How much is $17 trillion? Visualized for reference.

[Beegs]

Really like this thread..... John, I love your writing style, easy to read, polished and to the point. You are very effective in getting your point across. I wish you were "on my side"

I am self-employed, almost always have been and it has been difficult to "make money" due to everything going UP in price. Tires, parts, insurance, groceries, utility bills...you name it and it has for the most part gone UP.

Article in my local paper yesterday: "Water and sewer bills to rise 7%" Great, I own a four unit and am paying a fortune as it is....AND rents in the area are NOT going up to offset. Oh and the government has been buying homes, spending 300K+ to remodel them and turn around and put them on the market for $159K...........that makes it real easy to compete!

I have lived with debt and without debt and will take without any day of the week. Study the people around you...an alarming number of people have sort of done the same thing: When loans were easy to come by, they maxed out, bought all the toys, went on vacation and partied like rock stars. Now upside down on home loans, toys go first, credit cards get maxed, 401K gets sucked dry, stop payments on the house and then don't ever answer the phone because it's the collections company looking for cash. I am seeing this happen over and over, herd mentality. For the last 5 or 6 years I have been buying up all the stuff they can't afford anymore and have been making good money flipping it, BUT in the last 6-8 months things have changed, it's almost impossible to sell stuff, it has to be a steal of a deal. It's almost like money has been snuffed out and people are just hanging on by a thread.

Strange times....

[Bucketlist2012]

Originally Posted by parsonsj

I think most reasonable people would go with the BLS on this one.

You show us your "facts", and tell us that if we don't believe them , that we must be unreasonable..

When food has in some case doubled in the store over the last few years, a reasonable person would understand the facts of reality.

Inflation is the hidden tax, and it is here..Costs are up. The printing and spending cause the dollar to be devalued, so that it takes more dollars to buy a product..

So when you have the printing of money from thin air, the dollar devalues, and along with the costs rising on products(some have doubled), you have higher costs and the devalued dollar.

So a reasonable person would look to what is happening rather than relying on charts. Everyone has a different view, and John, that does not make them unreasonable. That is my point.

Again, I appreciate your posts to give readers the other side of things, but just because we won't buy the data and charts, does not make us unreasonable..Remember that you may be wrong.

And again, I might be wrong, but as I said in previous posts, I Invest according to what you believe, and I don't invest according to what I think is the right way to handle the situation..They will print again.

[realcoray]

Originally Posted by Beegs

Article in my local paper yesterday: "Water and sewer bills to rise 7%" Great, I own a four unit and am paying a fortune as it is....AND rents in the area are NOT going up to offset. Oh and the government has been buying homes, spending 300K+ to remodel them and turn around and put them on the market for $159K...........that makes it real easy to compete!

I've heard zero reports of the government buying homes and remodeling them, even for banks this is a very rare thing to do. I was in the market for months this year and saw nothing like that at all. I wouldn't say it could never happen but that is not typical at all.

If anything, the government is losing a lot of money by practically giving houses away. I can't tell you how many freddy/fannie homes I saw that were listed way below market value. Not only were they cheaper than other REOs, you have to put less down!

My point is this, and it goes back to a lot of things people have said in here. Every persons experience is different, and you have to be cautious drawing any broad conclusions from it. In real estate and in commodities, every market is different, and generally we're all exposed and affected by a relatively small area of either, so as they go, so goes our experience.

[realcoray]

Originally Posted by Bucketlist2012

When food has in some case doubled in the store over the last few years, a reasonable person would understand the facts of reality.

Inflation is the hidden tax, and it is here..Costs are up. The printing and spending cause the dollar to be devalued, so that it takes more dollars to buy a product..

Could there be other reasons why food costs have gone up? Certainly gas prices contributed to some of the recent (5-10 year) increases, but while they vary now, it's still in a somewhat consistent range and I think 4$ gas has been priced in.

Could it be the weather? Droughts in China and now the United states along with other similar disruptions around the world probably have the largest impact. When supply drops and demand doesn't (if anything it goes up), the obvious effect is rising prices.

