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The bonds will mature and the govenment has to pay the money back with interest. If the government needs money, they issue more bonds.
The investors are merely lenders,not true investors.. the so called investers buy bonds to get interest when the government pays the principal back plus the interest.
The government cannot generate money without the taxpayer.
The double entry accounting is taxpayer vs government spending. Bonds issued is government taking money from the bond holder with a promise of payment and interest of that bond to the bond holder. If we cannot sell bonds, or interest rates on the bonds have to go up because there are no more buyers, we have no more money to borrow and we have problems. The interest rate would have to go higher to attract buyers . The government would have more debt on each bond to pay.
No, you're thinking way too hard. The government simply wires the checking account of the investor.
The government does not need taxes to function. Money is created by the government spending money. It credits the accounts through the banks. U.S. currency exists due to law; nothing more, nothing less. Banks act as accountants.
No, you're thinking way too hard. The government simply wires the checking account of the investor.
The government does not need taxes to function. Money is created by the government spending money. It credits the accounts through the banks. U.S. currency exists due to law; nothing more, nothing less. Banks act as accountants.
Figures magically appear/disappear on ledger sheets electronically. No money was created or changed hands. If the US overnment need more physical cash the federal reserve prints it and the cash in your wallet loses value.
There are too many videos on YT about the federal reserve and is a great way to be exposed to that you normally wouldn't.
Here's a very brief one. I suggest looking at more.
No, you're thinking way too hard. The government simply wires the checking account of the investor.
The government does not need taxes to function. Money is created by the government spending money. It credits the accounts through the banks. U.S. currency exists due to law; nothing more, nothing less. Banks act as accountants.
That is the problem. The credit card of the government printing money till inflation is over the top..
What is suppose to happen is when inflation hits, interest rates suppose to go up. It hasn't happened yet. And the government keeps printing more money into existence. We are now in unchartered territory.
If the government can keep printing money , sure, they don't need to pay it with taxes.. the deficit just grows and grows. The only way to pay the deficit down is to raise taxes or cut government spending.
Figures magically appear/disappear on ledger sheets electronically. No money was created or changed hands. If the US overnment need more physical cash the federal reserve prints it and the cash in your wallet loses value.
Irrelevant.
The cash in your wallet losing value is of no consequence. What makes a person wealthy or poor is the gap between them. The cash losing value in your wallet isn't exclusive to you... therefore, it doesn't matter.
Quote:
Originally Posted by Taratova
That is the problem. The credit card of the government printing money till inflation is over the top..
Government finances can in no way be linked to a credit card. This analogy is simply flawed. Stop using it.
Money printing does not cause real inflation. Money printing causes currency inflation, which is controllable through interest rate manipulation. Whether the government issues $0 or $100 trillion, there will still be real inflation due to inelastic demands in the economy.
Quote:
Originally Posted by Taratova
What is suppose to happen is when inflation hits, interest rates suppose to go up. It hasn't happened yet. And the government keeps printing more money into existence. We are now in unchartered territory.
The government sets the interest rates.
Uncharted territory? What does that even mean?
Quote:
Originally Posted by Taratova
If the government can keep printing money , sure, they don't need to pay it with taxes.. the deficit just grows and grows. The only way to pay the deficit down is to raise taxes or cut government spending.
It doesn't look good.
....but you still haven't explained why the government needs cut the deficit.
Your argument is an example of:
Appeals to emotion Attempting to manipulate an emotional response in place of a valid or compelling argument.
"We need to cut the deficit. I can't tell you why... we just need to. It can't be good."
I'm nervous it could happen sooner than later. Bush started it and Obama has really kept it going. There are so many drains on the system. What we need in Washington is a business man not a perpetual politician.
I'm afraid it's a matter of months, maybe a few years at most.
Quote:
Originally Posted by Cape Cod Todd
I'm nervous it could happen sooner than later. Bush started it and Obama has really kept it going. There are so many drains on the system. What we need in Washington is a business man not a perpetual politician.
Where is your evidence that federal deficit and debt crash the economy?
In fact, every Federal surplus / deficit reduction has been succeeded with a recession.
Opin_Unated :" Irrelevant. The cash in your wallet losing value is of no consequence."
ORLY? Can you eat the cash in your wallet?
So you mean to tell me that if you lost 98% of the purchasing power of the cash in your wallet tomorrow that it would have no effect on food shopping this weekend ?
"Money is created by the government spending money."
That money represents debt. Debt that has to be paid back.
The cash in your wallet losing value is of no consequence. What makes a person wealthy or poor is the gap between them. The cash losing value in your wallet isn't exclusive to you... therefore, it doesn't matter.
Government finances can in no way be linked to a credit card. This analogy is simply flawed. Stop using it.
Money printing does not cause real inflation. Money printing causes currency inflation, which is controllable through interest rate manipulation. Whether the government issues $0 or $100 trillion, there will still be real inflation due to inelastic demands in the economy.
The government sets the interest rates.
Uncharted territory? What does that even mean?
....but you still haven't explained why the government needs cut the deficit.
Your argument is an example of:
Appeals to emotion Attempting to manipulate an emotional response in place of a valid or compelling argument.
"We need to cut the deficit. I can't tell you why... we just need to. It can't be good."
Too many dollars chasing too few goods. Inflation. Not enough dollars, chasing too many goods, depression.
Deficit is never good. The fed is there to bail out the banks through taxpayer money if they lose money in bad investments. So who cares if they make bad investments, they don't.. it is on the backs of the American people.
Opin - you are uttering nonsense and making yourself look foolish.
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