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Thread summary:

Public debt: mortgage, credit card, government bonds, investments, loans money.

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Old 01-09-2009, 11:11 PM
 
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I have tried to get this across but I will try again. I see some people are concerned that they will leave their children saddled with debt. Because of a growing national debt?

The average person owes some 30,000K plus. That sounds just terrible. However these same children will be saddled with 300,000K in mortgage auto and credit card debt at interest. The fun part is they need to be in debt 300,000k because their own debt circulates as money. When they try to pay it off(collectively) a depression must occur.

That 30,000K public debt is not at interest(unless it was sold to China). So we are happy to pay banks for the use of 45 trillion of the money supply with interest while 10 trillion is interest free?(assuming a total 55 trillion money supply). That sounds like financiers have been peaching about how bad the national debt is. Good for them, bad for us.


Certainly if the government kept cranking out government debt to excess then we would have an inflationary problem. However if all commercial credit to the tune of 45 trillion were to be replaced by this then we would "owe" the Federal Reserve a total of 55 trillion(if of course no one held bonds). That would be at 0 interest and never needs to be paid back. Thats fine by me.


Now if banks need to be compensated for their services then let them charge up front for this service instead of the hidden inflation and foreclosure tax by the scam fractional reserve system. If its a 5% rate then that 45 trillion is costing us about 2 trillion a year just to pass around electronic tokens.

Ron Paul won't save you. He wants a gold backed fractional reserve currency which is another scam. A gold backed fractional reserve currency its still more than 90% fluff of thin air created bank notes. That sounds like the financiers have another friend indeed as fiat currency is a scapegoat for the fractional reserve scam.
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Old 01-10-2009, 01:56 AM
 
1,566 posts, read 2,843,468 times
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hahaha debt is a good thing outstanding
print and borrow print and borrow
no way it bites us ever
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Old 01-10-2009, 03:07 AM
 
Location: western East Roman Empire
7,456 posts, read 11,242,810 times
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I understand what you are saying, gwynedd1, but I don't think the underlying issue is how we tinker with the financial system or the monetary system.

The real issue is whether we are productive or not, whether we are corrupt or not.

Even if we had an efficient and fair financial system, history shows that corrupt men can ruin even good institutions.

To go back on topic, to support your argument, I would point to Japan: though the Japanese economy as measured by GDP growth and equity prices has more or less stagnated since their real estate crash in the late 1980s, I believe it was, while the national debt/GDP ratio has ballooned to well over 100%, it seems that the Japanese standard of living has remained at a high level, as measured by life expectancy, among other indicators, such as the pace of technological innovation in terms of public transport and electronics.

But I would defer to an expert on Japan to verify that.

But again, the US too could have the government run banks and direct infrastructure investment, but if the men controlling the resources and making the investment decisions are corrupt, that won't work too well either, regardless of how they finance themselves (to be sure, in the name of the "good of the American people").
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Old 01-10-2009, 03:32 AM
 
Location: Sheepshead Bay, Brooklyn, New York
195 posts, read 691,248 times
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The deficit is about $11 trillion dollars!
Obama will add another one trillion...
This is about the same size as the U.S. economy!
I have never heard the debt is good until now!
Anyone is interested to see the Chinese releasing the U.S. treasury bonds all at once?
Be my guest....
As a matter of fact, if the national debt continued to grow; the Chinese would be likely to stop loaning money to the U.S. because they are worrying the Americans might not be able to repay it!

Last edited by N.Y.Traveler; 01-10-2009 at 04:11 AM..
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Old 01-10-2009, 03:47 AM
 
Location: western East Roman Empire
7,456 posts, read 11,242,810 times
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Quote:
Originally Posted by N.Y.Traveler View Post
The deficit is about $11 trillion dollars!
Obama will add another one trillion...
This is about the same size as the U.S. economy!
I have never heard the debt is good until now!
Anyone is interested to see the Chinese releasing the U.S. treasury bonds all at once?
Be my guest....
As a matter of fact, if the national debt continued to grow; the Chinese would be likely to stop loaning money to the U.S. because they are worrying the Americans might not be able repay it!
I don't think that the OP's point is whether debt is good or bad, but that it is indispensable if people intend to exchange goods and services; what is good or bad, however, is who issues it and controls it. And I would add whether debt is used to raise productivity and maintain a balance between production and consumption, or wasted on reckless consumption.

