Author Topic: So long AIG, and thanks for $22.7b in profits from the bailout  (Read 11619 times)

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Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #60 on: December 13, 2012, 02:21:40 PM »

Offline Cman

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According to whom? Inflation is easily defined as the increase in money supply
No. Inflation is defined as the general rise in level of the prices of goods/services. An increase in the money supply can cause inflation, but it does not necessarily cause it. We are living in one scenario where it does not.

Remember: Brendan called it a tax on people who hold the USD. It's not a tax unless the value of their currency goes down, which can only be caused by the definition of inflation that I used, not the one that you used.

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and is most visible by tracking the price of commodities. Government, creating the inflation, is not going to report it honestly, but your wallet will.
It is not possible for government to hide real inflation; prices are public. Even if you don't agree with the officially reported figures for inflation, other organizations like the Billion Prices Project have statistics that support the government figures. An argument that the government is covering up real inflation, has no basis in fact.

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Has gas gone up since the bailouts? What about food? Gold? Silver?  Yes, across the board.
Prices go up constantly, independent of bailouts, natural disasters, the color of the sky, or anything else.

You obviously don't eat or buy gas and other types of energy. What I pay to feed my family of 4 is significantly higher than it was a few years ago. Prices don't rise that fast on their own. You can provide us all the "definitions" of inflation you want and I can give you real world examples of why you are flat-out wrong.

Yes, prices have risen.

However, a pet peeve of mine is when people cherry pick the low gas price from 4 years ago.  Yes, gas was low, but that's bc the economy was in the tank (no pun intended). But, it is also true that gas prices are now about the same as they were 4.5 years ago, ie.: right before the economy crashed.
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Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #61 on: December 13, 2012, 02:29:39 PM »

Offline Interceptor

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You obviously don't eat or buy gas and other types of energy. [...] You can provide us all the "definitions" of inflation you want and I can give you real world examples of why you are flat-out wrong.
Can we please discuss this subject without making it about me personally?

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What I pay to feed my family of 4 is significantly higher than it was a few years ago. Prices don't rise that fast on their own.
Inflation from the increase in the size of the monetary supply is not the only thing that causes prices to rise. Inflation causes the general rise in prices. But specific prices are subject the normal effects of supply/demand.

Gas is particularly sensitive to things that have nothing to do with inflation at all: wars, politics, the fact that oil is not infinite, increased demand from other non-US countries, etc. Food prices are tied to to price of oil, and in fact track the price of oil pretty closely. This is in addition to other things like droughts and other natural disasters that depress supply and increase prices.

It does not follow that gas/food is more expensive because of the Federal Reserve.

I do not subscribe to your Keynesian view of economics.
There is nothing Keynesian about my argument. I am pointing out that despite the massive increase in the money supply, it hasn't manifested itself as inflation, which is the only way that you could view this as a "tax". The Federal Reserve can destroy money just as easily as create it, which is ultimately what it will do.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #62 on: December 13, 2012, 02:36:21 PM »

Offline Interceptor

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However, a pet peeve of mine is when people cherry pick the low gas price from 4 years ago.  Yes, gas was low, but that's bc the economy was in the tank (no pun intended). But, it is also true that gas prices are now about the same as they were 4.5 years ago, ie.: right before the economy crashed.
I found a faded receipt in the pocket of an old winter coat yesterday, from 2006. I only paid 2.13/gal. It was kind of a sad archaeological dig.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #63 on: December 13, 2012, 02:42:40 PM »

Offline Rondo2287

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According to whom? Inflation is easily defined as the increase in money supply
No. Inflation is defined as the general rise in level of the prices of goods/services. An increase in the money supply can cause inflation, but it does not necessarily cause it. We are living in one scenario where it does not.

Remember: Brendan called it a tax on people who hold the USD. It's not a tax unless the value of their currency goes down, which can only be caused by the definition of inflation that I used, not the one that you used.

Quote
and is most visible by tracking the price of commodities. Government, creating the inflation, is not going to report it honestly, but your wallet will.
It is not possible for government to hide real inflation; prices are public. Even if you don't agree with the officially reported figures for inflation, other organizations like the Billion Prices Project have statistics that support the government figures. An argument that the government is covering up real inflation, has no basis in fact.

Quote
Has gas gone up since the bailouts? What about food? Gold? Silver?  Yes, across the board.
Prices go up constantly, independent of bailouts, natural disasters, the color of the sky, or anything else.

Prices did go up before the bailout that's true, that doesn't mean the bailouts didnt play a significant role since.   That's a non sequitur
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Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #64 on: December 13, 2012, 02:44:15 PM »

Offline angryguy77

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You obviously don't eat or buy gas and other types of energy. [...] You can provide us all the "definitions" of inflation you want and I can give you real world examples of why you are flat-out wrong.
Can we please discuss this subject without making it about me personally?

Quote
What I pay to feed my family of 4 is significantly higher than it was a few years ago. Prices don't rise that fast on their own.
Inflation from the increase in the size of the monetary supply is not the only thing that causes prices to rise. Inflation causes the general rise in prices. But specific prices are subject the normal effects of supply/demand.

Gas is particularly sensitive to things that have nothing to do with inflation at all: wars, politics, the fact that oil is not infinite, increased demand from other non-US countries, etc. Food prices are tied to to price of oil, and in fact track the price of oil pretty closely. This is in addition to other things like droughts and other natural disasters that depress supply and increase prices.

It does not follow that gas/food is more expensive because of the Federal Reserve.

I do not subscribe to your Keynesian view of economics.
There is nothing Keynesian about my argument. I am pointing out that despite the massive increase in the money supply, it hasn't manifested itself as inflation, which is the only way that you could view this as a "tax". The Federal Reserve can destroy money just as easily as create it, which is ultimately what it will do.

