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Yes because the government has to remove money from the public sector in order to spend it.
Actually no it doesn't. You clearly have no idea how money is created. I recommend you educate yourself on public finances before participating in this discussion.
Quote:
Originally Posted by pghquest
That doesnt mean that more debt is needed to raise the GDP.. Thats nonsense...
That's exactly what it means. Where do you think money comes from?
Quote:
Originally Posted by pghquest
GDP is the total sum of all money spent, and the faster its spent and circulated, the higher the GDP..
That doesnt mean you need debt in order to raise the GDP..
If tomorrow there was some policy encouraging the businesses to spend the trillions of dollars they are sitting on, then tomorrow the GDP would rise by trillions of dollars.
NO debt by the federal government would be required to do so.
You are posting garbage and then expect people to take you seriously
I'll stipulate that short term deficit spending will stimulate the economy temporarily but you have to go back and reduce that debt to facilitate long term economic progress. Eventually, the bills come due.
Oh really?
who is the "bill collector" for the U.S. government?
Actually no it doesn't. You clearly have no idea how money is created. I recommend you educate yourself on public finances before participating in this discussion.
Money creation isnt GDP, money SPENT is..
Quote:
Originally Posted by Opin_Yunated
That's exactly what it means. Where do you think money comes from?
I know where it comes from but thats a different subject completely..
They've been pumping trillions of dollars into the economy over the last several years (QE), but the GDP hasnt grown by trillions of dollars...
There is a reason for that of course, because your synopsis is garbage
Quote:
Originally Posted by Opin_Yunated
Actually no I'm not. My formula stands.
Thats not YOUR forumla, and its not the formula in question, its your synospsis that something unrelated to the formula is required in order to increase the result.
Wages are decided by supply and demand....The government hasn't managed the economy well enough. The bottom line is that the democrats put it's power base into the poorest and the richest of the country and somewhere along the line decided they didn't need the middle class to stay in power....That simple,,
Oh I read the graph just fine. Please cite for me what part of the graph deals with debt.
In fact your own graph proves you WRONG..
From 2005 to 2010, federal spending as a percentage of GDP actually fell, but GDP rose..
the reason for this is of course that the private sector held onto that money and spent it, and the public sector has about 6-7 times the spending power that the federal government has.
GDP = Federal spending / money creation + private sector spending + net exports
Quote:
Originally Posted by pghquest
I know where it comes from but thats a different subject completely..
They've been pumping trillions of dollars into the economy over the last several years (QE), but the GDP hasnt grown by trillions of dollars...
I already told you to read up on fractional reserve banking. (hint hint!)
Quote:
Originally Posted by pghquest
There is a reason for that of course, because your synopsis is garbage
Thats not YOUR forumla, and its not the formula in question, its your synospsis that something unrelated to the formula is required in order to increase the result.
Oh I read the graph just fine. Please cite for me what part of the graph deals with debt.
In fact your own graph proves you WRONG..
From 2005 to 2010, federal spending as a percentage of GDP actually fell, but GDP rose..
the reason for this is of course that the private sector held onto that money and spent it, and the public sector has about 6-7 times the spending power that the federal government has.
Wow, you really need to go back to math class.
Federal spending "fell," because if you look at the formula and move the values to the other side of the equation, you will realize that:
Federal spending = private sector spending + foreign sector balance (exports vs. imports)
The graph shows it. The government balance line is a direct inverse of the summation of households + businesses. Hence, the national debt = all the wealth floating around internationally and domestically in U.S. T-securities.
Please, go back to school.
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