So much for the "risk-free" nature of Treasuries

[moda0306]

1) If we don't want them, then why does almost every productive economy government provide these same things to their citizens: Roads, healthcare, military, police, sewer, other infrastrcture, etc.  Do you have an example of a productive economy where the government is all-but non-involved in day-to-day economic activity (even if it's just infrastructural)?

I would like to clear up something that really hampers discussions here. The argument is constantly made here that if you can't produce evidence of something it is not true. This is a fallacious argument. It is called the Argument from Ignorance. The principle you guys would do well to learn is that "Absence of evidence is not evidence of absence".

When people say things like..."If that's true then show me where it exists"..they are implying if the other person can't show proof of existance than their argument is incorrect. Logic is never attempted. This is a false argument. It's barely worth pursuing, it's tiresome for the other person, it is a diversion that distracts from the discussion, and nothing ever goes anywhere.

To say "If Government spending is destructive then show me a productive society without government" is not an argument. At least, it's not one that is valid. People can choose to speculate as to why one doesn't exist, but they don't need to provide one to prove Government spending is destructive". Requiring one for proof of existance is an example of a lack of understanding of the principles being discussed.

This happens here all the time. It's like saying "If drunk driving leads to car wrecks how come I drove drunk last night and didn't get into a wreck!?!?  Explain that one!"

I'm done responding to this fallacious argument anymore. It's unpleasant to ignore people's points and insist on the argument from ignorance. My only response will be to point out the fallacious nature of the argument.

Really not trying to be mean guys. You might not be aware to the extent this argument is used here. It's the backbone of many positions and it's false. I'm just hoping that as iron sharpens iron we can sharpen each other's deductive reasoning ability and stop with the false arguments. Lord knows i can use sharpening myself.



http://en.wikipedia.org/wiki/Evidence_of_absence

It's nothing like the drunk driving argument.  There's a ton of observable occurances and cold, hard, scientific data that drunkeness makes driving more dangerous.  Using the "it doesn't apply to me" argument is a ridiculous comparison.... sorry if that sounds harsh.

We literally have a world with like 7 billion people in it, and something like 200 countries or "territories," none of which looks anything like a "free society" (unless you include lawless $hitholes, but lets just agree (for now) not to call them ideal libertarian landscapes), and some of THE MOST productive economies are private activity mixed with a VERY high degree of government control, spending, investment, healthcare, education, fiat currencies, gov't influenced banking, etc.

This would be ok if you were claiming that "while morally correct, it remains to be seen how productive and robust 'free society' economies truly are."

But you're not.

You're actualy claiming they're significantly more robust and productive.   If that were the case, the natural state of the world would give us SOME sneaking evidence of this, because robust things tend to stick around, and production is a pretty obvious trait to identify.

So this would be like you stating that being drunk helps causes car accidents, and I noticed that in some of the most alcoholic places of the world they had unbelievably safe drivers, and that the most sober places in the world were having accidents all over (obviously not true), and pointed this out, and you said, "hogwash, that's not an argument, that's just an observation about the world."

When introduced to this fact, you just go back into generalities about the falseness of the system.

But in the end, if you think anything spurred on by government is just "economic activity," and not real "economic growth," I suppose you think South Korea, Japan, Western Europe, Taiwan, Singapore, Manhattan, (on and on and on) are just statist houses of cards of "economic activity."  Is this what you're stating?  Because these economies (most of them, anyway) have governments that spend money on healthcare, control education and currency, build massive statist-manipulated living areas known as "cities," and supply various infrastructural services, and by all common measures are extremely productive.

But that's not "real" productivity, is it?  It's just "economic activity" spurred on by statist goons and carried about by obedient slaves.

[Xan]

Kshartle,

I think their points are more along the lines of:
* If such a society is truly ideal, why has it never even been tried, let alone successful,
* Does the non-existence of such societies imply an inherent fragility in favor of other societies,
* What's the point of describing a society which can never exist,
* Since it doesn't actually exist, YOU certainly can't positively say how wonderful it is

[moda0306]

US treasury default hopefully hasn't been referred to as "impossible."  I might have used this term in the heat of an argument, so let me be the lightning rod on that.  It shouldn't have EVER been referred to as impossible.

