Socialism vs capitalism

[Skippy]

Not necessarily. I was saying capitalism could not regulate much more, and still be capitalism.

Of course it can... we were there before Reagan.

 

Boy, you'd think they'd clean up their act to avoid the fines then, wouldn't you? But since the fines are small enough, they can just be written off as a cost of doing business (some even get tax breaks for those things [as a cost of doing business], I've heard, although that's unverified).

Can't argue much with that. It is my understanding that the costs of fines are taken as tax write-offs (but I'm no tax authority)...most assuredly they are passed on to the consumer.

 

 

Depends on your definition of superior. More productive? Yes. Better? That's a different question. Sustainable? Jury's still out..

I have a globe at home which shows "Union of Soviet Socialist Republic," I can't find that on the globe at my daughter's school. There is also places called Yugoslavia and Romania. Plus the countries of Poland and Czechoslovakia have shed their Communist handicaps. I think another verdict is the G8 Summit which had no Communist members.

 

 

True, that was the ruling, but if you watched the general populaces reaction, the vast majority still prefer socialized medicine..

As long as they can easily cross the American border when they really need treatment.

 

 

Who determines "what they deserve?" The highest bidder in the US, regulatory bodies in other countries. Neither has much of a supremacy claim. I broke my neck 2 years ago, at the time I was uninsured- because I couldn't afford it. I was working, thank God, so I was covered on L&I. The doc's got their money, but they wouldn't have if it wasn't for that form of institutionalized health care coverage..

The market determines what they deserve. In The U.S., you would have been treated and my tax money would have paid for it...happens every day for emergency cases like broken necks. In Houston we are taxed by the city government for hospitals and by the county government for hospitals...for cases like yours where someone has no insurance.

 

 

I was refering to self-regulation inside the industry. The US governmental regulations are currently being reduced (or at least attempted to). This leaves the industry to pick up the slack, but given your statement earlier - they seem to prefer to pay fines then fix the problem- I doubt they will.

At the chemical company where I used to work we monitored closely the differences in the amount of feedstock in vs. the product out. One factor we took into account was the pounds of product burned in the flare - the difference was our loss to th eatmosphere. We spent a lot of money trying to locate and eliminate those losses, to keep from getting fined as well as to eliminate the future loss of material.

[Skippy]

You have less than nothing.

This less than nothing is becoming even more less than nothing.

People give to you but you don't give it back.

And you have the nerve to say:

If that is true, why is it that we are being attacked by everyone at every turn. Examples: Kyoto Treaty - would punish US industry while giving a free ride to high polluters who are "developing."

Live8 Concert - "We're not asking for your money, we want your face." Translation - "The G8 countries (esp the US) have it within their power to double aid to and cancelling debt from Africa we can change the future."- From the Live 8 web site. The US gives 25% off all aid to Africa, it has increased several times ion Bush's terms, yet we are assaulted for not giving more. IF we are bankrupt, why keep after us for money? Why do we supply 60-75% of the forces and arms in all UN activities? How can a bankrupt country send billions in aid each year from personal, not governmental, accounts to help famine/earthquake/flood/tsunami/volcano victims?

[nkt]

The US gives 25% off all aid to Africa, it has increased several times ion Bush's terms, yet we are assaulted for not giving more.

The snag with that is the level of debt is such that the US still makes more money back from African debt than it gives in aid.

IF we are bankrupt, why keep after us for money? Why do we supply 60-75% of the forces and arms in all UN activities? How can a bankrupt country send billions in aid each year from personal, not governmental, accounts to help famine/earthquake/flood/tsunami/volcano victims?

I think you kind of answer your own question there. People en mass, rather than the government, send the majority of the aid.

 

The US has to supply most of the UN weapons and men, since the US is the only remaining superpower, and hence is the country that decides to go around invading other countries. It needs the UN to make it look legal. You don't want to go into that!

 

The kicker, of course, is that if the US looks like it needs some more money, it can actually borrow money from itself to service the debt. Yes, bonkers though that is, they simply write a cheque that they will cash, since they are a bank (kind of - the Federal Reserve is a weird beastie) yet they can do what they think is a good idea. If they think printing $billion extra to pay for something, they can!

