Are you the moron who shouted "Keep your government hands off my Medicare." ?

No jerkoff! Medicare is pure fraud where people in North Dakota receive half the benefit per person in $ as someone in Florida. Why not give everyone the cash or voucher!

Wow... Do you realize your beloved Norway's healthcare system is essentially Medicare for all single payer tax funded socialized medicine?

Also, north Dakota is a very significant net recipient of federal money. It gets a lot more in federal spending and benefits than it pays in federal taxes. Do you think that's actually not enough and giving even more to ND is worth making healthcare for seniors a lot less efficient and a lot more expensive by replacing Medicare by vouchers?

Do some math. Decide on the inflation and deflation rates you want to assume in each scenario and try to understand how much higher the real return would have to be to make your first scenario possible.

Norway's healthcare system is basically a benefit say $5000. Instead of deflation, the government choose to allow their currency to inflate and give everyone "medicare". They didn't want to attract outside investors to their currency.

As for ND, two wrongs don't make a right. North Dakota may be a net recipient of federal money but those benefits should be eliminated. Medicare is a flawed system because it is paid by procedure (leading to fraud). Health care vouchers is flawed system because some people are sicker than others. The government should pay for the doctors, in a free market type system.

There is only effective money supply. If m1 is half in situation 1 compared to 2. The profits might be half, but the purchasing power is double. In the deflationary environment, the workers get to keep their savings and work. In the inflationary situation, the government gets to spend their savings and work.

You haven't addressed my post. Take the two scenarios you outlined above and tell us what the real return and inflation (or deflation) rate is for each so that you can actually make a valid comparison between the two investments:

Case A - 10% inflation
Gross Receipts $600
Above the line taxes (income, capital gains, materials) $300
Profit $100
Taxes (30%) $30
Net Profit $25
Cash $100
Profit needed to replace cash to inflation $10
Effective Profit $15

Case B - 0% inflation
Gross Receipts $600
Above the line taxes (income, capital gains, materials) $300
Profit $100
Taxes (30%) $30
Net Profit $25
Cash $100
Profit needed to replace cash to inflation $0
Effective Profit $25

Profit without inflation exceeds profit with inflation of the identical companies. In the 1st case stockholders get $15 and the government gets $330 in taxes.

I noticed another fraud. If the government pays for doctors, the doctors will unionize and form lobby groups creating more fraud. A better system would be to provide a voucher like $3000, you use that to support a hospital that you use and think are doing a good job. Generally where your primary care physician is located. You can use any hospital though nationwide.

You stated that there was 10% inflation in the first scenario, yet your numbers indicate that nothing has inflated. There is no difference in inflation between these two. You just randomly subtracted $10 from the first one's profits and then blamed it on inflation.

You're also needlessly complicating things. The only numbers relevant to this discussion are the initial investment, the return, and the inflation rate. What it comes down to is that with inflation, the initial investment becomes cheaper and less consequential over time, allowing for greater real returns. With deflation your initial investment becomes larger and larger over time, diminishing the real return of the enterprise.

1. No I picked two companies, with the same revenues under inflationary and deflationary environments. I took 10% off the profits of one since they had $100 in cash on the books in which they would lose $10 to inflation. On a side note, a company would gain some value back with the debt they have on the books. But, that should already be factored in by the banks.

2.
Company A
Initial Investment $10000 (Year 2015)
Profit Year 1 $1000
Profit Year 2 $1100
Profit Year 3 $1210
Purchasing Power Year 1 ($2015) $1000
Purchasing Power Year 2 ($2015) $1000
Purchasing Power Year 3 ($2015) $1000

Company B
Initial Investment $10000 (Year 2015)
Profit Year 1 $1000
Profit Year 2 $900
Profit Year 3 $810
Purchasing Power Year 1 ($2015) $1000
Purchasing Power Year 2 ($2015) $1000
Purchasing Power Year 3 ($2015) $1000

So you will probably say look at B you won't get back the initial investment. The thing is the deflation rate is unsustainable. But you have to consider other things. In Scenerio B, saving cash will only invest when the investment returns are greater than the savings return: currency deflation rate <= investment return. But you don't consider that currency can be an investment too, and is just as real as a business investment. When you gain cash, you will also gain more expensive items you can purchase.

I heard Alan Grayson, wanting to take the money banks have on reserve at the Federal Reserve and loaning it out. He does not realize the only reason the money is there is because they are forced to keep it there as part of fractional reserve lending. Nobody wants to hold cash in an inflationary system. However, the loans and investments made are not necessarily good for the people. It may be good for the government, banks, and those with access to credit,, but the people that worked and earned the money would be better off in a deflationary environment.

If you do all the math you will find, inflation acts as a tax, while deflation acts as a stimulus.

I think I need to quote the only part of your post above that makes any sense.

