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What about all the people with savings that you just eviscerated with your inflation? Why did they have to pay for your reckless spending? What happens when interest rates go up, and borrowers wind up paying more? What happens when house prices are depressed, leaving millions underwater or unable to sell and move?
Whatever attracted you to the Economics forum, when you clearly know nothing about it? I doubt you're here to learn or you wouldn't make such wild-eyed pronouncements as, "just reduce it via inflation".
If you just "saved" then that's simply not smart and is reckless.
One thing hording money and another spending it.. Those who horde it dont help the cause, and those that spend it create jobs. Your just being greedy if your all about hording.
The same was done to fund the Revolutionary War, the War of 1812, the Civil War, and on and on. Until relatively recently, wars and economic collapses (rather than tax cuts) were the classic causes of national deficits.
Beyond that, many people tend not to perceive the difference between households and national governments. They think the rules are the same for both of them and for the corporate sector as well. Big mistake there.
I get it, but rules should apply same as anything else. If you got the money, than plan a budget. If you dont, than why keep over spending it. I understand other countries loans other countries money for rebuilding war torn places, but they should be the one footing the bills for their own mess. Were still paying for germany, and iraq.. wars that are done and gone and still paying on them.
There's about a billion dollars worth of debt still floating around out there from the Civil War. Never paid it off, just rolled it over for 150 years. Households can't do that. National governments can. In economic terms, there is a vast gulf of difference between the two.
National debt is a fiction. It cannot be repaid, it is darn impossible in principle to repay it, an atempt would remove all the money in circulation and there still would be "debt" remaining. National debt is a way to inject new money in the system. For you to save national "debt" must increase. In the end money is just an abstract tool. for as long as money can be used to entice and coerce people into laboring they can create debt by megazillions to the end of days.
Since all money is in the form of a debt or security, yeah pretty much like you said. There is no equity on the books in our monetary system.
There is no money in your checking account. The bank has taken it all and used it for its own purposes. All you have is the "worthless IOU" inherent in the bank's unsecured promise to honor your checks as they are presented. Welcome to the real world, a place in which -- despite all the confused and baseless babble -- SS sits on $2.86 trillion worth of the most secure assets in the world.
That was true during the metals days. You have more or less given bank IOUs to the bank at this point. I mean I assume you did not deposit bullion.
The same was done to fund the Revolutionary War, the War of 1812, the Civil War, and on and on. Until relatively recently, wars and economic collapses (rather than tax cuts) were the classic causes of national deficits.
Beyond that, many people tend not to perceive the difference between households and national governments. They think the rules are the same for both of them and for the corporate sector as well. Big mistake there.
I always said that the muscle would trade one of their pearly handled 45's for an invitation to Don Corleone's daughter's wedding. Its a promissory note as good as cash. But after the wedding, there would be a depression.
Those two sentences explain the bulk of the money system. The fact is the Don either needs to extend the wedding date or have more daughters if this system of exchange is to be maintained. Also note that issuing too many invitations will have a marginal effect , and will not doom the Corleone currency. The loss of their power and influence will collapse the value of the invitation, just like Confederate currency. Using the invitations to expand into Vegas will actually pay for the invitations and allow even more of them to float.
Now what happens when you or I try to trade for an invitation?
It's true today. The bank leaves ZERO dollars in your checking account. "Metals" have nothing to do with it.
Quote:
Originally Posted by gwynedd1
You have more or less given bank IOUs to the bank at this point. I mean I assume you did not deposit bullion.
Why would I ever have owned bullion to begin with? Even as a commodity trader, I would prefer to deal in sow-bellies, a market not so badly corrupted by the bedazzled. All currencies today are backed by the outputs of real goods and services produced by currency-issuing economies. Unlike various alternate and predecessor systems, this one actually works out quite well.
so there are 15966.15 x 1000 x 1000 inches to the moon
1000 x 1000 is a million (1 with 6 zeros)
a trillion is a 1 with 12 zeros
a trillion divided by a million is a million
so the distance to the moon is 15966.15 trillion inches
our national debt is ~20 trillion
15966/20 = 798
798/2 = ~400 trips to the moon and back to get an idea of 20 trillion inches
There is absolutely no way to pay it off.
The only 2 possible outcomes are to inflate it away or default.
[edit:] the distance to the moon is 16 billion inches
so divide 20 trillion by 16 billion which is essentially:
20,000/16 = 1250
or ~625 round trips to the moon in inches.
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opps I was off on my math