 

Leaping back to my previous post, people in the "poor" end of US culture have a lot of stuff, same in the UK. But compared monitarily, the uber-rich are getting richer far faster than those in the middle, and many in the middle are finding that the engineering or computer jobs they used to do are vanishing, and they have to take a major cut to get another job.

 

To demonstrate:

poor                                                                                                        rich
98967411111111               11     111        1                                     1             1

The distribution of wealth is something like that. At the left you have huge numbers of poor, and then at the right you have people worth billions. This moves the average to the right a long way. As the ultrarich get even ultra richer, the average shifts to the right as well, leaving more people in the poorer half.

[Skippy]

The snag with that is the level of debt is such that the US still makes more money back from African debt than it gives in aid.

Hadn't heard that stat before...if true it is compelling evidence for giving more and/or reducing the debt.

 

The US has to supply most of the UN weapons and men, since the US is the only remaining superpower, and hence is the country that decides to go around invading other countries. It needs the UN to make it look legal. You don't want to go into that!.

I think it has more to do with our economic health and strength than with our military might - though we are the strongest there too. "Superpower" used to mean, "Have nuclear arms," now India and Pakistan have nukes but they never are referred to as a "Superpower." China and Russia have nukes, but you do not refer to them as superpowers so it is not the size of the nuclear arsenal, nor is it the size of the army - standing or potential. The US is the current superpower for more reasons than her military ability, and that leads us back to her economic strength which is hand-in-hand with her capitalist mentality.

 

The kicker, of course, is that if the US looks like it needs some more money, it can actually borrow money from itself to service the debt. Yes, bonkers though that is, they simply write a cheque that they will cash, since they are a bank (kind of - the Federal Reserve is a weird beastie) yet they can do what they think is a good idea. If they think printing $billion extra to pay for something, they can!.

The problem with that is that printing more $$ reduces the true value of the dollar abroad. I'm with you in trying to understand The Fed ;) .

[Biochemist]

The snag with that is the level of debt is such that the US still makes more money back from African debt than it gives in aid.

Historically, most African debt is refinanced before it gets repaid. That is, it never gets repaid. Lenders generally have not "made" much money on African debt.

...The kicker, of course, is that if the US looks like it needs some more money, it can actually borrow money from itself to service the debt.

Any central bank can do this, and they all do. This is the primary mechanism that central banks use to manage money supply. This includes The US Federal Reserve, The Bank of England, The European Central Bank (formerly the Bundesbank), The Bank of Japan, and other lesser banks as well. The more stable the growth in GDP over time, the more manageable the money supply. The US Federal Reserve does not write itself checks. It buys or sells US government bonds (issued by the Treasury, not the Fed) to manage money supply at a level roughly matching inflation. The Fed has little to do with the amount of US debt. Debt is issued by the Treasury.

... The distribution of wealth is something like that. At the left you have huge numbers of poor, and then at the right you have people worth billions. This moves the average to the right a long way. As the ultrarich get even ultra richer, the average shifts to the right as well, leaving more people in the poorer half.

This is a nice picture, but it is incorrect. The median income in the US is rising, not just the average. This means the the middle class has more real buying power every year (with rare exceptions) than they used to. It is true that the top 1/10 of 1% is getting richer than in the past, but the median family is doing better as well in terms of lifestyle. This is particularly true when you compare US median family income to European family income (versus US now to US 20 years ago).

[nkt]

Historically, most African debt is refinanced before it gets repaid. That is, it never gets repaid. Lenders generally have not "made" much money on African debt.

Yes, because it was lent stupidly, in the knowledge that the debt would never be repaided in full to the terms. However, many of the loans have repaid far more than was ever lent. (Whether this takes inflation into account I don't know)

 

Any central bank can do this, and they all do.

Actually, most banks have to borrow of other banks, and national banks have to borrow in other currencies. Otherwise the bank could change the value of the national currency by fiat to repay the loan cheaply. Only the US Federal Reserve can borrow US dollars.

This is a nice picture, but it is incorrect. The median income in the US is rising, not just the average. This means the the middle class has more real buying power every year (with rare exceptions) than they used to. It is true that the top 1/10 of 1% is getting richer than in the past, but the median family is doing better as well in terms of lifestyle. This is particularly true when you compare US median family income to European family income (versus US now to US 20 years ago).

Then I may perhaps be wrong on that. I haven't looked into it since niversity some 9 years ago.