US treasury bonds being nominally risk-free depends on the former statement... this is alwas qualified for "unless they want to."


Why would a default be beneficial?  Who does that benefit?  Savers, who are depending on a stable environment to store money?  Businesses, who depend on relatively stable banking system and economic expectations?

Or gold-bugs hunkered down on their compound who want to see everyone else's savings burn while they ready themselves for the zombie apocalypse?

Moda,

Previously it was not possible to even have a discussion about US default because the topic was so far outside the mainstream that it was, as you say, only something for people in bunkers talking about the apocalypse.  To find an example of this, look at any past thread on US bankruptcy/default on this forum. 

I use the term "impossible" because previously any mention of the words "US Default" was met with "The US will never default because it can print its debt away, etc." aka it is basically impossible as it would never happen.  Well, nobody can make that argument any longer can they?  Not when a default is 8 days away unless something changes...

It went from impossible to the plan of record in less than 1 month.  Interesting, the power of memes.

As for whether the default is beneficial, I'm not saying it is, just pointing out the major memes circulating now. 

You guys should know by now, it is not the details of a meme that matter, only that the meme is believable enough for both sides to construct a semi-plausible argument that enables the group to be divided into two camps, and the meme to prosper. 

What's scary is that's exactly what happened with Cyprus, and it seems to be what is happening today with the government shutdown...

What's important is the CAUSE of default.  The reason any discussion of default rang on a counter-analysis is because these were the reasons:

- Debt-to-GDP ratio
- Debt "crisis"
- Interest payment "crisis"
- Hockey stick graph

Etc, etc.

Anytime a discussion of default was in the context of the debt ceiling, these were some of the reasonable responses:

- Nobody gains, and the government agents don't like to upset markets.

- There's a platinum coin option.

- The fed can directly fund the treasury

- The government could prioritize payments

- Technically, it is possible that the government would choose default, but it really is so damaging and has so little benefit to savers, borrowers, business owners, politicians, fed chairman, president, congress, etc. that it's almost impossible to imagine them allowing it.



Really, let's not pretend that the usual "insolvency" arguments have been about this ridiculous debt ceiling (and when they have been, MR'ists discuss things on a very different plane).  They've been about the public memes on the nature of our natural debt, government spending, "distortion" of interest rates and a future "correction," etc.  The MR'ist meme might seem popular in this thread, but I tell you it's about as popular as Harry Browne amongst people I talk to in public (almost universally zero knowledge of how the fed/treasury work and of Harry Browne's work).

The banking system and markets, overall, act like they understand the role of treasuries and the likelihood of inflation... however, the common "memes" amongst most public conversations on our national debt, including that of the financial media, are that of a debt-crisis, not driving by an artificial "ceiling," but driven by market fundamentals.

[moda0306]

Kshartle,

I think their points are more along the lines of:
* If such a society is truly ideal, why has it never even been tried, let alone successful,
* Does the non-existence of such societies imply an inherent fragility in favor of other societies,
* What's the point of describing a society which can never exist,
* Since it doesn't actually exist, YOU certainly can't positively say how wonderful it is

* we are "hopefully" evolving toward such a society, it has been tried to what ever level the people involved could envision, but on one side the supposed failure being "government grows" is used to disprove its viability, the other side of that is "government grows" is the reason we need to evolve toward such a society...
* power corrupts, its inherently fragility doesn't disprove its superiority it tends to prove that power corrupts.
* whats the point of describing a perfect government run society that can never exist? if we have to pick a direction to move towards, i would pick liberty over government dependance and the suffering that seems to inevitably lead to any day.
* those elements of it that do exist or have existed, have many positive benefits,

we have a mixed society and that is not inherently bad, but the fact that the mix (because corruption and low information participants) favors pushing the balance toward tyranny, it takes constant effort and vigilance to push back..

Xan,

We usually disagree, so I appreciate you laying that out like that.  I'd also ask, if it's so inherantly fragile, but attempts to add state activity are "artificial," then how do we reconcile the two?  Is it really "unnatural" to exert SOME sort of force to keep things from falling apart (especially if we know force will end up coming into exert itself anyway)?

You can say something is immoral, and we can debate about that until we question the meaning of life itself, but to say it is "robust" (or imply that) needs to be backed up by some more hard evidence.  To say something is "productive" requires the same.

