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It's a screed and it's none too precise, but the central point is correct. Neither the US nor any other major economy carrying debt will do anything but service that debt -- that is, make all scheduled payments of principal and interest. There is no reason on earth to pay off the debt, and even paying down a tiny bit of it ($367 billion) during the four years of the Clinton budget surpluses caused market dislocations. There is nothing magical or mysterious in any of this. Federal finance is simply different from personal or household finance.
No that makes no sense at all and it's just another poorly written article by some very young fella - Raul Carrillo.
Both private and public debt needs to be either paid off or destroyed thru bankruptcies and defaults. Optimum debt level for the new organic economic growth to start is 130% debt/gdp.
Sometimes one must go through economic devastation (economic winters) in order to destroy bad debt (not hide it) and pave the way for a real recovery (spring). We are clearly in a depression. We have spent trillions of future Americans' money to try to cover up this fact. The real problem is that we have not addressed the real problem yet, which is debt.
We must reduce total debt to GDP to about 130% - this is the bottom - from today's 380%. So, from 2001-PRESENT we have not DONE ANYTHING but a coverup of the depression, which has cost us trillions.
Our leaders - and I am thiinking especially of the FED leaders - should be arrested for this. They are not ignorant of the Business Cycle. They are attempting to avoid or deny this truth, for the sake of their own interests. And our ignorance serves their ends, in fact.
It's common to ask Washington to "balance its checkbook," but although the government faces constraints like inflation, it can always lend or spend money into existence.
Here, he downplays the negative impact and effects of Monetary Inflation on you personally, as well as all Americans. His claims are typical of people who have never experienced Monetary Inflation.
It isn't particularly well written, but the central point is quite correct. The US will never pay of its public debt and neither will any other significant economy.
Quote:
Originally Posted by Mircea
Here, he downplays the negative impact and effects of Monetary Inflation on you personally, as well as all Americans. His claims are typical of people who have never experienced Monetary Inflation.
Yeah, yeah, yeah. We heard for years about how this giant overhang of hyper-inflation was going to come crashing down on us soon. Where is it?
It's a screed and it's none too precise, but the central point is correct. Neither the US nor any other major economy carrying debt will do anything but service that debt -- that is, make all scheduled payments of principal and interest. There is no reason on earth to pay off the debt, and even paying down a tiny bit of it ($367 billion) during the four years of the Clinton budget surpluses caused market dislocations. There is nothing magical or mysterious in any of this. Federal finance is simply different from personal or household finance.
In my vocabulary, 'balancing the budget' does not mean max-out another credit card to cover expenses you can not afford with your budget.
Your vocabulary -- among other things -- is woefully incomplete. YOU CANNOT DETERMINE DEFICITS BY DIFFERENCING SUCCESSIVE DEBT POSITIONS. There is much more than that involved.
Quote:
Originally Posted by Submariner
He may have made a token drop-in-the-bucket payment on debt, BUT at the same time he DOUBLED our national debt.
A total of $367 billion worth of debt held by the public was bought down over four years. The overall debt rose over the period because SURPLUS collections by Social Security were invested in Treasury securities. Did you take that into account? Were you even aware of it?
Why not just admit that you don't know how any of this works? You are basically claiming that if there is more money in the coffee can today than there was a week ago, it is impossible that anyone took some out this past Tuesday. Such a a notion is simply silly. Deficits are the excess of outlays over receipts. This is the only proper way to calculate them. Either do it that way or don't do it at all. Other methods will only end in embarrassment.
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