Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
True, but, being politically realistic a partisan solution won't stick because no one party will remain sufficiently dominant long enough to carry it out (you need years and years of balanced or surplus budgets)
You don't understand at all. There is no need to erase the debt. The US can only default on the debt by failing to pay the interest. They can always do that by simply printing the $$$..
All the political BS is about increasing the size of the debt. The Reps are always extremely anti deficit spending and debt when a Dem is president. When a Rep is president, they love it. The reason is because deficit spending would stimulate our economy. Especially over the last 7 years we should have had a lot of it! The Reps want the economy to be poor so they can use it as a political tool to elect more Reps.
Four pages of people who still don't understand what the hell public debt is.
The public debt is owed mostly to foreigners; so, yes, in some accounting it becomes an actual liability. Putting the printing presses into overdrive to pay off the debt would not resolve anything, since it effectively makes everyone in the country poorer.
You don't understand at all. There is no need to erase the debt. The US can only default on the debt by failing to pay the interest. They can always do that by simply printing the $$$..
All the political BS is about increasing the size of the debt. The Reps are always extremely anti deficit spending and debt when a Dem is president. When a Rep is president, they love it. The reason is because deficit spending would stimulate our economy. Especially over the last 7 years we should have had a lot of it! The Reps want the economy to be poor so they can use it as a political tool to elect more Reps.
Printing the dollars is the inflationary default mechanism; if it does come to an effective default and the Democrats are the party in control when it is done is what will happen. If it is the Republicans it will be, as you put it, erasing the debt, which once the right-wing in this country comes face to face with the choices that will need to be made on our current trajectory will be their (our) preferred course of action. Thank you, however, for providing such a salient example of one of the Democratic backers who has reached the point where the level of mutual sacrifice required to pay down the debt is too much for them to be willing to accept.
What happens when other countries stop using the petro dollar? Do we just continue to assassinate those leaders like we have in the past? If the world stop recognizing the worthless Federal Reserve Note, the USA will crumble. Iraq and Lybia were attacked when they threatened to go off the petro dollar, yes?
Printing the dollars is the inflationary default mechanism.
You still don't get it at all. Printing $ doesn't necessarily cause inflation. It certainly wouldn't have been an issue for the last 7 years. But we got QE and bank bailouts instead. There is a very good reason why that happened, and it has nothing to do with policies that would be good for the US economy and US consumers.
The US is never going to default. Neither party is that stupid.
What happens when other countries stop using the petro dollar? Do we just continue to assassinate those leaders like we have in the past? If the world stop recognizing the worthless Federal Reserve Note, the USA will crumble. Iraq and Lybia were attacked when they threatened to go off the petro dollar, yes?
What US oligarchs want and what is good for the US public are two different things.
You still don't get it at all. Printing $ doesn't necessarily cause inflation. It certainly wouldn't have been an issue for the last 7 years. But we got QE and bank bailouts instead. There is a very good reason why that happened, and it has nothing to do with policies that would be good for the US economy and US consumers.
The US is never going to default. Neither party is that stupid.
Monetizing the debt is in the long term precisely an inflationary default, regardless of whether in the short term the effect is to increase price levels or decrease the velocity of money. The cash remains in the system, regardless of whether the fuse on the bomb is measured in days or years. Explicit default isn't fundamentally stupid. It would PO holders of the debt (which are mainly foreign governments, who would have to suck it up, and large financial organizations which could be bailed out if they go into negative equity and collapse) and make it harder to borrow in the future, but if you're a conservative who doesn't think we should be running a deficit in the first place you don't really care about the latter.
$5.117T is accounting-fiction government debt to the government itself. There are real underlying problems with unfunded long term mandatory spending, but this chunk of the debt isn't really real, since it's federal tax dollars paying back federal tax dollars.
$2.461T is at the Fed. This is the Obama administration's people at the fed having already begun the process of partial de-facto default via monetizing the debt. In theory this can be pulled back by reselling rather than writing down the debt while held at the fed; it could play out either way depending on who holds the Presidency (and thus who holds the now politicized chairmanship after what Obama's people have done).
$10.563T billion is out in the wild.
of this:
$6.013T is owed to foreigners, mainly governments and bankers.
$4.55T is owed to domestic holders, including both the private sector and state/local governments and organizations.
Last edited by ALackOfCreativity; 03-22-2015 at 09:13 PM..
Monetizing the debt is in the long term precisely an inflationary default
I never said the debt would be monetized. I said it doesn't matter how big it gets. Opin_Yunated convinced me that the only negative effect of a high debt would be a reduction in the foreign exchange value. This is something we sorely need to increase domestic production and revive our economy that has been based on debt bubbles for 35 years.
Quote:
if you're a conservative who doesn't think we should be running a deficit in the first place you don't really care about the latter.
No one who understands money and the economy even a little bit would want a balanced budget. Fiscal conservatism is great when it's your own finances, but when it concerns national finances in a country that controls it's own currency, it's just plain stupid.
I never said the debt would be monetized. I said it doesn't matter how big it gets. Opin_Yunated convinced me that the only negative effect of a high debt would be a reduction in the foreign exchange value. This is something we sorely need to increase domestic production and revive our economy that has been based on debt bubbles for 35 years.
There's a very simple truism that applies in this scenario: what can't go on forever, won't.
At some point the government will run out of private and foreign buyers willing to accept any more of its debt at a low interest rate, and then you face the decision of explicit default, monetary default, or cripplingly fast and deep austerity. Until that point he's right, but eventually you will hit a point of crisis and he will be suddenly, drastically wrong, as the people of Greece found out and as the people of Japan likely will be the first to among major nations.
Quote:
No one who understands money and the economy even a little bit would want a balanced budget. Fiscal conservatism is great when it's your own finances, but when it concerns national finances in a country that controls it's own currency, it's just plain stupid.
That's your opinion, but it isn't fact, and if you do believe in that opinion so strongly, you'd be best to support a bipartisan deal to balance the budget in a manner that is mild, gradual, and still allows deficits in recessions, because the writing is on the wall as to the future viewpoint of the Republican base (and eventually as these things go, the party) -- using the debt ceiling so aggressively to extract concessions is partially driven by anger and frustration with Obama, but also by a fear of default that is rapidly falling on the right as people reassess how undesirable one would really be. If you don't want Republicans pushing for, and maybe enacting, depending how it plays out, that policy, Democrats will need to get out in front of this thing and be willing to do real spending cuts (and not just on things that disproportionately benefit conservative constituencies) in return for the tax increases that would be Republican side of any bargain, and fast: Obama clearly isn't, and if it's not done under the next administration we'll likely be past the point of no realistic return.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