 

--

The biggest issue with things like Aid to Africa when you consider the original arguement, is that socialism is a distortion of the free market, and this generally has negative effects. For example, which is easier - going to the shop to buy bread for a few pence, or growing your own wheat? Shopping for bread is easy, even if you are a farmer who makes money by selling grain.

 

Now, imagine that the price of bread dropped to zero (or even below). Far fewer people will buy bread now than before? I think not! There is a surge in demand. However, the farmer who was selling his grain is now stuck. No-one wants to buy his grain to make bread any more.

 

Now, in a capitalist society, the demand for bread should raise the price, and grain should also go up in value. However, socialist ideals ensure that this does not happen - after all, the farmer who would otherwise starve can have free bread too! So the farmer gives up farming, and the land goes to ruin, and there is another set of idle hands.

 

Far fetched? Not at all. This is exactly what is happening in Africa when we send aid there. All the rice farmers are stuffed, since you can go and get a load of free rice - and it will even be brought to your village free! No more 3 hour walk to the farmer up the road!

 

And what do all those jobless Africans do without electricty and 24 porno channels? They go to bed early, and get up late. Already big family units become even bigger. No longer limited by economics, they can breed freely (and they don't have contraception either!) and grow until even in good years the land available will not support them, even if it was still being worked. :wave:

 

So there you have it. Don't give money to Africa. Relieve the debt, but don't send them food. For their sake!

 

Oh, and watch out for 419 scammers too. After years of free everything, some of them get TV and start wanting even more.

 

However, as an end-game, I suspect communism will be the result. Once we have free electric, free CPU time, free matter, etc., etc. we are only going to care about space for ourselves, and, once AI is running fully, virtual space will be as good as anything. Hence, almost nothing will have value, since anything will be able to be produced without effort from feedstocks produced by AI controlled robots. We won't even be able to think for a living, unless we are lucky, and AIs turn out to be uninventive.

[Biochemist]

Yes, because it was lent stupidly, in the knowledge that the debt would never be repaided in full to the terms. However, many of the loans have repaid far more than was ever lent. (Whether this takes inflation into account I don't know)

It seems to me like you are overturning your own point. You asserted above that the West made more money on loans than they give to Africa. Now you are acknowledging that they loaned "stupidly" which is true. Most banks did not do well on loans to Africa. The fact that they "made" some money does not mean that they were good investments for them.

Only the US Federal Reserve can borrow US dollars.

The US Fed does not borrow US dollars. It buys and sells US bonds to control US dollar money supply. The quantity of US Bonds in circulation is set by the US Treasury, not the Fed. The Fed has other mechanisms to control money supply (e.g., the discount rate, reserve requirements for banks, etc) but intervention in the US Bond market is the most important.

..This is exactly what is happening in Africa when we send aid there. All the rice farmers are stuffed, since you can go and get a load of free rice - and it will even be brought to your village free! No more 3 hour walk to the farmer up the road!

I agree with this assessment.

So there you have it. Don't give money to Africa. Relieve the debt, but don't send them food. For their sake!

I am confused. Relieving the debt is giving them money.

[nkt]

I am confused. Relieving the debt is giving them money.

No it isn't. It's not taking their money. It's a very different thing.

[Biochemist]

No it isn't. It's not taking their money. It's a very different thing.

Wait a minute. If I loan you $1000 at 10%, and then waive the debt 1 year later, didn't I just give you $1000? You could argue I also gave you thie interest that you ought to have paid, but I certainly gave you the $1000. How is this different?

[nkt]

Wait a minute. If I loan you $1000 at 10%, and then waive the debt 1 year later, didn't I just give you $1000? You could argue I also gave you thie interest that you ought to have paid, but I certainly gave you the $1000. How is this different?

But that isn't what happened at all.

 

If I borrowed the $1000 and paid you back $100 dollars a year for 35 years, then it would be more realistic. After 35 years, the remaining debt of $1100 dollars gets cancelled. The initial amount has gone up because I missed 5 years worth of payments due to civil wars, and you added the interest on to the capital.

 

For example, according to Jubilee USA, Nigeria borrowed $5 billion, has so far paid more than $16 billion and still owes $32 billion on that same debt!

 

So not the same at all.