[Kshartle]

1) If we don't want them, then why does almost every productive economy government provide these same things to their citizens: Roads, healthcare, military, police, sewer, other infrastrcture, etc.  Do you have an example of a productive economy where the government is all-but non-involved in day-to-day economic activity (even if it's just infrastructural)?

I would like to clear up something that really hampers discussions here. The argument is constantly made here that if you can't produce evidence of something it is not true. This is a fallacious argument. It is called the Argument from Ignorance. The principle you guys would do well to learn is that "Absence of evidence is not evidence of absence".

When people say things like..."If that's true then show me where it exists"..they are implying if the other person can't show proof of existance than their argument is incorrect. Logic is never attempted. This is a false argument. It's barely worth pursuing, it's tiresome for the other person, it is a diversion that distracts from the discussion, and nothing ever goes anywhere.

To say "If Government spending is destructive then show me a productive society without government" is not an argument. At least, it's not one that is valid. People can choose to speculate as to why one doesn't exist, but they don't need to provide one to prove Government spending is destructive". Requiring one for proof of existance is an example of a lack of understanding of the principles being discussed.

This happens here all the time. It's like saying "If drunk driving leads to car wrecks how come I drove drunk last night and didn't get into a wreck!?!?  Explain that one!"

I'm done responding to this fallacious argument anymore. It's unpleasant to ignore people's points and insist on the argument from ignorance. My only response will be to point out the fallacious nature of the argument.

Really not trying to be mean guys. You might not be aware to the extent this argument is used here. It's the backbone of many positions and it's false. I'm just hoping that as iron sharpens iron we can sharpen each other's deductive reasoning ability and stop with the false arguments. Lord knows i can use sharpening myself.



http://en.wikipedia.org/wiki/Evidence_of_absence

It's nothing like the drunk driving argument.  There's a ton of observable occurances and cold, hard, scientific data that drunkeness makes driving more dangerous.  Using the "it doesn't apply to me" argument is a ridiculous comparison.... sorry if that sounds harsh.

The evidence of drunk drivers getting into acciendents is not required to evidence that driving drunk leads to accidents.

If no one had ever gotten into an accident with alcohol in their bloodstream, would you believe that alcohol increases the likelihood of an accident?

[systemskeptic]

- Technically, it is possible that the government would choose default, but it really is so damaging and has so little benefit to savers, borrowers, business owners, politicians, fed chairman, president, congress, etc. that it's almost impossible to imagine them allowing it.
[...]
The banking system and markets, overall, act like they understand the role of treasuries and the likelihood of inflation... however, the common "memes" amongst most public conversations on our national debt, including that of the financial media, are that of a debt-crisis, not driving by an artificial "ceiling," but driven by market fundamentals.

Almost impossible to imagine, yet here we are 1 week away.  That's kind of my point, by now I hope the impossible is becoming easier for some to imagine?  Maybe it's not just my point, but the point of those that seed the teleprompters at CNN?  Not committing to this idea, just floating it as a possibility.

To your 2nd point, what if "market fundamentals" is less a fundamental truth, and more a  collectively understanding of market fundamentals [a meme]?  Hold that point in mind, and combine it with the fact that even the most established memes can turn on a dime -- from impossible to reality in months or weeks.

For instance, the meme that Treasuries are a risk-free asset, and a flight to safety.  It worked for the last debt ceiling standoff, so it must be true today, right?

[moda0306]

I would like to clear up something that really hampers discussions here. The argument is constantly made here that if you can't produce evidence of something it is not true. This is a fallacious argument. It is called the Argument from Ignorance. The principle you guys would do well to learn is that "Absence of evidence is not evidence of absence".

When people say things like..."If that's true then show me where it exists"..they are implying if the other person can't show proof of existance than their argument is incorrect. Logic is never attempted. This is a false argument. It's barely worth pursuing, it's tiresome for the other person, it is a diversion that distracts from the discussion, and nothing ever goes anywhere.

To say "If Government spending is destructive then show me a productive society without government" is not an argument. At least, it's not one that is valid. People can choose to speculate as to why one doesn't exist, but they don't need to provide one to prove Government spending is destructive". Requiring one for proof of existance is an example of a lack of understanding of the principles being discussed.

