Huzzah! Minimum Wage Increase Shot Down in Senate

[Harlock]

Link (http://www.newsday.com/news/politics/wire/sns-ap-senate-rollcall-kennedy-amendment,0,1464091.story?coll=sns-ap-politics-headlines).

Whew, that was a close one.

[slipknottin]

woot.

[fishbait912]

y is this a good thing? i could use that... i actually need a job.. :sad

[slipknottin]

y is this a good thing? i could use that... i actually need a job.. :sad

http://dev33256-01.fa02.fsu.edu/CH4LEC.pdf#search='what%20is%20a%20price%20floor%2 0economics'

Minimum wage is a price floor.

[Harlock]

y is this a good thing? i could use that... i actually need a job.. :sad
Imagine, if you will, everything you now buy costing you more because prices went up to cover the cost of paying low wage workers 2 more dollars per hour. Raising minimum wage NEVER and I repeat NEVER puts money into the pockets of those who need it most (presumably the ones ho earn minimu wage) because the cost of everything they have to have from food, clothing, gas, EVERYTHING goes up right in line with the price of minimum wage.

Also, it just helps keep jobs in America when minimum wage stays lower. We lose enough unskilled labor jobs to China, Mexico, Taiwan, etc. etc ad naseum. So, my job-seeking friend, rest assured, this is good news for you and not bad!

[slipknottin]

At its most basic, price floors create a surplus, in this case a surplus of workers. Instead of the maybe 2 or 3 people who want the job at $5.00 an hour, 10-15 might want it at $7.00 an hour, and therefor create unemployment.

Sociologists will tell you that when such competition occurs, it is not those who need it who benefit, it is the middle to upper class kids that will obtain these jobs in more cases than not. Generally, these are not the people the minimum wage laws are intended to help, and those who it does intend to help, those trying to survive off of a low paying job are far more likely to be let go.

If you want to get more into it, you can graph out minimum wage, and you will find that you can calculate the losses and benefits to both the supply (labor) and demand (businesses). Assuming the calculation is done correctly, the losses will always exceed the benefits. Such a loss is called a deadweight loss. Its essentially a loss in efficiency.

[jonathan03]

Sounds like slipknottin takes economics. I remember price floor from economics 101 ;-)

Just reemmber that anything goes to congress is not very simple at all. I'm sure there was more to the bill than just a minimum wage increase. Several things are all voted on at once. It could be that the minimum wage increase was just a rider to something larger or there were a few unpopular riders. They usuauly put riders, or simple things that couldn't be a bill on their own all in one and vote on it.

It is very lilkely that this could be voted on again if it was a rider. If it was the main issue, then there is always next year (for those who want it passed).

Also, its not unexpected for there to be a little friction in congress since the election was so close. Sometimes the seemingly minute details can cause a bill to fail.

[Harlock]

Sounds like slipknottin takes economics. I remember price floor from economics 101 ;-)

Just reemmber that anything goes to congress is not very simple at all. I'm sure there was more to the bill than just a minimum wage increase. Several things are all voted on at once. It could be that the minimum wage increase was just a rider to something larger or there were a few unpopular riders. They usuauly put riders, or simple things that couldn't be a bill on their own all in one and vote on it.

It is very lilkely that this could be voted on again if it was a rider. If it was the main issue, then there is always next year (for those who want it passed).

Also, its not unexpected for there to be a little friction in congress since the election was so close. Sometimes the seemingly minute details can cause a bill to fail.
Well, the Republican compromise of $1.10 increase was also voted down. No biggie.

[happychem]

At its most basic, price floors create a surplus, in this case a surplus of workers. Instead of the maybe 2 or 3 people who want the job at $5.00 an hour, 10-15 might want it at $7.00 an hour, and therefor create unemployment.
I agree with you, but I don't understand the reasoning presented here. I don't so much agree that more people wanting a job for a higher wage would increase unemployment, since for them to want the minimum wage job they would have to be unemployed to start with.

On the other hand, at $5/hour an employer might be able to hire 6 people, but at $7/hour the employer can only afford to hire 5, thus creating unemployment, or stifling the growth of the job market, depending on the current trend, growth or decay.