 

See http://www.afsc.org/africa-debt/odious-debt.htm

 

For a scary quote:

Between 1970 and 2002 Africa received $540 billion in loans. Despite the fact that over that same period, African countries paid back $550--$10 billion more than the original loans--today they still owe another $293 billion.

 

And then you consider what the loans were generally used for! Arms, wars, filling secret bank accounts, genocide, and Cold War political struggles...

[Skippy]

If I borrowed the $1000 and paid you back $100 dollars a year for 35 years, then it would be more realistic. After 35 years, the remaining debt of $1100 dollars gets cancelled. The initial amount has gone up because I missed 5 years worth of payments due to civil wars, and you added the interest on to the capital.

 

For example, according to Jubilee USA, Nigeria borrowed $5 billion, has so far paid more than $16 billion and still owes $32 billion on that same debt!QUOTE]

Your post says nothing about the payment schedule of Nigeria, or where they got the money for those payments.

--From one of your posts you say you have been to the university. I assume you have, or are familiar with credit cards; e.g.- American Express, MasterCard, Visa, Diner's Club, etc.? Just in case you are not - If you have one of those cards and you charge $1000, you will receive an invoice the following month. The invoice will show your balance as well as the minimum payment allowed to keep from receiving penalties. Whatever amount you pay (unless it is the entire balance) you will receive another invoice the next month with the remaining balance and the interest you were charged for the balance. IF you pay only the minimum payment, you will end up paying far more than double the orginal "loan" amount (which is what a credit card company does). Compound that by using another loan to pay the minimum payment from the first loan and you will be facing bankruptcy in a short time. A country will just have its credit extended until some socialist "musician" uses his celebrity to get your loans taken care of. :wave:

[Biochemist]

If I borrowed the $1000 and paid you back $100 dollars a year for 35 years, then it would be more realistic. ...

Suppose my cost for that money, on average, over 35 years was $97. Are you suggesting that the $105 that I "made" now offests the original loan?

[Biochemist]

For a scary quote:

 

For a scary quote: Quote:

Originally Posted by http://www.data.org/whyafrica/issuedebt.php

Between 1970 and 2002 Africa received $540 billion in loans. Despite the fact that over that same period, African countries paid back $550--$10 billion more than the original loans--today they still owe another $293 billion.

 

 

 

And then you consider what the loans were generally used for! Arms, wars, filling secret bank accounts, genocide, and Cold War political struggles...

 

Nkt- All this proves is that the buyers don't understand interest. My daughter was shocked to see the aggregate interest that she is going to pay on her first mortgage over 30 years, and asked me whether she ought to increase her payments to decrease total interest paid. I told her not to, because her return on the debt was higher that then debt cost. That is, she is making money by borrowing, and it it lucidicrous to look at expenses only unrelated to the gains associated with it. It would actually be much more reasonable for her to borrow MORE money and buy another house (assuming she could afford the cash flow).

 

The notion that African countries have borrowed $540 Billion, paid back about $550 Billion (over 30 years) and still ONLY owe $293 billion only shows that the original interest rate granted was ludicrously low, and that the lenders have aready lost substantial amounts of money in the interim (compared to other competitive investments).

[nkt]

Nkt- All this proves is that the buyers don't understand interest. My daughter was shocked to see the aggregate interest that she is going to pay on her first mortgage over 30 years, and asked me whether she ought to increase her payments to decrease total interest paid. I told her not to, because her return on the debt was higher that then debt cost. That is, she is making money by borrowing, and it it lucidicrous to look at expenses only unrelated to the gains associated with it. It would actually be much more reasonable for her to borrow MORE money and buy another house (assuming she could afford the cash flow).

I suspect you are wrong in your idea. It is far better to pay back double your monthly mortgage payment, as this will reduce your repayment time to a mere 10 years! Unless your daughter has somehow got a loan at or below the rate of inflation, she will lose a large fortune even at low interest rates, over 30 years. That's how banks make money!

 

The notion that African countries have borrowed $540 Billion, paid back about $550 Billion (over 30 years) and still ONLY owe $293 billion only shows that the original interest rate granted was ludicrously low, and that the lenders have aready lost substantial amounts of money in the interim (compared to other competitive investments).