This happens here all the time. It's like saying "If drunk driving leads to car wrecks how come I drove drunk last night and didn't get into a wreck!?!?  Explain that one!"

I'm done responding to this fallacious argument anymore. It's unpleasant to ignore people's points and insist on the argument from ignorance. My only response will be to point out the fallacious nature of the argument.

Really not trying to be mean guys. You might not be aware to the extent this argument is used here. It's the backbone of many positions and it's false. I'm just hoping that as iron sharpens iron we can sharpen each other's deductive reasoning ability and stop with the false arguments. Lord knows i can use sharpening myself.



http://en.wikipedia.org/wiki/Evidence_of_absence

It's nothing like the drunk driving argument.  There's a ton of observable occurances and cold, hard, scientific data that drunkeness makes driving more dangerous.  Using the "it doesn't apply to me" argument is a ridiculous comparison.... sorry if that sounds harsh.

The evidence of drunk drivers getting into acciendents is not required to evidence that driving drunk leads to accidents.

If no one had ever gotten into an accident with alcohol in their bloodstream, would you believe that alcohol increases the likelihood of an accident?

Kshartle,

No, I would deem that any substance like that would impair my driving (though I'd probably be fooling myself as to how much).


However, it certainly helps to have evidence for less obvious questions, such as:

- Does the existence of an organized forceful entity that provides certain services and roles in an economy (including defense, infrastructure, healthcare, education, police, courts, and money) make that economy more or less robust and productive?


Doesn't that seem like a little bit tougher question than:

- Will a controlled substance that makes ugly women pretty likely impair my driving a 3,000 lb vehicle?

[Kshartle]

This would be ok if you were claiming that "while morally correct, it remains to be seen how productive and robust 'free society' economies truly are."

But you're not.

You're actualy claiming they're significantly more robust and productive.   If that were the case, the natural state of the world would give us SOME sneaking evidence of this, because robust things tend to stick around, and production is a pretty obvious trait to identify.

You're claiming that the lack of evidence of a more productive society that is free from government means it is not true. That's what it means when you say "If that were the case". You are saying, "If it's true that XYZ than where is the evidence?" This is a diversion. The reasons can be explored, but they are not a refution to a claim or to logic.

It is a fallacious argument, through and through and it doesn't prove anything. People will then trust the validity of an argument that is false. Asking the question is fine, but it's another question about something else (why doesn't a free and productive society exist). It's not an argument against the claim or against the logic of a more productive non-governmental society.

Sorry man. Not trying to give anyone a hard time. We just get to this point so often and many many people on the forum get hung up on this type of argument like it's proof of something. Then discussion and discovery end and it just sucks (to me at least) 

Really not trying to offend. Just hoping we can all do better and learn together.

+1 for supporting good logic..... it really does make rational/critical thought and reasonable debate possible...

[moda0306]

- Technically, it is possible that the government would choose default, but it really is so damaging and has so little benefit to savers, borrowers, business owners, politicians, fed chairman, president, congress, etc. that it's almost impossible to imagine them allowing it.
[...]
The banking system and markets, overall, act like they understand the role of treasuries and the likelihood of inflation... however, the common "memes" amongst most public conversations on our national debt, including that of the financial media, are that of a debt-crisis, not driving by an artificial "ceiling," but driven by market fundamentals.

Almost impossible to imagine, yet here we are 1 week away.  That's kind of my point, by now I hope the impossible is becoming easier for some to imagine?  Maybe it's not just my point, but the point of those that seed the teleprompters at CNN?  Not committing to this idea, just floating it as a possibility.

To your 2nd point, what if "market fundamentals" is less a fundamental truth, and more a  collectively understanding of market fundamentals [a meme]?  Hold that point in mind, and combine it with the fact that even the most established memes can turn on a dime -- from impossible to reality in months or weeks.

For instance, the meme that Treasuries are a risk-free asset, and a flight to safety.  It worked for the last debt ceiling standoff, so it must be true today, right?

systemskeptic,

We were less than 1 week away, I believe, one of the last times with the debt-ceiling.  These games get pushed up to a pretty tight boundary.

