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Old 02-07-2017, 10:24 AM
 
18,487 posts, read 15,447,872 times
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Quote:
Originally Posted by MrRational View Post
Only if (when) the President and Congress don't insist on some specific means to pay for them.
The most common of those means being the (ta dah!) War Bond.

Which of course is the real source of the problems we face today...
an unwillingness to identify debt being for purpose X apart from purpose Y.

SOME of the debt is both useful and largely inevitable.
But not all of it by any means... especially debt required to carry that debt.

This isn't new information to you... is it?
IN PRINCIPLE, yes the budget can stay balanced during a war.

IN PRACTICE, it usually doesn't.
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Old 02-07-2017, 10:51 AM
 
Location: The Triad
34,090 posts, read 82,517,928 times
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Quote:
Originally Posted by ncole1 View Post
IN PRINCIPLE, yes the budget can stay balanced during a war.
IN PRACTICE, it usually doesn't.
Of course it doesn't.

The issue is not about the budget being balanced.
The issue is about
1) the LEVEL of debt however that is measured or referenced and ,
2) WHAT the debt is being used for.

As regard starting wars specifically...
not doing so without a concomitant increase in taxation.
Which would require a lot more agreement on policy than was the case.
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Old 02-07-2017, 01:32 PM
 
10,513 posts, read 5,116,418 times
Reputation: 14056
Debt is good, not bad. All of the wealth, prosperity, jobs, homes -- everything -- revolves around debt. The paper dollars in your wallet is debt. The dollars in your bank account don't exist, they are just digits in a computer, more debt (the bank is making a promise to pay you paper dollars on demand). How does the supermarket line the shelves with goods? with a commercial line of credit. More debt.

People mistakenly believe that a high public debt is bad for the same reason that owing too much on your Visa card is bad. With public debt we can create more debt, issue more bonds, etc., to keep rolling it over forever. The only time public debt is a problem is if other countries think you have too much and they decide they'd rather base trading on Yen or Euros instead of the dollar. That's the risk, but given the state of affairs today, there is no currency ready to challenge the dollar as the No. 1 currency.
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Old 02-08-2017, 08:01 AM
 
4,224 posts, read 2,987,343 times
Reputation: 3812
The Euro was positioned to function as a USD-Junior in international trade, but first a lack of care in setting up facilities to assist Euro-users in confronting imbalances, and second, a foolish embrace of mindless "austerity" in the wake of the Great Recession has rendered the currency questionable at best in consideration for such a role.
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Old 02-08-2017, 09:27 AM
 
Location: Formerly New England now Texas!
1,708 posts, read 1,088,998 times
Reputation: 1561
Quote:
Originally Posted by Pub-911 View Post
The Fed cannot buy Treasury securities directly from the Treasury -- only from banks in secondary markets. This is what the Federal Open Market Committee is all about. FOMC operations are garden-variety monetary policy.
It's a shell game, banks buy Treasury Notes knowing the Federal Reserve will buy them back. In early 2009, BOP (Before the Obama Period) the Federal Reserve held about 426 billion dollars in Treasury notes. In 2015 the treasury owned 2.460 Trillion dollars, and increase of over 2 trillion dollars.

THIS is why Treasury notes are purchased, the Federal Reserve buys them. https://fred.stlouisfed.org/series/TREAST

Look also at Reserve Purchase agreements, which peaked at over 600 billion dollars during the Obama period, and have declined since Trump took office. https://fred.stlouisfed.org/series/R...ign=categories

It's a financial shell game. More detail about it here - http://www.shadowstats.com/article/n...year-ahead.pdf

From the above -
Quote:
Monetary malfeasance by the Federal Reserve, as seen in central bank efforts to provide
liquidity to a troubled banking system, and also to the U.S. Treasury. Despite the end of the
Federal Reserve’s formal asset purchases, the U.S. central bank monetized 78% of the U.S.
Treasury’s fiscal-2014 cash-based deficit (see Commentary No. 672).
78% of Treasury debt being purchased in 2014 by the Federal Reserve, indicates where the unlimited demand is coming from.
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Old 02-08-2017, 10:04 AM
 
18,740 posts, read 8,354,532 times
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Quote:
Originally Posted by functionofx View Post
It's a shell game, banks buy Treasury Notes knowing the Federal Reserve will buy them back. In early 2009, BOP (Before the Obama Period) the Federal Reserve held about 426 billion dollars in Treasury notes. In 2015 the treasury owned 2.460 Trillion dollars, and increase of over 2 trillion dollars.

THIS is why Treasury notes are purchased, the Federal Reserve buys them. https://fred.stlouisfed.org/series/TREAST

Look also at Reserve Purchase agreements, which peaked at over 600 billion dollars during the Obama period, and have declined since Trump took office. https://fred.stlouisfed.org/series/R...ign=categories

It's a financial shell game. More detail about it here - http://www.shadowstats.com/article/n...year-ahead.pdf

From the above -

78% of Treasury debt being purchased in 2014 by the Federal Reserve, indicates where the unlimited demand is coming from.
QE is not common or permanent policy with the Fed. In fact moving forward we are bound to see more unwinding.
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Old 02-09-2017, 08:31 AM
 
4,224 posts, read 2,987,343 times
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Quote:
Originally Posted by functionofx View Post
It's a shell game...
No, it's actually just garden-variety monetary policy.
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Old 02-19-2017, 05:56 PM
 
1,870 posts, read 1,890,063 times
Reputation: 1384
Quote:
Originally Posted by Pub-911 View Post
It's a double-entry system. A $10 bill in circulation is an asset to the holder and a liability to the issuer. There's not a lot of ways around that.
The issuer of the Sawbuck, the US government, doesn't owe anything. Wealth was produced out of thin air and was issued to a bank.

This isn't a gold/silver standard, the paper money doesn't represent convertible gold. The issuer merely
produced a good that has a live of its own. --- no body owes anything - it's NOT a liability.
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Old 02-19-2017, 06:05 PM
 
Location: Land of Free Johnson-Weld-2016
6,470 posts, read 16,330,463 times
Reputation: 6518
FoxNews.com - Breaking News | Latest News | Current News

Basically the US owes itself money in some cases, as the govt. buys treasuries. AKA lends itself money. This seems complicated. It is also hard to understand how that is either good or sustainable.
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Old 02-19-2017, 06:56 PM
 
18,740 posts, read 8,354,532 times
Reputation: 4117
This is true.

So take off about $1.5T off our national debt.

https://www.federalreserve.gov/faqs/currency_12773.htm

Then take off the $2.5T held at the Fed, since they sweep the interest back to the Treasury.

https://fred.stlouisfed.org/series/TREAST

Then take off all the debt owned by various gov't agencies.

And eventually we're left with:

http://ticdata.treasury.gov/Publish/mfh.txt

And a very large meh IMO.
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