Labor Share of National Income!

[QP!]

^sophomoric bore.

^cry baby loser who admits my point was accurate to make (two things can be true at once) but is crying because he does not want to talk about that aspect and said it was wrong for me to focus on the reason i created this thread and what i put in the OP.

 

[zymurgy]

yawn

 

[zymurgy]

No. Cash now is based on a promise that its worth something. Do you trust the "promise" of the govt regardless of who's in charge? I sure as shit dont

You’re arguing about why cash has value. That isn’t my point.


I’m talking about who gets newly created money first. The people closest to its creation get to spend it at existing prices. By the time that money filters through the economy and reaches wages and ordinary consumers, prices have already begun adjusting upward.


Same number of dollars. Different purchasing power depending on when you receive them.

 

[Yakuda]

You’re arguing about why cash has value. That isn’t my point.


I’m talking about who gets newly created money first. The people closest to its creation get to spend it at existing prices. By the time that money filters through the economy and reaches wages and ordinary consumers, prices have already begun adjusting upward.


Same number of dollars. Different purchasing power depending on when you receive them.

Why it has value is essential to the discussion regardless of when you get the money. Now its all based on smoke and mirrors.

No its not the same number of dollars. The govt just prints money but its has no actual value because it represents a promise and not anything people actually want.

 

[zymurgy]

Why it has value is essential to the discussion regardless of when you get the money. Now its all based on smoke and mirrors.

No its not the same number of dollars. The govt just prints money but its has no actual value because it represents a promise and not anything people actually want.

You’re still arguing a different issue. Whether money is backed by gold, government promises, or pixie dust doesn’t change the Cantillon effect.


Gold has the effect too. New gold enters the economy somewhere first, and those closest to it benefit before prices adjust.


But there’s an important distinction: under gold, those early beneficiaries generally risked time, talent, capital, and treasure to find and produce the new gold.


Under fiat, the winners are determined largely by who policymakers and financial institutions put closest to the money spigot. No discovery or production of a scarce monetary commodity is required. The new purchasing power is created administratively and distributed through political and financial channels.


That’s what I find distasteful. The Cantillon effect exists either way; fiat dramatically expands both its scale and the opportunity for politically connected people to sit at the front of the line.

 

[QP!]

You’re still arguing a different issue. Whether a dollar is backed by gold, government promises, or pixie dust does not change my point.

....

Hmmmm, frustrating when someone does that, right?

Whether or not your underlying issues were correct or not they never changed my point, which was correct and the topic of the thread. Hmmm...

 

[zymurgy]

Hmmmm, frustrating when someone does that, right?

Whether or not you underlying issues were correct or not they never changed my point, which was correct and the topic of the thread. Hmmm...

trollololol

 

[Yakuda]

You’re still arguing a different issue. Whether money is backed by gold, government promises, or pixie dust doesn’t change the Cantillon effect.


Gold has the effect too. New gold enters the economy somewhere first, and those closest to it benefit before prices adjust.


But there’s an important distinction: under gold, those early beneficiaries generally risked time, talent, capital, and treasure to find and produce the new gold.


Under fiat, the winners are determined largely by who policymakers and financial institutions put closest to the money spigot. No discovery or production of a scarce monetary commodity is required. The new purchasing power is created administratively and distributed through political and financial channels.


That’s what I find distasteful. The Cantillon effect exists either way; fiat dramatically expands both its scale and the opportunity for politically connected people to sit at the front of the line.

You're point is well taken but if the effect exist either way then its irrelevant. When the gold standard was in effect when cash got to me it was worth a lot more to than it is now. Just printing paper reduces the vale of money no matter who you are whenever you get it.

 

[zymurgy]

You're point is well taken but if the effect exist either way then its irrelevant. When the gold standard was in effect when cash got to me it was worth a lot more to than it is now. Just printing paper reduces the vale of money no matter who you are whenever you get it.

You just skipped the last sentence of my reply, which explains exactly why it is not irrelevant.

Under gold, increasing the money supply requires actually finding, mining, refining, and bringing new gold into circulation. That process is costly and naturally limited.

Under fiat, new purchasing power can be created administratively in enormous quantities and directed through whatever political and financial channels policymakers choose.

 

[Yakuda]

You just skipped the last sentence of my reply, which explains exactly why it is not irrelevant.