Again, the Japanese national debt/GDP ratio is well over 100% (I think as high as 170%), but, as far as I know, the standard of living remains high.

Now, if the Chinese stopped buying US treasuries, the consequences would be that US workers would have to learn again how to make such basic goods as shoes and socks, pronto. Hopefully the transition to a more balanced global manufacturing, trading and finance system will be gradual, not abrupt.

We will see what the series of G-20 meetings, the next one scheduled in April in London, will come up with, if anything.

Eventually, I expect some kind of managed-float exchange rate system, maybe even a nearly fixed rate system among regional currency blocs, and a global pooling of retirement funding for the world's working class population, with all the implications for the standard of living (the Japanese too, eventually).

Last edited by bale002; 01-10-2009 at 04:02 AM..
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Old 01-10-2009, 04:12 AM
 
Location: Sheepshead Bay, Brooklyn, New York
195 posts, read 691,248 times
Reputation: 89
Quote:
Originally Posted by bale002 View Post
I don't think that the OP's point is whether debt is good or bad, but that it is indispensable if people intend to exchange goods and services; what is good or bad, however, is who issues it and controls it. And I would add whether debt is used to raise productivity and maintain a balance between production and consumption, or wasted on reckless consumption.

Again, the Japanese national debt/GDP ratio is well over 100% (I think as high as 170%), but, as far as I know, the standard of living remains high.

Now, if the Chinese stopped buying US treasuries, the consequences would be that US workers would have to learn again how to make such basic goods as shoes and socks, pronto. Hopefully the transition to a more balanced global manufacturing, trading and finance system will be gradual, not abrupt.

We will see what the series of G-20 meetings, the next one scheduled in April in London, will come up with, if anything.

Eventually, I expect some kind of managed-float exchange rate system, maybe even a nearly fixed rate system among regional currency blocs, and a global pooling of retirement funding for the world's working class population, with all the implications for the standard of living (the Japanese too, eventually).
Sorry!
I did not read the whole thing!
I only read the headline!
Debt is debt; it is no good anyway!
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Old 01-10-2009, 05:10 AM
 
18,353 posts, read 16,315,244 times
Reputation: 7154
Quote:
Originally Posted by N.Y.Traveler View Post
The deficit is about $11 trillion dollars!
Obama will add another one trillion...
This is about the same size as the U.S. economy!
I have never heard the debt is good until now!
Anyone is interested to see the Chinese releasing the U.S. treasury bonds all at once?
Be my guest....
As a matter of fact, if the national debt continued to grow; the Chinese would be likely to stop loaning money to the U.S. because they are worrying the Americans might not be able to repay it!
Hi N.Y.Traveler,

Under the current system of dollars as debt instruments unfortunately debt is necessary. By your post I can tell you you don't know how our money works. That is understandable, its not intuitive. It would be simple to pay off the Chinese with paper we create. They may not like having it inflated is all.
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Old 01-10-2009, 10:09 AM
 
1,020 posts, read 2,299,958 times
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Quote:
Ron Paul won't save you. He wants a gold backed fractional reserve currency which is another scam. A gold backed fractional reserve currency its still more than 90% fluff of thin air created bank notes. That sounds like the financiers have another friend indeed as fiat currency is a scapegoat for the fractional reserve scam.
THANK YOU! If I had a nickel for how many people I've encountered who don't understand that replacing fiat with gold won't solve inflation under current monetary policy, we could pay off all that debt to China, LOL. For some reason, people like to believe this fallacy. Since gold is scarce and in the ground, we can only have so much of it. But, we can print as many notes to represent it as we want.
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Old 01-10-2009, 03:46 PM
 
48,509 posts, read 86,196,823 times
Reputation: 18105
Just think of it this way ;just the interest alone on the national debt would pay for many things like medical insurance for everyone. Now with the proposed borrowing for the 850 billion stimulus do you think its likely in your lifetime or any other massive program unless you pay for it with higher taxes on everybody.
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Old 01-10-2009, 04:29 PM
 
18,353 posts, read 16,315,244 times
Reputation: 7154
Quote:
Originally Posted by texdav View Post
Just think of it this way ;just the interest alone on the national debt would pay for many things like medical insurance for everyone. Now with the proposed borrowing for the 850 billion stimulus do you think its likely in your lifetime or any other massive program unless you pay for it with higher taxes on everybody.
Hi texdav,

Lets start here. Where do you think the 850 billion dollars will come from?
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