Well, the lenders should have done a credit assessment, then stuck to the results! You wouldn't loan me $10 billion on spec, would you? There is no way, unless you are reasonably sure you will get the money back.

 

You certainly shouldn't force people to devalue their currency to get another loan to repay the first loan, which then means that the loans in other currencies (remember what I said about the Fed. Reserve borrowing dollars?) are suddenly way more expensive.

 

Although massive compound interest is the way of the world, it isn't exactly fair. Forcing the nightmare of nationalisation, conversion to specified cash crops, etc. are not a good idea.

 

How would you feel if the bank forced your daughter to become a telemarketer for the next 25 years to keep her home? Even with the knowledge that all that work was moving to India? Or would be replaced soon by AI voice recognition?

Making an entire country dependant on the sale of coffee is a bad idea, since they now cannot feed themselves, and then, because another country is pushed to grow nothing but coffee, and another, the calculations for that first country are then utterly wrong! They can't make the payments, nor feed themselves, because you can't eat coffee. Then a bit of a recession, and sales of cash crops drop, and you have a disaster. So you take out another loan...

 

You lose a tiny 2% in fees (billions!) each time, and you are doing well. In reality, they cost a whole lot more. Pumping all the money out of a country for 35 years into the pockets of a bank is not the best way to help that country grow. Nor is flooding them with cheap food and cheap medium- and high-tech that cannot be produced in that country without billions in expenditure, industry, training and lots of time.

[Skippy]

See http://www.afsc.org/africa-debt/odious-debt.htm

And then you consider what the loans were generally used for! Arms, wars, filling secret bank accounts, genocide, and Cold War political struggles...

Remember "Baghdad Bob?" Rudolph Hess? The website you lead us to is just that, a propaganda site. Remember this axiom: Everything you find on the internet is not truth.

Your data may have been correct... I just couldn't stomach the Socialist propaganda surrounding on the reat of the site.

[Biochemist]

I suspect you are wrong in your idea. It is far better to pay back double your monthly mortgage payment, as this will reduce your repayment time to a mere 10 years! Unless your daughter has somehow got a loan at or below the rate of inflation, she will lose a large fortune even at low interest rates, over 30 years. That's how banks make money!

It is convenient that you have underlined what is unclear to you. Banks make money by lending at a rate higher than their cost. They borrow money at a mix of rates, incur adminsitation costs, and then reloan the money. The difference is their margin. My daughter borrows money at the bank rate, buys a house that appreciates faster than the bank rate, and the difference is her margin. I am not wondering whether I am correct on this.

Well, the lenders should have done a credit assessment, then stuck to the results! You wouldn't loan me $10 billion on spec, would you? There is no way, unless you are reasonably sure you will get the money back.

They did. Now you are arguing against your own case. The initial calculation by the lender for any loan always includes not only the cost of capital (i.e., their cost of loaned funds) but also the risk of default. No one would loan if the risk of default is 100%. If the lenders forgive these loans, they will very probably have lost money (net) overall on the deal(s).

You certainly shouldn't force people to devalue their currency to get another loan to repay the first loan, which then means that the loans in other currencies (remember what I said about the Fed. Reserve borrowing dollars?) are suddenly way more expensive.

I give up. No one is forcing anyone to do anything except honor their contracts. If they default, no one will ever loan to them again. And the fed does not borrow dollars. I don't know why you keep repeating this.

How would you feel if the bank forced your daughter to become a telemarketer for the next 25 years to keep her home?

I expect my daughter to repay her mortgage. If she does not, I expect he to lose her home. That is the deal. That is what a mortgage is. She is not entitled to a home. She bought one with debt. If she can't honor the deal, she should lose the asset. That is the way ethical people relate across an ethical contract.

[nkt]

Remember "Baghdad Bob?" Rudolph Hess? The website you lead us to is just that, a propaganda site. Remember this axiom: Everything you find on the internet is not truth.

Your data may have been correct... I just couldn't stomach the Socialist propaganda surrounding on the reat of the site.

The counter to that axiom is that you will find a lot of truth on the internet you won't find elsewhere!

 

It's a fact that most of Africa has been in one war after another for decades, it's a fact that Mugabe and others have billions salted away abroad while their people starve. If you read "The Emperor," by Kapuscinski, it tells an incredible tale, all of it true. And yet Hillie Salassie was one of the *better* leaders.