    The US dollar is a public monopoly. The US government and the agents under its control are the issuers.

    By law, people, companies, and US states are currency users.

    By law, the Social Security Administration is a currency user, as is the Post Office, and other independent federal agencies that are not funded by Congressional appropriation spending, but rules based independent revenue collections.
  • Democrat
    Lawrence, MA
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    " Markets and government should serve the people not the other way around " Carlitos
    The economic owning class is always the political ruling class. Michels
    He who has the gun rules. Left of Center

    When American capital was able to loot the resources of other nations freely and dominate their economies this allowed second cars to appear in working class driveways and swimming pools in the backyards of suburban homes. When competition for this grab bag arose.....American capitalists began squeezing workers to maintain their profits. This has been going on since the 70's, but the numbies have only recently begun to feel the real pain. To a great extent American labor is no longer needed, especially industrial labor. It has been replaced by a new system of slavery which the US government has championed in poor nations. This has a ripple effect througout society. For example, public education was important in the days when industry required a labor force with a modicum of education. That is no longer the case. Educated technical workers can be , and are, regularly imported from India and Japan and it doesn't require much education for the lump humpers to sell hamburgers to one another. So now we are seeing attacks on public education and a move to privatize the "industry". As far as "serving the people" goes.. capitalism ruins everything it puts its dead hand on. For us it's a case of....dumb when young and too late ( if ever ) smart.
  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    Agreed. We need to unfuck the world.

    Government is supposed to serve public purpose by balancing out private interests so that the market and the aggregate actions of market actors also serve public purpose. That's why we have markets: to make available goods and services for public sector use. Instead of government coming in and clubbing people over the head and making them slaves or confiscating their possessions, the market enables government to purchase goods and services for use for the public sector.

    But when you let exclusive private interests make the policy, they serve their own ends, and unbalance everything in their favor, so the whole thing serves their purpose and not public purpose.

    Unfuck the world.
  • Independent
    Plymouth, WI
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    Carlitos Wrote: Agreed. We need to unfuck the world.

    Government is supposed to serve public purpose by balancing out private interests so that the market and the aggregate actions of market actors also serve public purpose. That's why we have markets: to make available goods and services for public sector use. Instead of government coming in and clubbing people over the head and making them slaves or confiscating their possessions, the market enables government to purchase goods and services for use for the public sector.

    But when you let exclusive private interests make the policy, they serve their own ends, and unbalance everything in their favor, so the whole thing serves their purpose and not public purpose.

    Unfuck the world.
    I'm on your side with those words, "un____ the world." That is possible to do in America and America only. Only in America does the majority have a constitution that allows the majority to unscrew the world, why do you think the rest of the world's majority calls us dumb Americans? Because we don't use our constitution to save the world from the money system, that is why our majority is know to the rest of the world as "dumb Americans."
  • Independent
    Ft.myers, FL
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    Yeah, I really do not know what to tell you about the word "dumb Americans" I'll give you an example (I was there) In India a tourist bus stopped, full with Americans, in an alley nearby where I stood a bunch of kids showed up; they had all kinds of junk with them and paste which they threw and smeared over them and some filthy torn clothes they changed into changing from beautiful western dressed kids into the most ugly filthy things with big deformities in ten minutes and limped to the bus, and of course asked for "bakshies", which the tourist handed out like crazy in order not to be confronted with the horrible death like smell. They came back back into the alley and counted their haul, and said "those dumb Americans". Anyway in Dutchy land they say the same thing right now about the whole "gun" happening here; those "dumb Americans"!!!
  • Independent
    Plymouth, WI
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    I call us the dumb Americans because we have the constitution and the power right under our finger tips to change the money system rule, but instead we do nothing but complain with no action, for sure it is time for the majority to act, before the system changes the constitution that gives the American majority the power to rule this country. The system has been shaking in their wing tip shoes wondering how to keep the majority from using the internet to unlock the powers of the Constitution, its for sure time to give them a real reason to shake and move, move out of control once and for all.