Also, http://on.wsj.com/oCIrOn

Actually that's not even totally true. We've got inflation in the US (assuming you are American), and I'd guess you have cash in your pocket. I'd further guess you have money tied up in savings/checking accounts that don't return all that much interest, which is *close* to holding cash.

Now, it is just one or two words that makes that one statement from steel correct and that is 'noone wants to hold *large amounts of* cash in an inflationary system'

$1.84 trillion in cash and other liquid assets. other liquid assets might be tbills or tbonds that earn interest.

Given that there are $29 trillion of corporate securities

Bonds Corporate: $7.54 trillion

The reality is corporations hold far more debt than cash. They hold cash and consider it a short-term asset. Corporations also hold a lot of bank loans and credit facilities. All tax deductible btw.

We have had 3 deflationary periods in the U.S. I am familiar with, from about 1946 to about 1950 (even up to 1970). In the late 1990s, and the 19th and early 20th century. All booms. They turned San Francisco from wilderness to one of Americas great cities in 20 years on a gold standard and deflation. They even burned it down and rebuilt it.

what? Steel, how do you define deflationary?

Did you actually look at the CPI data from 46 to 50?

http://research.stlouisfed.org/fred2/series/CPIAUCNS

So from 46 to 49, prices increased more than 30% over 3 years and you call that deflationary? Please explain...

Generally m1. Even on the gold standard there were periods of inflation and deflation, but the dollar value would always come back. I can also think of another year 1920. The solution according by Woods, was that Harding did what businesses did, cut government. It lasted 1 year.

I also consider balanced budgets as periods of deflation. As there really is no need for the fed to print money if there are less bonds needed.

Price inflation is very dependent on the business cycle. However, I think Roosevelt generally ruined the country, because of him 1/2 the country think spending is the solution to depressions. Also, Reagan ruined the country because of him people think cutting taxes will increase revenues.

In summary, Obama should replace the 500 billion jobs bill with 500 billion in immediate cuts.

In the chart above price inflation generally lags m1 inflation by a couple years. Budgets were close to balanced til about 1970. With the biggest surplus around 1948.

FWIW, this is also happening right now: http://streetlightblog.blogspot.com/...s-like-in.html

It's absolutely terrible.

Also, you need to stop watching those Mises propaganda videos.

It is good we are cutting government, but the problem is we are not cutting it enough to balance the budget. With these few government jobs gone (< 3%) do you know the difference? As Romney says under JFK, government Federal , State, and Local took up 27% of the economy, today it takes up 37%. In China, it is like 10%.

You generally love what feeds, you. If government is source of your income, you will love government. It seems the federal government collects the most taxes, yet it has the fewest employees. That can be cut drastically. State and local can be cut more. I see no difference in services.

I have seen help wanted signs at fast food restaurants, these government employees can apply there.

As more people move into the private sector, the average private sector worker will work less hours and become more wealthy taking longer vacations. Since they don't have to work so the government employee can play. Instead they get help which takes stress off them.

If we could cut teacher pay 50%, we could hire 25% more teachers and use the rest for deficit reduction. These are the same teachers that want to keep their unions and are against vouchers. We should cut drastically now, to quicken the pain, before growth.

FYP

When you go to McDonalds for a job, McDonalds dictates (and government mandates) your pay. Everyone sees nothing wrong with this. They go to McDonalds and get a McDouble, small fries, and a sweet tea for $3 and wonder why they have such good prices.

So you people who want to give the schools the same power, are judged unreasonable. In an ideal world, like Finland, all high school science teachers should have a masters degree. But, the point is cities should put up a price, and if it is too low no one will apply, if it is too high and they have 10 applicants, they can lower the price. Otherwise they can have a voucher system.

This is why no one complains about the pay of private school teachers, because they operate under this system.

So you want to have the price set so only one person applies for each job (on average)? Seriously? If you're running a business and you have 10 applicants for a position you advertise you think that's a bad thing, that you made a mistake? (since you're comparing public schools to businesses, I'm taking it just a step further).

This is hyperbolic, but I can guarantee that any business that works that way is a crappy business.

(Or did you suddenly switch the topic of the conversation without letting anyone know from teacher salary to talking about the tuition or something else like that?)

Steel needs to change the topic continuously because none of his arguments make any sense and any fact he uses to back them turns out to be contradicted by the data as soon as you look into it.

Do you deny private school teachers make less than public school teachers? How about voucher or homeschool teachers? It is the public unions that are destroying the country. They are one the the largest components of causing the recession. End the unions and the recession is over. Just look at the right to work states. They demand their salary at the cost to everyone else. I never said having 10 qualified applicants is a bad thing, I just said it is a good reason to lower the wage of the position. All businesses operate this way, to save money and increase productivity.