I'm not making it personal, but your comments are not based in reality. Seems like you are ignoring what's happening in the real world to support your argument.

Food is going up, energy has not come down, but has remained high for a long time now, yet you assign this to normal price increases. Step back an connect the dots. I don't know if you have a family to support, or what your expenses are, but if you don't, you probably don't understand what's been going on as well as those of us who do. These increased prices have hit the bottom line for many families, to say it's normal isn't based in anything but a fantasy.

Increased money supply causes money to be worth less. Inflation may not have not entered into the hyper phase yet, but it is there, and it's real. At some point, it will become worse. It's not normal for us to be paying as much as we are for the things we need in such a short period of time without an outside influence. Pumping more money into the economy and printing more will only exacerbate this problem. If it doesn't change, we are all going to suffer.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #65 on: December 13, 2012, 02:47:03 PM »

Offline nickagneta

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The price of gas in the summer of 2008 was over $4.00 a gallon. By the time the election rolled around it was hovering at around $1.60. It has since steadily climbed to its current price.

Given all that has happened since the summer of 2008 I seriously doubt the price of gas is tied into inflation given its precipitous decrease over a short period of time then large increase.

Supply/demand/wars/external economic factors are probably much more significant causes for the price of gas being where it was over the last 4 years than inflation.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #66 on: December 13, 2012, 02:48:50 PM »

Offline fairweatherfan

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However, a pet peeve of mine is when people cherry pick the low gas price from 4 years ago.  Yes, gas was low, but that's bc the economy was in the tank (no pun intended). But, it is also true that gas prices are now about the same as they were 4.5 years ago, ie.: right before the economy crashed.

It's even a bit cheaper here than it was 5 years ago - we're actually under $3 a gallon for the first time since the crash.

I used to think people who cited the rise in gas prices since the crash and ignored the ultra-high prices beforehand were deliberately making an insincere argument, but now I think a lot of people sincerely don't remember, because they've been pointed to January 09 as a starting point for so long.  Can't decide if that's more or less troubling.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #67 on: December 13, 2012, 02:50:23 PM »

Offline angryguy77

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The price of gas in the summer of 2008 was over $4.00 a gallon. By the time the election rolled around it was hovering at around $1.60. It has since steadily climbed to its current price.

Given all that has happened since the summer of 2008 I seriously doubt the price of gas is tied into inflation given its precipitous decrease over a short period of time then large increase.

Supply/demand/wars/external economic factors are probably much more significant causes for the price of gas being where it was over the last 4 years than inflation.

Inflation might not be the only reason for gas being so high, but it does play a big part.

I do agree that using 08 as a starting point is a bit disingenuous. It shot up before that and I was not a fan of republicans playing that game.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #68 on: December 13, 2012, 02:53:25 PM »

Offline Rondo2287

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Also back to the topic at hand, my tax professor last night laughed at the notion that the government made money on AIG
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Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #69 on: December 13, 2012, 02:56:59 PM »

Offline nickagneta

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Also back to the topic at hand, my tax professor last night laughed at the notion that the government made money on AIG
As do I.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #70 on: December 13, 2012, 03:01:44 PM »

Offline fairweatherfan

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Also back to the topic at hand, my tax professor last night laughed at the notion that the government made money on AIG
As do I.

After looking into it, I think we made a profit on the bailout loans specifically, but on the entire package in aggregate, no, almost certainly not.

Still, it's better than not making money on any portion of the deal.  But even if we made $100 billion the concern needs to be with making sure the next bailout doesn't ever happen.  Not optimistic on that front either.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #71 on: December 13, 2012, 03:02:44 PM »

Offline Cman

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Also back to the topic at hand, my tax professor last night laughed at the notion that the government made money on AIG

Quick question for your tax professor:
When the govt sells its stake in GM at a "loss" and right leaning web sites  try to skewer the government for its "bad investment", will your tax professor laugh at the notion that the government lost money on GM?
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Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #72 on: December 13, 2012, 03:03:10 PM »

Offline Cman

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Also back to the topic at hand, my tax professor last night laughed at the notion that the government made money on AIG
As do I.

After looking into it, I think we made a profit on the bailout loans specifically, but on the entire package in aggregate, no, almost certainly not.

Still, it's better than not making money on any portion of the deal.  But even if we made $100 billion the concern needs to be with making sure the next bailout doesn't ever happen.  Not optimistic on that front either.

TP, I'm on board with that.
Celtics fan for life.

Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #73 on: December 13, 2012, 03:12:08 PM »

Offline Rondo2287

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Also back to the topic at hand, my tax professor last night laughed at the notion that the government made money on AIG

Quick question for your tax professor:
When the govt sells its stake in GM at a "loss" and right leaning web sites  try to skewer the government for its "bad investment", will your tax professor laugh at the notion that the government lost money on GM?

Are you implying the gov made money on GM?  If so I can ask.  I think she laughed because the government certainly did not make money on AIG.  Even though that is the narrative being pushed
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Re: So long AIG, and thanks for $22.7b in profits from the bailout
« Reply #74 on: December 13, 2012, 03:19:08 PM »

Offline Cman

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Also back to the topic at hand, my tax professor last night laughed at the notion that the government made money on AIG

Quick question for your tax professor:
When the govt sells its stake in GM at a "loss" and right leaning web sites  try to skewer the government for its "bad investment", will your tax professor laugh at the notion that the government lost money on GM?

Are you implying the gov made money on GM?  If so I can ask.  I think she laughed because the government certainly did not make money on AIG.  Even though that is the narrative being pushed

I'm confused now. You are saying that the Treasury did not make money on its investment in AIG?
Whether it was a good idea or not is another issue, and clearly many on this board think it was not a good idea, for a whole host of reasons.
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