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There is a point to be made that I do not think the solution to the business cycle ought to be deficit spending. Preventing the debt fueled ponzi schemes would obviate the need. My resignation for the large deficit is a concession for the horrors of the past for the sins of the FIRE sector.
Also keep in mind that with the end of the metal standard there is no net equity position. There is no pile of bars . As the system works now all private equity in the legal tender is a public liability. With the exception of coins it nets to zero.
You should have been in charge 10 years ago!
I was defensively prepared, but of course there was little else for us sheeple to do!
I agree with you in that the horrible morass was as a result of logarithmically advancing investment improprieties. Our economy crunched so seriously in 2008 that deficit spending was unavoidable. We were essentially having to go to war.
Not quite. The Founding Fathers set the system up so that state legislators appointed senators. Not the voters. That was the compromise instituted to get the states on board to ratify the constitution who were very wary of federal power. With senators appointed by the state legislators, the senators were beholden to their states and did the will of their state legislative bodies. The seventeenth amendment changed the system designed by the Founding Fathers, and some can give a good argument that this was the beginning of our loss of "checks and balances".
And I am one of those people who could make that argument.
Good point by you. The 17th Amendment is a mistake.
Saluting...
Mircea
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Originally Posted by gwynedd1
The amount of the nation debt = meaningless.
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Originally Posted by midnight12am
We are so much in debt the stupidest thing to do would be to try to pay it back.
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Originally Posted by Finn_Jarber
Most economists agree it would stupid to pay back the debt. As a matter of fact if it was all paid back, we'd be in big trouble, because most of the money is owed to
And you people are allowed to vote?
That's disgusting. No wonder America is FUBAR.
So, you all think you shouldn't pay back the National Debt.
Well, um, then, excuse me, but do you want to explain how pensions will be paid?
State government pensions, union pensions, corporate pensions, municipal city worker pensions, teacher, fire and police pensions....
...wanna explain how those will be paid?
I mean gosh, it's only $1.161 TRILLION....as of March 2013.
No big deal, right? I mean, $1.161 TRILLION I can find laying around almost anywhere. In fact, when it rains, it usually rains $1.161 TRILLION
~$3 TRILLION of the National Debt is Social Security and Medicare Trust Funds.
Granted, that's government debt and not public debt, but that $3 TRILLION will have to be converted from government debt to public debt over the next 10 years (as the Trust Funds collapse).
I projected the National Debt to be $17.270 TRILLION by the end of 2013, and at present rates, by the year 2017, the US National Debt will equal 1/3 of World GDP.
By 2025, the US National Debt will be approaching 50% of World GDP.
And by 2040, US National Debt will be greater than World GDP.
For those who don't get it, you need to go back and REDO FROM START Econ 201 and 202.
That is Theoretical (Imaginary) Value, not Real Value.
The Theoretical Value is meaningless. It is the Real Value that matters, and the Real Value of anything is what you actually receive in cash.
Example: Your home is worth $225,000 = Theoretical Value; You could only sell the home for $195,000 and that is the Real Value, not the $225,000 you imagined
I would suggest that you all re-visit this thread in about 10 years, but some of you won't be able to do that, unless your local public library or a neighbor still has internet.
Amused....
Not the way I look at it. Spending is the real tax. There are few left since most government taxation is privatized. When the government spends, it grants taxing rights to the tax payer, aka they are paid in government securities to go collect things for themselves. In the aggregate the time and effort going into a carrier battle group cannot be consumed by us.
Its mostly all hidden now. But what is the difference between taking raisins and buying them? The difference is the rasin grows don't pass the tax to me.
Sounds like your level of involvement and comprehension of our money systems is well beyond mine.
However I don't believe that taxation has to be correlated, coordinated or collected in any direct relationship to spending at the Federal level.
Central Gov't spending after all is generally spending and money into the private sectors of our economy. Of course this can create deficits if beyond simple tax receipts, but any debt expansion is simply more money to us. Taxing more or less at that point should be our option. But it should not be clouded with the false notion that our Gov't or we the people can go BK! The idea that some $?T amount of debt is somehow horrific and forms the basis for our economic policies when we have such low overall consumption, productive output and employment is scandalous. IMO of course.
Can you show us the constitutional amendment that allows for paper money by the federal reserve to act as currency and payment of debt please?
The constitution is history, literally and figuratively.
Apparently, you are not aware of law.
Notes, by law, are NOT money.
Congress has power to (a) coin money and (b) borrow money.
Coin money means stamp bullion.
Borrow money means to borrow money.
A note, as in FEDERAL RESERVE NOTE ("dollar bill") is a debt, see: Title 12 USC sec. 411.
Pursuant to law, obligated parties on notes, must accept them as tender in lieu of money.
Title 12 USC Sec. 411 lists the U.S. government as an obligated party.
Social Security Act of 1935 makes all "contributors" into obligated parties on that debt.
Article 1, Section 8. U.S. Constitution.
The Congress shall have Power
...To borrow Money on the credit of the United States;
...To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
Article 1, Section 10. U.S. Constitution
No State shall ... coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any ... Law impairing the Obligation of Contracts, ...
