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Old 08-18-2017, 11:07 AM
 
4,229 posts, read 1,911,784 times
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Quote:
Originally Posted by Bronn View Post
Suppose the US government paid off all debt, where would people put their investment grade bond money?
It's not just people. The international financial system is based on there being plentiful stocks of US debt. When Bill Clinton ran budget surpluses in FY1998-2001, not only were the usual issues of new debt based on budget deficits curtailed, but stocks of already existing debt were being bought down. The Bond Marketing Association had to send emissaries to the White House explaining the market dislocations that these product shortages were causing. As the result, a series of reverse auctions was set up to make buy-backs more orderly and transparent.

Quote:
Originally Posted by Bronn View Post
We had a balanced budget going into fiscal 2000, but something came up.
What came up was George W Bush. He couldn't quite wipe out the inherited surplus in FY2001, but he sure did put the budgetary kibosh on everything that came thereafter. A fiscal disaster of the first order.
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Old 08-19-2017, 12:42 AM
 
746 posts, read 405,612 times
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Quote:
Originally Posted by bbnetworking View Post
Govt can print money, to pay off the debt. The concern, they will be diluting all the Assets. As long as everyone has faith and trust in US govt, we should do fine.

China has 250% of national GPD in debt, we only have 80%.
This fiction, this lie supported by those Con-Men who call themselves "Economists" that Government can print money to pay off debt indefinitely is going to cost us all.
The last 16 years are defying history, largely because of the FED. Now the question is: did the FED FIX the system? Or did they delay the necessary? If they only delayed it, then we have problems ahead. One of the things we needed to do during this past No Growth Cycle (2001-Present) is carve our DEBT DOWN. We did not do this. In 2001 we had TOTAL DEBT TO GDP of about 300%. Today we have about 371%. In 1932 we had 280% TOTAL DEBT TO GDP and it took us about 15+years and a World War and a Gret Depression to get us back to GROUND ZERO, about 150%. IF 150% total debt to GDP is really GROUND ZERO, then we have 220% to eliminate.

If debt really DOES NOT MATTER, as our leaders and some Con-Men Economists tell us, then ignore what I say. If debt does matter, then ignore what our leaders and Con-Men Economists are saying.
In my mind DEBT is the biggest crisis we fact as a world; Lunatic Islam is second; and Global Warming is way down the road, about tenth.

If we had survived a Great Depression from 2001-PRESENT, lowered our debt, reinforced our currency, lowered prices of everything, then we would be ready for REAL ORGANIC ECONOMIC GROWTH now, today. Instead of destroying debt, we chose to protect it with lower interest rates, and simulate of fake economic growth with debt. We haven't fixed our economy, we haven't avoided anything, we just delayed Great Depression.

Remember, real economic growth can't happen again unless we allow Deflation and Depression to do its job first and take us thru Dark Forest where we all will meet our God again and learn the hard way that DEBT DOES MATTER!!!!!

This period from 2001-PRESENT will be remembered as a Greatest Theft of Public Money that the World has ever seen. Period where Con-Men, Shysters and Thieves were flourishing, where these people together with Debtors (who are typically Losers during normal times) became so called winners.
Complete madness and insanity!!!!
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Old 08-22-2017, 02:31 AM
 
62 posts, read 20,653 times
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Quote:
Originally Posted by Pub-911 View Post
It's not just people. The international financial system is based on there being plentiful stocks of US debt. When Bill Clinton ran budget surpluses in FY1998-2001, not only were the usual issues of new debt based on budget deficits curtailed, but stocks of already existing debt were being bought down. The Bond Marketing Association had to send emissaries to the White House explaining the market dislocations that these product shortages were causing. As the result, a series of reverse auctions was set up to make buy-backs more orderly and transparent.


What came up was George W Bush. He couldn't quite wipe out the inherited surplus in FY2001, but he sure did put the budgetary kibosh on everything that came thereafter. A fiscal disaster of the first order.
Yes, when I said "people" I was referring to individuals and institutions, foreign and domestic.

Excellent point on the reverse auctions. Forgot about that!
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Old 08-22-2017, 02:35 AM
 
62 posts, read 20,653 times
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Originally Posted by Hoonose View Post
We the people and the US government could have the Treasury issue all the interest paying debt necessary to satisfy the world.
How would that be different than what we do now? Would the money just sit in a vault while we paid interest on it? What would be the point in that.

Theoretically, the reason to issue debt is that you can use it more productively than what it cost to issue.

The argument could be made that the government could put the money to better use, but that takes us deep into political (and subjective) territory.
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Old 08-22-2017, 09:54 AM
 
8,301 posts, read 3,466,952 times
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Quote:
Originally Posted by Bronn View Post
How would that be different than what we do now? Would the money just sit in a vault while we paid interest on it? What would be the point in that.

Theoretically, the reason to issue debt is that you can use it more productively than what it cost to issue.

The argument could be made that the government could put the money to better use, but that takes us deep into political (and subjective) territory.
Tongue in cheek. Essentially same old same old.

We pay off all debt with new debt.

It probably would not be very different, except for possibly new terms of interest and time to maturity.

Make it all low or even zero interest perpetual debt, and we really do make it different.

https://www.nakedcapitalism.com/2017...ual-bonds.html
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