Under gold, increasing the money supply requires actually finding, mining, refining, and bringing new gold into circulation. That process is costly and naturally limited.

Under fiat, new purchasing power can be created administratively in enormous quantities and directed through whatever political and financial channels policymakers choose. I quoted fro

I quoted directly from your last line. You said the effect happens either way so the point is irrelevant

Yes thats right it is costly but it makes money actually worth something.

Yeah weve seen how well that works.

 

[zymurgy]

I quoted directly from your last line. You said the effect happens either way so the point is irrelevant

Yes thats right it is costly but it makes money actually worth something.

Yeah weve seen how well that works.

The fact that the Cantillon effect exists under both systems does not make the distinction irrelevant. It makes the constraint the issue — and you ignored the constraint.

Gold makes new money costly and slow to create. Fiat does not, so the Cantillon effect can happen on steroids.

You could keep fiat and reduce the problem by imposing a real cost or hard limit on creating new money — essentially recreating the discipline gold imposed naturally.

 

[T. A. Gardner]

You just skipped the last sentence of my reply, which explains exactly why it is not irrelevant.

Under gold, increasing the money supply requires actually finding, mining, refining, and bringing new gold into circulation. That process is costly and naturally limited.

Under fiat, new purchasing power can be created administratively in enormous quantities and directed through whatever political and financial channels policymakers choose.

Fiat money is different from time value of money. The later is how economies are supposed to work.

 

[zymurgy]

Fiat money is different from time value of money. The later is how economies are supposed to work.

If by “time value” you mean sound money should retain or gain purchasing power as productivity increases, I largely agree.

But that’s a completely separate issue from the Cantillon effect.

I’m talking about what happens when new money of any kind is created and who gets it first. Gold constrains that process; fiat removes much of the constraint. That’s been my point from the beginning.

 

[Yakuda]

The fact that the Cantillon effect exists under both systems does not make the distinction irrelevant. It makes the constraint the issue — and you ignored the constraint.

Gold makes new money costly and slow to create. Fiat does not, so the Cantillon effect can happen on steroids.

You could keep fiat and reduce the problem by imposing a real cost or hard limit on creating new money — essentially recreating the discipline gold imposed naturally.

I didnt ignore the constraint Im simply stating the affect is meaningless if it affects both systems.

No matter how you slice it basing the value of money on fiat which is transient makes it practically useless whereas basing it on gold makes it worth more than a promise

 

[T. A. Gardner]

If by “time value” you mean sound money should retain or gain purchasing power as productivity increases, I largely agree.

But that’s a completely separate issue from the Cantillon effect.

I’m talking about what happens when new money of any kind is created and who gets it first. Gold constrains that process; fiat removes much of the constraint. That’s been my point from the beginning.

No, I mean Time Value of Money.

Time Value of Money: What It Is and How It Works

The time value of money (TVM) assumes the present value of money will grow through investment.

www.investopedia.com

It is basic economic concept.

A simple example:

You deposit $100 into a CD, savings account, etc. In a year, you will have $105. The bank then takes your $100 and loans it to some schmuck for something. They are going to charge that person $10 a year to service the loan.

Thus, the bank immediately 'created' $100 that didn't previously exist and will make $5 in a year as well. You make $5 in a year. So, now there's $200 in the economy. In a year there will be $215.

Gold is an artificial standard. We could as easily use steel, aluminum, or sand as the standard. The problem with any system using a commodity as the basis for how much money there is, is that it creates artificial constraint on the money supply.

The time value of money concept means that wealth grows by investment in the economy. More goods and services means there's more basic money to use and when you can loan invested money out it creates even more wealth. Our current system of economics wouldn't be possible without it. The prior gold standard (or a monetary system based on a commodity) created scarcity. That was a driver for wars over wealth for millennia.

 

[zymurgy]

No, I mean Time Value of Money.

Time Value of Money: What It Is and How It Works

The time value of money (TVM) assumes the present value of money will grow through investment.

www.investopedia.com

It is basic economic concept.

A simple example:

You deposit $100 into a CD, savings account, etc. In a year, you will have $105. The bank then takes your $100 and loans it to some schmuck for something. They are going to charge that person $10 a year to service the loan.

Thus, the bank immediately 'created' $100 that didn't previously exist and will make $5 in a year as well. You make $5 in a year. So, now there's $200 in the economy. In a year there will be $215.