Treasuries being a risk-less asset isn't a fundamental truth of the market... things like Debt/GDP ratios being inherantly damaging, or that government spending is inherantly counter-productive, or that rates are grossly artificially negative, or that we're "living beyond our means" are fundamental truths of human behavior and our economic balance.

Treasuries being nominally risk-free is an operational truth, or more precisely, operational likelihood, but of course, only as likely as the government CHOOSES to make it.

The usual meme is that the government will LOSE control to fundamental economic truths in the market that reject what it's doing with the money supply and economic growth and interest rates.  THAT is the one we're trying to rail against as MR'ists. 

Keep in mind, going into MR, for me, was because I didn't trust HB that "short term bonds were cash."  I saw .2% interest rates and figured "why not just hold cash," or "why not an FDIC-insured account," and wanted to learn more about his assertion.  I've said for a while now that it makes sense in this environment to hold a lot of "mattress cash."

This discussion and your concerns are valid.  However, I'm still wondering why the only legal option that I can tell (platinum coin) is being shunned when it's obvious that the only thing it's necessary for is to get around an artificial debt ceiling, not a market that's about to collapse in the face of more spending.

[Kshartle]

Kshartle,

I think their points are more along the lines of:
* If such a society is truly ideal, why has it never even been tried, let alone successful,
* Does the non-existence of such societies imply an inherent fragility in favor of other societies,
* What's the point of describing a society which can never exist,
* Since it doesn't actually exist, YOU certainly can't positively say how wonderful it is

1. Almost all humans still embrace violence as a solution to disputes. It is still considered valid. We are taught this at a young age by our parents and other adults and grow up believing it. We always have been. I believe the trend is towards rejection of violence. Even just 150+ years ago humans were owned outright here. Now to suggest that would be absolutely insane. At some pont so will hitting children and using aggressive violence to solve your problems (I hope).

2. Absolutely not. If the society that's free of institutional violence is superior then after it's established we won't regress. Imagine arguing for a return of outright slavery, segregation, arranged marriage, human sacrifice etc.......

3. Why do you think it can't exist? Can you provide an argument why humans can't have a society that rejects the aggressive use of force or violence to resolve disputes?

4. Of course I can. Google the "argument from ignorance". It's a false argument and you're making it with that statement. It's like people in the year 1300 claiming the world is flat and you will fall off the edge if you try to sail around it. "Since no one has sailed around it you can't say positively that it's round. The principles of gravity and pyhsics and everything else don't apply." The only thing that proves the Earth is not flat is that we've sailed around it. (This is the most popular argument on this forum, by far)

[Kshartle]

However, it certainly helps to have evidence for less obvious questions, such as:

- Does the existence of an organized forceful entity that provides certain services and roles in an economy (including defense, infrastructure, healthcare, education, police, courts, and money) make that economy more or less robust and productive?


Doesn't that seem like a little bit tougher question than:

- Will a controlled substance that makes ugly women pretty likely impair my driving a 3,000 lb vehicle?

It is more difficult. I don't want to re-write everything i've written here on the subject. Maybe I'll dig up the old posts, they are a little bit lengthy.

[moda0306]

What I'm saying is not an exhibit of that logical fallacy, just an appeal for some evidence to your assertion in modern society. The problem is YOU have no evidence that a mixed economy is more fragile and less productive than a "free society."

I am not appealing to ignorance.  I'm stating that the mere existence of a lot of something is reasonable evidence of its robustness. Non existence of something is reasonable evidence that it's not robust for whatever reason. I think I know the reason, but that's another debate and this obviously all can't be proven to perfection. All we can do is use observations about society to help illustrate points.

You're also conveniently ignoring completely any thoughtful analysis on the seemingly-robust nature of cities and countries worldwide that have very mixed economies that obviously implement lots of state-lead investment and infrastructure, and how they're actually MORE productive per capita than areas with less statist infrastructure.

Logical arguments are great.  I love making assertions based on it. However, when we're combining morality and human nature, eventually you have to just take a look around and make sure people's choices and activities align with your thoughts on human nature that are hopefully based in sound logic.

We can't just ignore observations around us to test what would seem like air-tight logic.  Because we're trying to decide how society will behave given a certain set of environmental stimuli.  To logically parse through this, you have to successfully interpret human motivations, which are inherantly illogical, and sometimes immoral.