Could it be Ethanol? The CBO estimated that 10-15% of the increase in food prices in 2007-2008 was related to Ethanol. The number is likely higher now, and here's an article talking about it from the wall street journal:

http://online.wsj.com/article/SB1000...googlenews_wsj

The mandate was awesome for corn farmers, but affects the price of so many things that everyone else pays the price. The government is to blame on this part.

Combine all of these factors and you'd be hard pressed to find out where all of our printed money actually contributed much towards the price increase. For example, steel costs have gone down what looks like 10%+ in the last year:

http://www.worldsteelprices.com/

If our money was being devalued at such a rapid pace that you point towards food as an example, why would steel be any different? The answer is they are two completely different things and while inflation would affect both, they have many other far more powerful things at play. In the case of food, the above contributed virtually all of the price increase while in the case of steel, decreased demand because of the economic situations around the world probably account for most of the drop in prices.

We all buy food so it seems like things cost more, and while on lat-g we tend to buy more steel than most people, we probably don't see the decrease in cost in our prices because AMD and Goodmark and so forth are likely afraid that prices could go back up, and really they are businesses so as long as the market will bear it, they will keep prices where they are.

[Bucketlist2012]

All Good points, but getting back to the origin of the thread.

Some believe that printing money, Stimulus,is the answer. That for certain devalues the dollar, and you will need more dollars to buy products. The more units that you print, the less it is worth. And the paying back the debt will go on forever, and God forbid when rates rise.then you have real trouble trying to pay just the Interest, let alone the principal.

Some believe that the government is the most wasteful entity on earth. Why are they wasteful ? Because it is not their money. They don't care. GSA, ect.. just waste millions , and multiply that by the thousands of programs that the government has, and you have massive wasteful spending. Billions turn into trillions

Is the answer to print more money ? Is the answer to streamline Government and cut the fat ? The fat has been going on since I was born, so it isn't something new.

I believe it is to cut the wasteful spending, and not print more money.. Will that happen ? I doubt it, so I set my Investments on the case that they will print and spend, and never cut the waste...The waste is the grease for the 537 Politicians.

So, none of us are unreasonable, we just have different views on what should be done..Nothing wrong with that..I mean personally, that is.

Again, I appreciate both sides so that the thread gives people choices..Let the readers decide..Individually, we have decided, and nothing someone posts will change our minds, but it would be boring if we all just agreed

[Beegs]

Originally Posted by realcoray

I've heard zero reports of the government buying homes and remodeling them, even for banks this is a very rare thing to do. I was in the market for months this year and saw nothing like that at all. I wouldn't say it could never happen but that is not typical at all.

I'll sleep better knowing you keep up with what's happening in the Rochester NH Real Estate market....long story short...Rochester got a hold of some fed money, bought up some homes in a distressed area and renovated them. New from top to bottom. Some of that money was used by the Realtor to advertise them...OVER AND OVER AGAIN....with VERY LARGE ADS in the local paper. Oh BTW, if you made a liitle too much money, you couldn't buy it.

One particular duplex they did worked out real well for an older couple trying to unload theirs.....LOL competing against the government!!

One town north of us (Berlin) used their Fed money to raze some homes. Was up to the town as I understand it.

[realcoray]

Originally Posted by Beegs

I'll sleep better knowing you keep up with what's happening in the Rochester NH Real Estate market....long story short...Rochester got a hold of some fed money, bought up some homes in a distressed area and renovated them. New from top to bottom. Some of that money was used by the Realtor to advertise them...OVER AND OVER AGAIN....with VERY LARGE ADS in the local paper. Oh BTW, if you made a liitle too much money, you couldn't buy it.

One particular duplex they did worked out real well for an older couple trying to unload theirs.....LOL competing against the government!!

One town north of us (Berlin) used their Fed money to raze some homes. Was up to the town as I understand it.

Like I said, I didn't discount it being possible, I mean I've heard of certain areas considering grabbing foreclosed houses using eminent domain in order to force them to be sold and not just sit empty, and I've seen reports that in some areas foreclosed and abandoned homes being razed, but they are the types of homes that you hear selling for < 10k because they are in terrible areas and barely livable.