But then I'm not an economist and I just reason these things as best I can. There's probably some economics thing that I don't know about, so back to my original statement, I don't disagree, just don't understand.

[FL Knifemaker]

Pull the hammer back and cock it, light the fuse on the bottle rocket. Does anyone hear something ticking???? :p

[Beeker]

It is the minimum wage that caused workers to lose their jobs. Because employers are told that they have to pay their workers a certain amount, they got rid of the small job workers, window washers, broom pushers, etc. and pushed those jobs onto existing employees that already get paid at least minimum wage.
Some great links:
www.mises.org
www.fee.org
www.fame.org
www.usagold.com/AllWorkandNoPay.html
www.geocities.com/tthor.geo/debasedmoney.html
etc., etc. If you want more, let me know. :)

[happychem]

But then, there is some benefit to a minimum wage. I think that it's important that someone is able to feed, clothe and keep a roof over their head if they have a job. There must be a balance in there somewhere between minimum price of goods, affordability of living and the like and the minimum wage. More work for economists I suppose.

[slipknottin]

I agree with you, but I don't understand the reasoning presented here. I don't so much agree that more people wanting a job for a higher wage would increase unemployment, since for them to want the minimum wage job they would have to be unemployed to start with.


Ok, lets say there are 30 jobs at $5.00 an hour, and 15 at $7.00 an hour because businesses are inherently limited in how much labor they can afford to buy. That is a 50% reduction in job avaliability. If 20 people were employed before, then thats 5 more people added to unemployment. If all 30 were employed, then thats 15 who are now unemployed.

[slipknottin]

But then, there is some benefit to a minimum wage. I think that it's important that someone is able to feed, clothe and keep a roof over their head if they have a job. There must be a balance in there somewhere between minimum price of goods, affordability of living and the like and the minimum wage. More work for economists I suppose.

As already explained, sociologists who have studied the issue find that when minimum wage is increased, those who benefit tend to be the children of the middle and upper class. Those who depend on such jobs for their survival are far more likely to be laid off, or have their hours cut back.

[tomm10]

Minimum wage is a bit of a joke to me. I've never met a person who has lived off of one minimum wage job. I've met plenty who lived off of a couple of them but never off of one.

Although it pains me to say it, I have to agree with Slip here ;) Minimum wage increases benefit part time employees ie. kids.

[happychem]

Ok, lets say there are 30 jobs at $5.00 an hour, and 15 at $7.00 an hour because businesses are inherently limited in how much labor they can afford to buy. That is a 50% reduction in job avaliability. If 20 people were employed before, then thats 5 more people added to unemployment. If all 30 were employed, then thats 15 who are now unemployed.
Yes, that's exactly what I was saying, that makes perfect sense to me.

The point that I was making was that your original post said:
Instead of the maybe 2 or 3 people who want the job at $5.00 an hour, 10-15 might want it at $7.00 an hour, and therefor create unemployment. Which didn't make sense.

[slipknottin]

The point that I was making was that your original post said: Which didn't make sense.

Well, its really the same thing. Fewer jobs will create more competition, and more unemployment.

[Harlock]

Is raising minimum wage when the dollar is a bit weak a smart move anyway? By the way, Kennedy was indignant about this. And of course people were out carrying signs. Are people that easily misled?

[Beeker]

If they would stop inflating the currency there would be no need for a raise in minimum wage. They should anchor the dollar to gold again. But, of course, that would never happen because then they wouldn't be able to line their own pockets so easily. Also, if they anchored the dollar, it would be more difficult to get rid of the middle class. They can't disrupt their agenda. Read those links! Very revealing! Anybody who likes money should read a book called "The Creature From Jekyll Island" by G. Edward Griffin. It is the most amazing history book I have ever read. You can open to any page, start reading and understand what is being said, and it also reads like a novel, even though it is a non-fiction history of the "Federal Reserve System." If people knew what was really going on, there would be rioting in the streets!

[fishbait912]

i didnt see it like that i guess u guys are right

[slipknottin]

They should anchor the dollar to gold again.