Gold is an artificial standard. We could as easily use steel, aluminum, or sand as the standard. The problem with any system using a commodity as the basis for how much money there is, is that it creates artificial constraint on the money supply.

The time value of money concept means that wealth grows by investment in the economy. More goods and services means there's more basic money to use and when you can loan invested money out it creates even more wealth. Our current system of economics wouldn't be possible without it. The prior gold standard (or a monetary system based on a commodity) created scarcity. That was a driver for wars over wealth for millennia.

You just spent several paragraphs explaining why you want the constraint removed — which is exactly the constraint I’ve been talking about.

Time value of money simply says capital available today can earn a return. It does not require an unconstrained money supply.

And your bank-loan example actually demonstrates my point: newly created credit enters the economy through particular borrowers and institutions first. It doesn’t magically appear proportionally in everyone’s pocket.

So we’re back where we started: remove the hard constraint on money creation, and the Cantillon effect becomes much easier to amplify.


Also - you are conflating different things


I can loan you $100 of my existing money and charge you interest. That demonstrates time value of money without creating one new dollar.


If a bank instead creates a new $100 deposit by lending, that is credit creation.


And if you receive that newly created $100 before everyone else and spend it before prices adjust, that is the Cantillon effect.


They can interact. They are not the same concept.

 

[Guno צְבִי]

President Richard Nixon ended international gold convertibility for the dollar in 1971, permanently shifting the U.S. to a fiat currency system

 

[Crepitus]

Such a base and stupid reply.

That the elite pay most of the taxes is a natural extension of the FACT that they keep getting more and more of the wealth to horde.

When an countries "Economic output" is measured and it goes up and up and yet the percent of that NEW WEALTH generated going to the MC and below is plummeting while the percentage to the uber wealthy soars, creating trillionaires, and your point is to say 'ya but those trillionaires pay the most', then that creates an ever self sustaining loop.

As the MC below drop from 65% share of that wealth to 55% to 45% to 25% to 5% OF COURSE then the one making 95% is paying more.

To then use the 'they pay more' to justify it is just absurd.

Since they have 90% of the money, they should pay 90% of the taxes.

 

[Crepitus]

You just spent several paragraphs explaining why you want the constraint removed — which is exactly the constraint I’ve been talking about.

Time value of money simply says capital available today can earn a return. It does not require an unconstrained money supply.

And your bank-loan example actually demonstrates my point: newly created credit enters the economy through particular borrowers and institutions first. It doesn’t magically appear proportionally in everyone’s pocket.

So we’re back where we started: remove the hard constraint on money creation, and the Cantillon effect becomes much easier to amplify.


Also - you are conflating different things


I can loan you $100 of my existing money and charge you interest. That demonstrates time value of money without creating one new dollar.


If a bank instead creates a new $100 deposit by lending, that is credit creation.


And if you receive that newly created $100 before everyone else and spend it before prices adjust, that is the Cantillon effect.


They can interact. They are not the same concept.

There's a reason many religions forbid that.

 

[QP!]

Since they have 90% of the money, they should pay 90% of the taxes.

I would not go that far as that could mean a 90% tax on the same income earned, year over year over year, even if after taxed the first time the person does not have any other big financial gains.

But we are conceptually aligned.

what makes NO SENSE is the concept to ignore the uber rich TAX RATE and instead only focus on aggregate taxes they pay while saying that 'since they pay the most already looking to them to pay more is wrong.

They create this very situation where you can see someone who just made his first Trillion dollars only paying a 1% tax ($10B) in State and Federal taxes, versus a Middle class person making $60K/yr paying ~30% ($18K) and the republican magat argument is 'see the trillionaire paid in $10B while the MC guy only paid $18k so lets lower the tax rate on billionaire to 0.1%."

And then so on and so on as that allows the trillionaires wealth to explode ever upward creating the very situation that magats will say justify yet another tax cut to them because 'look he is paying the most at 0.1% by paying a few billion so cut his taxes now to 0.001%.

It is this type of perversity in logic that magats like @zymurgy are blind to as this very tax policy pushes wealth up with them then claiming that as justification for the next tax cut and refusing to even address while just point to them 'paying more' as a reason to justify ever increasing tax cuts to the oligarchs.