My point is, that is extremely rare and while it may have affected you or people you know, it doesn't mean that's reality for everyone.

And bucketlist, I doubt anyone would disagree that the government could certainly cut a lot of waste and use it's money wiser. The question is about the nature, scale and timing of such things.

[Tony_SS]

Originally Posted by parsonsj

True enough, though I don't think I'm warning anybody. I'm just trying to round out the discussion a bit. Let's go back to the title of the thread, which implies that $17T is bad. Just... because. It's worth a discussion to see if there is more to it than that. It would be better for us in the long term if we were to do more stimulus to put millions of people back to work, and then pay down the debt with a healthy economy.

We've done it before: after WWII, and again after the 80s.

I've said this already, but you seem to ignore it. We had prosperity after WW1 for 3 reasons, and it was not fiat stimulus. More money in the economy resulted from the govt taking less out of it. Not to mention that consumers are spend happy after wars are over and troops return home.

My theory is when we end these wars and spending overseas, bring our troops home, we will immediately see more consumer confidence and service men and women buying houses, cars and spending their govt money here at home. Just like after WW2.

But people like Dick Cheney saying deficits don't matter is bunk. And it's why our Sec of Treasury was fired after a year, because he said they do matter. In came Hank Paulson, ex Goldman Sachs CEO and the govt got even more in debt and bailed out his old employer.

You need to look at who benefits from govt spending. And there have been plenty in govt to warn against it. The problem is, they seem to get rooted out.

Now back to your theory about stimulus. If that was true, we would have 4-5% official unemployment and a great economy due to QE1 and 2. But like they've tried, they didn't work as we can see now. This is why you and Krugman have such a hard time selling this idea. But like I said, your people are in power, so why aren't things better?

And the myth that more debt = higher value is almost too crazy to talk about. Debt is the antithesis of value, it's negative equity. % of GDP is what matters, and ours is on track for well over 200% which will lead to an even more worthless dollar, that is now worth 95% since 1913, the birth of the Fed. What do you think of that data?

But instead of arguing data, I like to discuss principle. It's a simple idea that we are arguing, who controls the market and the value of its currency. You say it should be done by a monopoly: the Fed and the govt. I say it should be by a free market: the people.

[Shmoov69]

Originally Posted by ErikLS2

I've enjoyed this discussion although I havn't got much to contribute, both sides make some good points. But, isn't this point in time "just another one of those things" that happens in our system that eventually corrects itself and we then see another period of greater prosperity? Since we can't really do much about it, I guess we should just try to educate ourselves on how to survive periods like this.

One REALLY big issue nobody is talking about is society. I don't think that it will "just work itself out" and be better. I could be totally wrong, and I'm not the chicken little type either! LOL. It worked itself out in the past because of people. The morality (which IMO is based on spirituallity, or lack thereof in the current population), work ethic, self pride, self dependence of people has TOTALLY changed over time. And it has changed for the worse. People just plain don't care anymore and want everything to be "someone else's" problem and fault. Anyone that has been in business or has managed people for more than a few years knows exactly what I'm talking about. Call it an entitlement society or whatever, but that IMO is why I think the "good times" are behind us. There will be some peaks, but I don't believe that there will be any long term "good times". Just like I said earlier, there are too many hands "out" for the hands putting in. I know that JP and some others may not agree, but I really feel that it is a "spiritual numbness" of the nation that has caused the downward spiral.

[parsonsj]

Originally Posted by Mike

You show us your "facts", and tell us that if we don't believe them , that we must be unreasonable..

When food has in some case doubled in the store over the last few years, a reasonable person would understand the facts of reality.

Inflation is the hidden tax, and it is here..Costs are up. The printing and spending cause the dollar to be devalued, so that it takes more dollars to buy a product..

Here's the problem with disputing the figures from the Bureau of Labor Statistics (BLS). The same people tell us about the deficit. Here we are discussing the overall national debt ($14T or so today), and how do we know that number? Because the Federal government publishes it. We all believe that number. So why don't we believe the inflation numbers published by the Federal government? Why don't we believe the unemployment numbers published by the Federal government? I find this strange, and it's really inhibiting a good discussion.