I disagree, the ability to change the value of the dollar is the primary reason none of our recessions have turned into depressions. Their is no reason to tie our money to a random commodity like gold or silver.

[Beeker]

Slipknottin,
Gold and silver are not "random." They are what keep the value of the dollar stable. For example, in all seriousness, do you know what a "dollar" is?

[Harlock]

Slipknottin,
Gold and silver are not "random." They are what keep the value of the dollar stable. For example, in all seriousness, do you know what a "dollar" is?
Er, why are gold and silver inherently valuable?

[Beeker]

Because they hold intrinsic value. The scarcity of the metal makes it valuable. "If diamonds were as numerous as the sand on the seashore, you wouldn't dare give one to your fiance."

[slipknottin]

Slipknottin,
Gold and silver are not "random." They are what keep the value of the dollar stable.

Really? Are you telling me that the value of gold and silver dont vary? There is no inherent reason to use gold and silver over any other reasonably constant priced limited quantity goods. We could use sand, water, air, iron, copper, etc. It makes no real difference.

[Harlock]

That's overlooking something though. Scarcity has little to do with it. I have a one of a kind set of Snoopy bookends but it's only worth what someone is willing to give me for it. Same as gold, same as a dollar. They are not inherently valuable. They are only worth what someone is willing to do for them. So, if someone is willing to say, "You want fries with that?" for $5.15 an hour, the dollar is worth that. If no one was willing to do that for Snoopy bookends or an ounce of gold, then those would not be worth it. Rarity can affect the value people place on something, but all told, it is people that determine the value of anything. Dollars are rare enough for people to be willing to work for them... after all, money doesn't grow on trees. ;)

[tomm10]

Because they hold intrinsic value. The scarcity of the metal makes it valuable. "If diamonds were as numerous as the sand on the seashore, you wouldn't dare give one to your fiance."


Do a little bit of digging. Diamonds are no where near as scarce as the Debeers corporation would have you believe. the value of the diamonds is based purely on marketing. Similarly, gold and silver are metals that have little productive value. They're only valuable because they're shiny and make pretty things. They hold no more intrinsic value than a paper dollar really.

[Beeker]

If anybody really wants to know the answers to these questions, I already gave the links in post #11. This is one of my favorite subjects (for what reason, God only knows). I can give you all the places to find the real information you want. Not the crap you hear on the "news." The value of gold going down... Right. Maybe the stocks but never the coin in your pocket. The value of the metal in your hand only goes up. The only way it would go down is if the government and that privately owned business called "The Federal Reserve System" (which is not Federal, there is no reserve, and it is not part of the government system, it is a private business, a governmentally endorsed monopoly, created to make money, like any other person who starts a business) created a deflationary exchange, in which they would, overnight, without letting anybody know, start a completely new currency stating that your bank account that has about $1000 in it is now worth $100 of the "new dollars." Read up on it. I gave you the resources.

[Beeker]

tomm10,
What do you base that theory on?

[TKOS]

"Similarly, gold and silver are metals that have little productive value."

Not to disagree with all that is being said but gold does have a tremendous productive value. Mostly in the space industry and the automotive and computer trades as well. Plus silver and gold in their pure forms are generally very hypoallergenic.

And back to the debate.

[Harlock]

If anybody really wants to know the answers to these questions, I already gave the links in post #11. This is one of my favorite subjects (for what reason, God only knows). I can give you all the places to find the real information you want. Not the crap you hear on the "news." The value of gold going down... Right. Maybe the stocks but never the coin in your pocket. The value of the metal in your hand only goes up. The only way it would go down is if the government and that privately owned business called "The Federal Reserve System" (which is not Federal, there is no reserve, and it is not part of the government system, it is a private business, a governmentally endorsed monopoly, created to make money, like any other person who starts a business) created a deflationary exchange, in which they would, overnight, without letting anybody know, start a completely new currency stating that your bank account that has about $1000 in it is now worth $100 of the "new dollars." Read up on it. I gave you the resources.
Again, gold and silver are only worth what someone will pay for it. A dollar can be just as valuable as a bar of gold, and both could be worth less than a cone snail's shell or glass beads when you get down to it. There isn't any such thing as "intrinsic" value unless you are talking about things that are necessary to survive. Food, clothes, shelter are intrinsicly valuable because everyone has to have them to survive. Gold can't keep me warm at night, fill my belly or keep the rain off of me. Gold, silver, diamonds, beads, shells and dollars would all be worth jack and squat if some worldwide catastrophe took place. You know what wouldn't be? Yeah, food, shelter and clothing.