[Kshartle]

I am not appealing to ignorance.  Non existence of something is reasonable evidence that it's not robust for whatever reason. I think I know the reason, but that's another debate and this obviously all can't be proven to perfection.

Absence of evidence is not evidence of absence.

If you know the reasons, or think you know them, then state them. That's not another debate. It is the debate.

The lack of evidence is another discussion/debate.

Assume it's 1300 AD. If I said the world is round and I attempt to prove it with logic, you do not refute it by saying "then why has no one every sailed around it." We can debate as to why no one has sailed around, but it's not not not evidence that the world is flat and not round.

If this point is not understood we'll never get anywhere. This is why we seldom get anywhere and why people's opinon on these things seldom change. That and ego. People provide reasoned arguments for their beliefs and the beliefs are shot down for lack of evidence. It's constant. It's not a valid argument it's a diversion to another topic (why is there lack of evidence).

[moda0306]

Kshartle,

Obviously, it's beginning to appear that we have two different perspectives on too many things:

1) Morality

You think an individual can morally lay claim on natural resources.  I think it's inherantly forceful but economically necessary.

2) Human nature

You think certain stimuli will effect humans a certain way. I think it will effect them a different way.

3) Productivity

You measure productivity one way. I measure it another way.

4) Natural state

You have a very different idea of whether something is a natural phenomenon or not, and therefore makes it difficult to debate what is "artificial."

5) Other Complicating factors

- Inflation is abiguous
- "Money" is ambiguous
- "Debt" is ambiguous in its effects as it nets to zero value but has huge effects on the economy
- What constitutes "choice" appears to be in disagreement, especially with me and Libertarian666
- Macroeconomics is counter-intuitive against an understanding of microeconomics


I just don't know that I can continually enjoy these debates.  There's too many co-dependent variables in our arguments, and if we can barely agree on any premises (I think we both got to a point where we agreed that people own themselves.  Beyond that, it's been a struggle).

I give some societal evidence to our claims, and you say it's bad logic (though my point isn't to present logic, but to test our two logical frameworks against societal observations).

Maybe I need to whisper something to Pointed Stick, and he whispers it to you, and vice versa, until we can hash this out like 16 year old girls .

[systemskeptic]

We were less than 1 week away, I believe, one of the last times with the debt-ceiling.  These games get pushed up to a pretty tight boundary.

They've played this game many times before, but this time the Default meme is pretty heavy -- talking about the calendar of payments, how bad or not it would be, etc.  I don't recall the possibility of Default really being brought up (at all?) by the mainstream news in past shutdowns.

Or is my recollection of history hazy?

[moda0306]

I am not appealing to ignorance.  Non existence of something is reasonable evidence that it's not robust for whatever reason. I think I know the reason, but that's another debate and this obviously all can't be proven to perfection.

Absence of evidence is not evidence of absence.

If you know the reasons, or think you know them, then state them. That's not another debate. It is the debate.

The lack of evidence is another discussion/debate.

Assume it's 1300 AD. If I said the world is round and I attempt to prove it with logic, you do not refute it by saying "then why has no one every sailed around it." We can debate as to why no one has sailed around, but it's not not not evidence that the world is flat and not round.

If this point is not understood we'll never get anywhere. This is why we seldom get anywhere and why people's opinon on these things seldom change. That and ego. People provide reasoned arguments for their beliefs and the beliefs are shot down for lack of evidence. It's constant. It's not a valid argument it's a diversion to another topic (why is there lack of evidence).

To end my participation in this, I think free societies are not robust or productive because 1) They are left relatively defenseless to larger more orgnized forms of force from the outside (or inside), 2) not enough productive people truly demand them.

The reason for #2 is that 1) there's a lack of organization without some form of state, 2) contracts are tougher to enforce, and 3) the freedom gained, even if it could be enjoyed for a while before we were exploited by an outside force, is just not all that great to offset the benefits of some societal governance and public infrastructure (to enough productive people).

I'm done though.  For a while at least.

[Kshartle]

Maybe I need to whisper something to Pointed Stick, and he whispers it to you, and vice versa, until we can hash this out like 16 year old girls .

The electronic passing of notes isn't working. 