TITLE 12, USC sec. 411. Issuance to reserve banks; nature of obligation; redemption
" Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are authorized. The said notes shall be obligations of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in LAWFUL MONEY on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank."
MONEY - In usual and ordinary acceptation it means coins and paper currency used as a circulating medium of exchange, and does not embrace notes, bonds, evidences of debt, or other personal or real estate. Lane v. Railey, 280 Ky. 319, 133 S.W. 2d 74, 79, 81.
Black's Law Dictionary, Sixth Ed. p. 1005
NOTE - An instrument containing an express and absolute promise of signer (i.e. maker) to pay to a specified person or order, or bearer, a definite sum of money at a specified time. An instrument that is a promise to pay other than a certificate of deposit. U.C.C. 3-104(2)(d)
Black's Law Dictionary, Sixth Ed. p. 1060
TENDER - An offer of money ... Legal tender is that kind of coin, money, or circulating medium which the law compels a creditor to accept in payment of his debt, when tendered by the debtor in the right amount.
Black's Law Dictionary, Sixth Ed. p. 1467
You should have been in charge 10 years ago!
I was defensively prepared, but of course there was little else for us sheeple to do!
I agree with you in that the horrible morass was as a result of logarithmically advancing investment improprieties. Our economy crunched so seriously in 2008 that deficit spending was unavoidable. We were essentially having to go to war.
It is also galling to note how much of the "national debt" began as FIRE sector bank credit rolled onto it in cash for trash, zero productivity credit allocation. And they charge for this? Banks create most of the money, and as I keep pointing out, with respect to raising cite values, aka ground rent, what is going on supply side?
Go to a bank; inject 700k into the economy; and the supply is ... nothing. And where the hell do people think inflation comes from? Deficits? What a joke.
But the financial press and the stooges that consume it keep blaming the puppet instead of the hand inside it.
See any relationship between assets and government liabilities? Like you said, its exactly what you said.
Look if people don't like national debt then forgive all those money market accounts, government bond funds and pensions you have. Don't collect social security either. Pay it off..
Oh and expect a depression because all prices are measured in government liabilities. So unless rising personal debt and bank loans come to the rescue to support the quantity of money in circulation, expect the economy to tanks for decades.
Yep , great solution, lets all go into the deepest hock to banks in history to pacify deficit sperges.
Of course excellent point!
We shouldn't forget that it was private sector debt, not public which crashed us in 2008.
The public sector uses our currency, our central Gov't is its creator. Huge difference when it comes to those respective debts and their implications!
So, you all think you shouldn't pay back the National Debt.
Well, um, then, excuse me, but do you want to explain how pensions will be paid?
State government pensions, union pensions, corporate pensions, municipal city worker pensions, teacher, fire and police pensions....
...wanna explain how those will be paid?
It went right over your head, didn't it . If you read it without parsing out most of the post, you might understand it. I specifically said I do not want my pension to be paid until I retire. It obviously means they will be paid out of it when the time comes. The whole point was to say it would be disastrous to pay it off as a lump sum (which is not possible anyway).
It's not complicated, just try to avoid rushing into posting something to prove you failed to understand the post you reply to. Your post made you look like someone who should not be allowed to vote.
More taxes is not the answer we will just spend it, or if you think more taxes are the answer how much more?
we are rocking along like 17 trillion is nothing yet it is eating more and more of our gdp through maintain interest payments?
Are there any answers or are we headed one day in to default?
The only answer I see is for the economy to expand and grow at rates we have not seen in years while we do real cuts to more than defense
We tie federal spending to a percentage of the GDP. We end the politicians creating more government programs and entitlements, just so they can buy votes. this is only heading this country to an economic implosion.
Sounds like your level of involvement and comprehension of our money systems is well beyond mine.
However I don't believe that taxation has to be correlated, coordinated or collected in any direct relationship to spending at the Federal level.
There is nothing to it. Simply observe the human behavior and ignore the financials.
government takes raisins = government buys raisins
The differences is after if the raisin were sold then they would pass of the confiscation to the rest of us. Watch people take stuff. If I go to an all you can eat shrimp dinner and raisin growers ate all the shrimp, all you can eat no more.
The burden of government is spending. Taxation is merely a regulatory action on the value of money.
Quote:
Central Gov't spending after all is generally spending and money into the private sectors of our economy. Of course this can create deficits if beyond simple tax receipts, but any debt expansion is simply more money to us.
Right, but that could be done with lower taxes or even rebates. Now I suppose government by spending and consuming labor will raise its marginal utility. It will just by that measure shift buying power to labor.
When people confuse deficits with spending it does not go over well with me.
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Taxing more or less at that point should be our option. But it should not be clouded with the false notion that our Gov't or we the people can go BK! The idea that some $?T amount of debt is somehow horrific and forms the basis for our economic policies when we have such low overall consumption, productive output and employment is scandalous. IMO of course.
We agree for the most part.
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. If you read it without parsing out most of the post, you might understand it. I specifically said I do not want my pension to be paid until I retire. It obviously means they will be paid out of it when the time comes. The whole point was to say it would be disastrous to pay it off as a lump sum (which is not possible anyway). 