[Beeker]

For 5000 years people were using gold and silver for money. Each time they decided to use paper instead things fell apart and they went back to gold.
Slipknottin, you didn't answer my question.
Is anybody going to put a little effort into their answers and do a little research to find out if they really know what they are talking about? (the links on post 11)
If it weren't important why would the founders of this country write into the law (The US Coinage Act of 1792) the death penalty of those who debased the money?

[Beeker]

Harlock,
Have you heard of anybody valuing a snail shell over a bar of gold in any country in history?

[Harlock]

Heh, yes, look up the History of Rhode Island.

EDIT: Er, I was joking, you're all quiet now. Anyway, look back at my post before this one. If it doesn't make sense to you, then nothing else I say will. There isn't anything, I repeat anything that has intrinsic value due to rarity more than food, shelter and clothing. When Europeans first came to the Americas they were staggered by the amount of gold and silver they had. They traded what they thought was worthless junk for what the Native Americans had in spades, both parties feeling they had made the better deal. What I am trying to say is that even gold is worth only what someone is willing to give you for it. Same as a dollar.

[slipknottin]

The value of gold going down... Right. Maybe the stocks but never the coin in your pocket. The value of the metal in your hand only goes up.

Generally your right, the value of gold is pretty stable, and will mostly prevent inflation. However, controlling inflation is only part of monetary policy, and gold certainly has significant downsides when looked at in other aspects.

[slipknottin]

For 5000 years people were using gold and silver for money. Each time they decided to use paper instead things fell apart and they went back to gold.

Er, look at the history of economic recessions and depressions. Back on the gold standard there were far more fluctuations, and serious long lasting depressions.



Slipknottin, you didn't answer my question.
What question is that? What is money? Money is anything that is accepted in exchange for goods or services.

[Beeker]

Slipknottin,
No. The question was "What is a DOLLAR?" A DOLLAR specifically.

Give me an example of a recession or depression when we were back on the gold standard.

What should determine interest rates?

[Beeker]

Harlock,
Can we work out a trade? Name the place where we can meet and I will give you my paper dollars for gold or silver coins that have the same face value. PM me and we can work out a plan.

[Harlock]

Harlock,
Can we work out a trade? Name the place where we can meet and I will give you my paper dollars for gold or silver coins that have the same face value. PM me and we can work out a plan.
And the point of that is to prove...?

[Beeker]

I just want to give the "non-intrinsic value" theory a real life test.

[tomm10]

Slipknottin,
No. The question was "What is a DOLLAR?" A DOLLAR specifically.

Give me an example of a recession or depression when we were back on the gold standard.

What should determine interest rates?

Weren't we on the gold standard during THE depression? Wasn't it Nixon who tool us off the gold standard? Or am I just flat out wrong...which is always a strong possibility :)

Beeker, my little tyrade on diamonds is not my theory. I can't site any internet articles for you but I have read articles and seen a few Discovery channel type programs explaining the recent (past 100 years or so) history of diamonds.

DeBeers controls something like 90% of the diamonds dug out of the earth. They control the flow of the diamonds to the marketplace. It was their advertising around the turn of the century that started to convince lovestruck males that women had to be given diamond engagement rings. Ever notice that anybody who has an heirloom diamond ring can't trace it past the early 1900's? That because no one gave diamond engagement rings before DeBeers started pushing them.

Anyway, not really the point as Harlock has stated more succinctly what I was trying to say. The value is what people are willing to pay and even that is subject to influence.

I'll try to look up some articles about the diamond thing.