No I don't think we need to do that. We just need to find a way to stay on a topic long enough to examine the argument and find the flaws. My point is looking for evidence, while nice when it's there, derails the discussion when it's not there. It's not evidence that an argument is flawed, but derails it nontheless and changes the topic. Hence, never getting anywhere. That's why I wanted to see we if could set aside the lack of evidence argument, if even just temporarily when discussing some things.

Really not doing it to be a jerk, just hoping for a more fruitful discussion.

[Kshartle]

So this would be like you stating that being drunk helps causes car accidents, and I noticed that in some of the most alcoholic places of the world they had unbelievably safe drivers, and that the most sober places in the world were having accidents all over (obviously not true), and pointed this out, and you said, "hogwash, that's not an argument, that's just an observation about the world."

When introduced to this fact, you just go back into generalities about the falseness of the system.

That would be just an observation and not an argument. It's called "failure to state". You're not stating an actual argument, just stating an observation. You're not saying that I'm incorrect based on any understanding of effects of alcohol and the impact on driving. There is no logic or reason because there is no argument, just an observation. It's fine to make the observation, but it's a diversion from the topic and now we will start to discuss the validity and circumstances of your observation, and we will stop discussing the effects of alcohol on drivers. It's ok, but since this happens to virtually every discussion on these topics we never get anwhere.

For instance.....when someone attempts to explain how inflation causes upward pressure on rates...Japan is trotted out. Every time. Now we need to start going into Japan and all the differences and everything surrounding this event. Can't count how many times I've read "Don't the low interest rates in Japan PROVE you are wrong about expansive money policies encouraging rising rates?" The answer is no, it doesn't . No attempt to look at the logic of the original argument.

The observations that people make are done with the express purpose of providing evidence of the invalidity of other people's arguments. They are false arguments though. It would be nice to stop having them derail discussions.

That would be an accurate statement that you attributed to me hypothetically though. 

[Kshartle]

But in the end, if you think anything spurred on by government is just "economic activity," and not real "economic growth," I suppose you think South Korea, Japan, Western Europe, Taiwan, Singapore, Manhattan, (on and on and on) are just statist houses of cards of "economic activity."  Is this what you're stating?  Because these economies (most of them, anyway) have governments that spend money on healthcare, control education and currency, build massive statist-manipulated living areas known as "cities," and supply various infrastructural services, and by all common measures are extremely productive.

But that's not "real" productivity, is it?  It's just "economic activity" spurred on by statist goons and carried about by obedient slaves.

This is a combo of a straw man "productive areas that have lots of government are just statist houses of cards" (haven't ever said that) & and claiming correlation implies causation (places that are productive have lots of government, therefore lots of government means you will have a lot of productivity).

This is why logic and reason trump evidence. It's entirely possible that when people are very productive, they attract parasites who try to gain control of the society by promising to redistribute the wealth to the ones who don't have it. Maybe because people are so wealthy because of their high productivity they don't resist the theft of government as much because they're so well off.

The thing is if person A lays a case for why government hurts productivity, and person B trots this "evidence" out to refute it, their false argument derails the discussion every single time while they smile smuggly at their debate victory or whatever. Who wants to constantly respond to this evidence....it turns into a situation where person A has to explain everything in the entire universe. It's endless. It's sometimes reffered to as argument by question or Moving The Goalposts (Raising The Bar, Argument By Demanding Impossible Perfection) The point is if A successfully addresses some point, then he must also address some further point. If B can make these points more and more difficult (or diverse) then eventually A must fail. If nothing else, B will eventually find a subject that A isn't up on

[dragoncar]

Hey guys, I just got back from lunch.  Whud I miss?

[moda0306]

Kshartle,

I know you're not trying to be a jerk. It's just very difficult to argue with you, and I don't think it's because I'm not making good points, or using shaky logic.  If the discussion on the nature of property rights is any indication, we've got a huge up-hill battle.

In that conversation, it took 10 pages for me to not even agree, but simply understand, in your opinion, how somebody asserts a valid, unforceful claim on property.

It's like you couldn't even fathom there ever being anything like a land dispute, even though we have the entire occupation and settlement of the United States to give us a very real example of the ambiguity of land ownership.  It didn't even register, after 10 pages of questions and counterpoints, that land/resources are anything but an extension of our sovereign bodies, and not just that, but seem to have a very simple system (that I still don't think I fully understand) of whose bodies the sovereign connection is to.