[slipknottin]

Slipknottin,
No. The question was "What is a DOLLAR?" A DOLLAR specifically.

The official currency of the US... Im not entirely sure where your going with this


Give me an example of a recession or depression when we were back on the gold standard.
http://www.lexis-nexis.com/Academic/2upa/Abe/RecessionsDepressionsPanics.asp

There were significant depressions and recessions on the gold standard, including the now infamous great depression.

For more reading on why the gold standard is not the best- http://www.lexis-nexis.com/Academic/2upa/Abe/RecessionsDepressionsPanics.asp


What should determine interest rates?

The debt free expansion should be pegged to the CPI.

[Beeker]

Do you know what caused the Depression of 29?

Nixon stopped redemption of gold internationally. That is why OPEC formed, because they didn't want to be paid with depreciating paper currency.

[Harlock]

I just want to give the "non-intrinsic value" theory a real life test.
Okay let's!

But, let's keep in mind, I know market values so would of course be unwilling to trade at face value. Does that make gold intrinsically more valuable? Most certainly not. All it proves is that someone is willing to pay more for, say a Silver Eagle than the $1 face value. Hey, in fact, if you're willing to give me market price rather than face value, I would turn right around and buy that 125 gallon aquarium setup with 2 Rena XP3s, 4x65W lights, etc. with the dollars you give me. In fact, let's skip the middle man and I would be willing to trade you gold and silver at above market value if you just brought me the Aquarium at that meeting. Does that now mean aquariums are worth intrinsicly more than gold and silver? No. All it proves is that ANYTHING is only worth what someone is willing to exchange for it. You're buying into a logical fallacy.

[Beeker]

Slipknottin,
Is the official currency, by law, paper or silver?

There is a common denominator in depressions and recessions. That is manipulation. What is easier to manipulate, commodity money or paper currency?

[slipknottin]

Slipknottin,
Is the official currency, by law, paper or silver?
Really doesnt matter at this point. I thought we were arguing the inherent benefits of the gold standard? Not wether one is legal or not. By and large, banks should be illegal as they create money as well.


There is a common denominator in depressions and recessions. That is manipulation. What is easier to manipulate, commodity money or paper currency?

As I said, I dont believe that an uncontrolled fed is the best solution, but certainly the gold standard is no miracle either.

[Beaker]

Should the medium of exchange be politically manipulatable?

[slipknottin]

Do you know what caused the Depression of 29?


"The current judgment of economic historians (see, for example, Barry J. Eichengreen, Golden Fetters) is that attachment to the gold standard played a major part in keeping governments from fighting the Great Depression, and was a major factor turning the recession of 1929-1931 into the Great Depression of 1931-1941."
-http://www.j-bradford-delong.net/Politics/whynotthegoldstandard.html

[slipknottin]

Should the medium of exchange be politically manipulatable?

Im not entirely sure what you mean. It should be tied to the CPI, so yes, the goverment should change the interest rates. But it should be in a locked step with the CPI so it is not up to their interpretation or judgement.

[Beaker]

Harlock,
What is the purpose of legal tender laws?

Slipknottin,
What CAUSED the Market Crash of 29 and The Great Depression?

[slipknottin]

Slipknottin,
What CAUSED the Market Crash of 29 and The Great Depression?

A number of reasons. Though Im fairly certain your going to give me a one line answer...

Inability of the fed to increase money supply (due to the gold standard)
Insane tarrifs
runaway optimism of the stock market

"Milton Friedman and Anna Schwartz argued in their book "A Monetary History of the United States, 1867-1960," that the highly conservative monetary policy followed by the Fed beginning in 1930, completely failed to counteract the tidal wave of bank failures in the early 30's.

Simply put, when a bank fails a large amount of money disappears from the economy, which has a depressing effect on prices and a stagnating effect on business activity. Depositors were not insured at that point, many losing all their savings. Business customers also lost their money and could not finance their activities; thus everyone linked to the bank or its customers was economically paralyzed in one way or another, including other banks! "

[tomm10]

I'm more curious as to what caused Beeker, a 252 post female to change to Beaker, a zero post male.

hmmmmm.

[Beaker]

What year was the Federal Reserve enacted?

[slipknottin]

What year was the Federal Reserve enacted?

1913, but we were still (and remained) on the gold standard.


"The essential feature of the Federal Reserve System, though, was its ability to pool the gold reserves of many banks and thereby make it easier for national member banks to issue notes. In simple terms, the Fed would allow banks greater freedom to inflate by giving them greater flexibility in skirting the restraints of the older gold standard.

In pre-Fed days, banks had to protect themselves against runs. They had to be careful of the amount of notes they issued and they protected themselves by carrying gold reserves. If a bank experienced a crisis, it had to find additional gold reserves by borrowing them from other banks—often at very high rates of interest. Problems emerged when you had economy-wide runs and all the banks tried to increase their holdings of gold at the same time. In the panic of 1907, for example, call money rates exceeded 100% (on an annual basis) on October 24 at the depth of the crisis. Many banks in cases like this would simply fail.

Bankers found this arrangement uncomfortable, since it crimped their ability to make profits—which they did primarily by inflating the currency. The Fed, then, was to be their safety net. The banking cartel was born. As Rothbard discusses in his A History of Money and Banking in the United States, the nation's financial elite mainly pushed for the creation of the Federal Reserve. They saw it as a "cartel device to enable the nation's banks to inflate the money supply in a coordinated fashion, without suffering quick retribution from depositors or noteholders demanding cash."

The Fed's early duties included the purchase and sale of gold (thereby influencing interest rates and money supply), the centralization of the banking system's gold reserves as discussed above, and acting as the lender of last resort, among other lesser activities.

Alan Meltzer, in his mammoth A History of the Federal Reserve, writes, "The Federal Reserve had little discretion. The founders intended the gold standard to work automatically…the rules of the gold standard limited the range within which they could set the discount rate." It was, at the outset, a small institution with little of the power and prestige that accompanies it today."

- http://www.mises.org/fullstory.aspx?control=1353&id=67

[Launcher]

Beeker (my fiance) gave me my own screen name so I don't get her in trouble. Don't get angry with her.

So, continuing with our conversation...

Thank you. You just made my case.

[slipknottin]

Already answered. It had nothing to do with the (eventual) elimination of the gold standard, as that was not the thought at the time...

Really, at the time the fed was created it had very little power to do much of anything.

[happychem]

I'm more curious as to what caused Beeker, a 252 post female to change to Beaker, a zero post male.

hmmmmm.
Good point Tom, and yet the new Beeker didn't pop up until post 47.

[jonathan03]

Do a lot of people actually make minimum wage? I'm really not sure if there are that many. Are there?

In any case, a price floor is only a factor if it interfere's with the lower limits of the price. For example, having a price floor for all cars of $10 would make no difference in the big picture since nobody sells them for that much anyway.

But about what percent of people are making minimum wage?

:OT:

Are you an economics major slipknottin?

[Launcher]

thank you for making my point but I'm not sure that you realize that you did. The Fed was designed to defeat the market discipline imposed by the gold standard. They could never have gotten it through congress in its ideal form. They had to get something through congress that they could change later on. Since 1913 the Federal Reserve Act has been amended over 100 times, and always to the benefit of the bankers.

[Harlock]

Harlock,
What is the purpose of legal tender laws?
What is the bearing of that and discussions of inherent/intrinsic value of gold? Answer, nothing, really. But, hey, I'm a nice enough guy and I'll bite. The purpose of the legal tender laws was to standardize a currency in the US and centralize production so that states no longer had the right to mint their own coinage and to make a money that must be accepted for payment of debts througout the US. That it was based on the gold standard at the time is of no real consequence to this debate. It could have just as easily been based on anything upon which people place value.

[Launcher]

Happychem,
I gave a quick explanation in #55.

[Harlock]

Beeker (my fiance) gave me my own screen name so I don't get her in trouble. Don't get angry with her.

So, continuing with our conversation...

Thank you. You just made my case.
Er, why? Bit off more than she could chew?

[Launcher]

No, I was looking for some information and saw your post. I enjoy studing the subject so I started answering. I don't want anybody to get angry with her so I had her set up a new account for me.