So if I can't understand your logic (much less agree with it) on what a valid claim on property must consist of, or whether it's even a natural extension of our individual sovereignty in the first place, I don't know if any argument about what is "artificial" and what is "forceful" can ever get anywhere, because we're not going to agree as to whether your alternative (free society) is either artificial or forceful.

But it seems I'm being challenged on logic, which is rich, because I'm a painfully logical person, so I'll participate in this back-and-forth until I can't, because after your circular logic on property, I don't know if I can take another one of those 10-page doozies.

[Xan]

But here's the thing: economies are chaotic systems with trillions of variables.  And these variables don't represent robots or numbers, they're people, with their own psychologies, rationalities, irrationalities, randomness, and unpredictability.

A system of this kind of complexity can't really be simulated.  It's like the idea that the only accurate simulation of the universe would be the size and complexity, and take as long to run, as the universe itself.

So basing conclusions on actual observations, I think, isn't ignoring logic.  It's just recognizing its limitation.  If I had a brain the size of a planet, maybe it would make sense to look at A and B and draw a conclusion about the behavior of 7 billion people.  But I don't.

Isn't the real world is what's important?  I mean, if logic and the real world disagree, then it's the logic that's wrong.  Surely that's an axiom.

[moda0306]

So this would be like you stating that being drunk helps causes car accidents, and I noticed that in some of the most alcoholic places of the world they had unbelievably safe drivers, and that the most sober places in the world were having accidents all over (obviously not true), and pointed this out, and you said, "hogwash, that's not an argument, that's just an observation about the world."

When introduced to this fact, you just go back into generalities about the falseness of the system.

That would be just an observation and not an argument. It's called "failure to state". You're not stating an actual argument, just stating an observation. You're not saying that I'm incorrect based on any understanding of effects of alcohol and the impact on driving. There is no logic or reason because there is no argument, just an observation. It's fine to make the observation, but it's a diversion from the topic and now we will start to discuss the validity and circumstances of your observation, and we will stop discussing the effects of alcohol on drivers. It's ok, but since this happens to virtually every discussion on these topics we never get anwhere.

For instance.....when someone attempts to explain how inflation causes upward pressure on rates...Japan is trotted out. Every time. Now we need to start going into Japan and all the differences and everything surrounding this event. Can't count how many times I've read "Don't the low interest rates in Japan PROVE you are wrong about expansive money policies encouraging rising rates?" The answer is no, it doesn't . No attempt to look at the logic of the original argument.

The observations that people make are done with the express purpose of providing evidence of the invalidity of other people's arguments. They are false arguments though. It would be nice to stop having them derail discussions.

That would be an accurate statement that you attributed to me hypothetically though. 

Dude.... observations help us test our logic.

It adds to the debate... I'm not saying it's proof, I'm just asking "What's your take on this?" in maybe a more pointed way? 

I HAVE made arguments stating why "free societies" are inherantly fragile, undesirable (for many), and not productive (probably due to them being fragile and undesireable). 

But making observations lends perspectives to all of this.  We can't live in a logical vacuum.  Especially if we're talking about societal trends and human nature.

We're talking about the nature of societies here, man.  It's hard to keep conversations of math and science.  We're talking about morality, human nature, social tendencies, human motivation.  You CAN'T exist only in logic here.  We have to bounce between logic, moral philosophy (optional), and real life examples and analysis.  The mix isn't a "diversion," it's bloody frigging necessary!

[moda0306]

Xan,

I'm about to e-hug you.  You're saving me here.  Thanks... though I'm sure you don't want/need it .

[systemskeptic]

I don't understand how the debate turned into one about economics / philosophy / logic because while those things are fun to argue about, rarely do they have a real world implication in subjects such as these...

The current government shutdown / impending default / increased treasury risk is not being driven by logic or economic truth it's being driven by a handful of humans with emotions including pride, power, knowledge (lack of knowledge), intention, greed, etc.  Humans, who like us, have thoughts and emotions that are largely influenced by memes, whether they realize it or not.

So as the OP's title states, treasuries can no longer be popularly labeled as risk free - now what?