[slipknottin]

Do a lot of people actually make minimum wage? I'm really not sure if there are that many. Are there?
I dont know of any actual numbers, its compounded by whose working full and part time. There are many people working at or near minimum wage however, most of which are poor, minorities, or the young. I dont know of a single kid that didnt start out at a job paying at or near minimum wage...


In any case, a price floor is only a factor if it interfere's with the lower limits of the price. For example, having a price floor for all cars of $10 would make no difference in the big picture since nobody sells them for that much anyway.
Indeed.


Are you an economics major slipknottin?
Business and marketing major actually, though I generally take all the economics classes I can.

[Harlock]

Ah, well, welcome to the boards then!

[Launcher]

The monetary unit of the US was set in the Constiution in 1789. The U.S. Coinage Act of 1792 enforced it. Legal tender laws are only necessary to force people to accept something with no intrinsic value in payment of debt. Nobody has to twist your arm to accept something with intrinsic value in payment of debt. Paper currency makes legal tender laws necessary.

[Launcher]

Thank you, Harlock. Sorry for the confusion. :)

[greeneyedlady]

:OT: Hey Launcher when my hubby wants to argue with the guys here he just uses my account and preceeds it with the initials BEM so the guys know that he is the one talking and not me, but welcome to the boards :D

[slipknottin]

Legal tender laws are only necessary to force people to accept something with no intrinsic value in payment of debt. Nobody has to twist your arm to accept something with intrinsic value in payment of debt. Paper currency makes legal tender laws necessary.

Possibly, though there is no real reason to expect people to stop accepting paper currency without such laws.

[Launcher]

How about a store of value?

[Launcher]

Greeneyedlady,
Thank you.

[slipknottin]

How about a store of value?

How about it? Generally people arent going to decide one day that 'oh, this money is worthless'.

You would probably need to see some significant shakeup to the money supply, maybe a huge counterfitting ring or something for people to lose all trust in their money.

You could look at how dollars are treated internationally. There are no laws that force anyone outside of the US to accept dollars, yet they are eagerly accepted by nearly everyone.

[Harlock]

The monetary unit of the US was set in the Constiution in 1789. The U.S. Coinage Act of 1792 enforced it. Legal tender laws are only necessary to force people to accept something with no intrinsic value in payment of debt. Nobody has to twist your arm to accept something with intrinsic value in payment of debt. Paper currency makes legal tender laws necessary.
I think where I am having problems with this is how intrinsic is defined. There is nothing inherently more valuable about gold than there is dollars at this point. When it was first done, I agree, Legal Tender laws were used to twist the arms. Is that because gold is intrinsically more valuable than the dollar? No, again, nothing has intrinsic value other than those things necessary to survival. The fact that a dollar can buy a certain amount of gold on the world market proves that one is just as valuable as the other. I could use an ounce of gold to buy that 125 gallon tank or a few $100 bills. Intrinsic means related to the essential nature of something. Gold is not intrinsically valuable. Again, it is only worth what someone is willing to give you for it in trade. Here, let's set up another meeting, but let's manipulate the circumstances, okay?

You can have all the gold, silver, platinum and titanium in the world plus the sole ability to mine it, manipulate it and shape it. I'll take all of the food and ability to produce it. Now, we eradicate modern life as we know it; I'll be kind and let you pick the catastrophe of your choice. ;) So, most of the population of Earth is gone. You have all that gold which you claim is inherently valuable. I have more cans of food than you can shake a stick at. What is your gold worth now? $440.50? Maybe. But when you get hungry it's only worth what I am willing to trade you for it. Are you seeing the point? Market value is just that. In order for there to be a value, there has to be a market for it, therefore it is not intrinsically valuable at all.

[Launcher]

Would you exchange my paper dollar for your silver dollar?

[Launcher]

Slipknottin,
We have a big counterfeiting ring. It is called "The Federal Reserve System."

[slipknottin]

Slipknottin,
We have a big counterfeiting ring. It is called "The Federal Reserve System."

:rolleyes:

[Harlock]

Would you exchange my paper dollar for your silver dollar?
I already answered that question. I know market values. I would trade you a silver dollar for the appropriate market value in paper dollars. And, as I said before, this doesn not make silver inherently more valuable. We're going in circles here and you are simply refusing to admit that market value determines the value of precious metals and that they are not in and of themselves valuable. Value is placed on them by the market.

[Launcher]

Why is there a discrepancy between between a paper dollar and a silver dollar? Why an appropriate number of paper dollars?

[slipknottin]

Why is there a discrepancy between between a paper dollar and a silver dollar?

what discrepancy? Gold and silver both vary in value depending on supply and demand, when a large gold mine is uncovered, the value of gold will drop. Why would you want to tie your economic system to the value of a certain good? There is no inherent logic for it.

[Harlock]

Why is there a discrepancy between between a paper dollar and a silver dollar?
Why is there a discrepancy between certain paper star notes of the one dollar denomination and certain silver dollars? Really, you're not arguing a point here. Your basis seems to be to simply ask questions and not answer them, so I'll leave you to it.

[Launcher]

What about a store of value?

[Launcher]

You don't know what a dollar really is.

[slipknottin]

What about a store of value?

Money does not need to be backed by something to be a store of value.

[slipknottin]

You don't know what a dollar really is.

So why not explain it instead of asking question after question?

There is no tie bewteen the value of a dollar, and the value of a pound of gold. Just as there is no tie bewteen the value of a pound of gold and silver.

Why should there be?

[Launcher]

Would you accept tickets to a ball game if there were no ball game?

[slipknottin]

Would you accept tickets to a ball game if there were no ball game?

Would you accept a pound of gold if it was worthless?

The neverending questions are getting quite annoying, especially because they are never accompanied by anything other than more questions. Explanations, theories, concepts, etc. would be nice here.

[Launcher]

Silver has value because of scarcity. The only way to inflate the currency redeemable in silver is to strike the mother lode. This causes it to hold its value over time outside the control of manipulators. It imposes discipline on lenders. It gives savings real value over time. It causes interest to be paid on your behalf, not the banks. It causes prices to fall. It requires banks to assume risk. It gives prosperity to the middle class and to poor people. It gives prosperity to the rich under rules of fair play. The exact opposite is true of paper currency. Which is better in your opinion?

[Launcher]

Any reasonable person would prefer a pound of gold to a pound of paper as a medium of exchange any day.

[slipknottin]

The only way to inflate the currency redeemable in silver is to strike the mother lode.
Which happened quite often back in the heyday of the gold and silver standards.


It causes prices to fall. It gives prosperity to the middle class and to poor people. It gives prosperity to the rich under rules of fair play. The exact opposite is true of paper currency.

Other than those comments I agree.


Which is better in your opinion?

As Ive said, your giving two options when neither is satisfactory.

[OrionGirl]

And this has WHAT to do with the topic?

Sounds like someone begging for a conspiracy theory to me.

One point--gold and silver can be stock piled just as can any item (and indeed, banks round the world do so, as do governments to a lesser degree). A sudden release of these stock piles would cause havoc--resulting in no more stability than the current paper system in place currently, but without the controls in place on the paper system.

[slipknottin]

Any reasonable person would prefer a pound of gold to a pound of paper as a medium of exchange any day.

Really? What if each of those pieces of paper was worth $10000?

[Launcher]

How could that be possible? Trees are a renewable resource, gold and silver are not.

[slipknottin]

How could that be possible? Trees are a renewable resource, gold and silver are not.

How could what be possible? Each piece of paper worth $10,000?

You really are stuck on this "if there is nothing backing your paper its worthless" idea, arent you.

Why would someone in another country accept an american dollar? If your idea was correct, nobody ever would, yet american dollars are the most widely accepted and used currency throughout the world (though its quickly losing pace to the Euro).

[Launcher]

Your question demonstrates that you still don't understand what a "dollar" is.

[slipknottin]

Your question demonstrates that you still don't understand what a "dollar" is.

And your post demonstrates that you cant carry on a debate. Lock.