U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > General Forums > Economics
 [Register]
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.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 10-10-2013, 12:14 PM
 
Location: Aiken, South Carolina, US of A
1,776 posts, read 4,049,637 times
Reputation: 3609

Advertisements

The USA prints it's own money.
The government creates the money, and people are the end users by
spending it.
If the Government of the USA had no national debt, there would be NO MONEY
for anyone to spend.
So, please correct me if I am wrong, I think of the "debt ceiling" as this,
The USA government is filling up a giant pool with water from a hose,
but there are other hoses in this giant pool that go to other pools and so
forth.
The other pools will be states, people, ect.
If the debt ceiling if ignored, the Congress ignores the date in October,
technically, someone is turning off the hose.
If the hose is turned off, the flow of water will stop.
The giant pool and all the other smaller pools it feeds, will begin to dry
up.
Do I have this right? I have to think about it like this, it's easier for me to
understand.
Reply With Quote Quick reply to this message

 
Old 10-10-2013, 12:59 PM
 
18,353 posts, read 16,312,673 times
Reputation: 7154
Quote:
Originally Posted by Hoonose View Post
A large part of our national debt exists as American have desired cheap Chinese goods and foreign oil.

Not a new link, but I think the essence still applies. Maybe gwynedd1 can comment.

Does China Fund Our Spending? [SPDR S&P 500 ETF Trust, PowerShares QQQ Trust, Series 1 (ETF), SPDR Dow Jones Industrial Average ETF, iShares FTSE/Xinhua China 25 Index (ETF), Morgan Stanley China A Share Fund, Inc., SPDR S&P China (ETF)] - Seeking Al

I would classify that as the foreign debt, but one where the US has much more leverage given its in its own currency. There are consequences if it becomes large enough, but foreclosure isn't one of them.

Much more important is how its distributed. If it continues to be a wealth elite in China, the buying power will not chase the broad side of the US economy.

We have a form of Dutch disease , only in this case its from a reserve currency. If we export currency we must have a balance of trade deficit. That means we need to consume more foreign made goods and services which drives down the demand for US labor and capital.

For example, suppose you were the most popular person in town. Suppose again a simple invitation to your family gatherings were of great political value. Suppose again I would send my children over to mow your lawn and wipe your windows for this invitational favor, and its document with an RSVP . Suppose the children were paid an allowance. It is the children of the wealthy with no stream of income. This is the state of the US labor force, but there is no love for them....We do not need workers to grant favors. China certainly does.
Reply With Quote Quick reply to this message
 
Old 10-10-2013, 01:03 PM
 
18,353 posts, read 16,312,673 times
Reputation: 7154
Quote:
Originally Posted by Butterfly4u View Post
The USA prints it's own money.
The government creates the money, and people are the end users by
spending it.
If the Government of the USA had no national debt, there would be NO MONEY
for anyone to spend.
So, please correct me if I am wrong, I think of the "debt ceiling" as this,
The USA government is filling up a giant pool with water from a hose,
but there are other hoses in this giant pool that go to other pools and so
forth.
The other pools will be states, people, ect.
If the debt ceiling if ignored, the Congress ignores the date in October,
technically, someone is turning off the hose.
If the hose is turned off, the flow of water will stop.
The giant pool and all the other smaller pools it feeds, will begin to dry
up.
Do I have this right? I have to think about it like this, it's easier for me to
understand.

There is nothing to correct . You have described it precisely. Unless the savings rate becomes zero, we are going to have a problem , or worse. What if people pay off their bank credit?

Like I keep saying, if people don't like debt then perhaps its not a good idea to use it as money.
Reply With Quote Quick reply to this message
 
Old 10-10-2013, 02:04 PM
 
10,028 posts, read 4,385,922 times
Reputation: 1977
Quote:
Originally Posted by gwynedd1 View Post
I would classify that as the foreign debt, but one where the US has much more leverage given its in its own currency. There are consequences if it becomes large enough, but foreclosure isn't one of them.

Much more important is how its distributed. If it continues to be a wealth elite in China, the buying power will not chase the broad side of the US economy.

We have a form of Dutch disease , only in this case its from a reserve currency. If we export currency we must have a balance of trade deficit. That means we need to consume more foreign made goods and services which drives down the demand for US labor and capital.

For example, suppose you were the most popular person in town. Suppose again a simple invitation to your family gatherings were of great political value. Suppose again I would send my children over to mow your lawn and wipe your windows for this invitational favor, and its document with an RSVP . Suppose the children were paid an allowance. It is the children of the wealthy with no stream of income. This is the state of the US labor force, but there is no love for them....We do not need workers to grant favors. China certainly does.
Maybe in a generation when China becomes more consumer oriented they might throw us a bone and we might employ more here.
Reply With Quote Quick reply to this message
 
Old 10-10-2013, 06:27 PM
 
Location: TX
795 posts, read 1,253,249 times
Reputation: 783
Actually there is a correction. While minor, it is frequently misunderstood.

Printed money isn't "spent" - the overwhelming majority of printed funds are invested.

Many folks (especially here) are under the impression that most printed or gov't budget money is wasted on frivolous things. It is not.
Reply With Quote Quick reply to this message
 
Old 10-10-2013, 06:29 PM
NCN
 
Location: NC/SC Border Patrol
21,132 posts, read 22,502,881 times
Reputation: 23251
Quote:
Originally Posted by N.Y.Traveler View Post
Print & spend!
Print & spend!
Print & spend!
Print & spend!
This is the only solution we have...
Stansberry's Investment Advisory
Reply With Quote Quick reply to this message
 
Old 10-10-2013, 08:38 PM
 
10,028 posts, read 4,385,922 times
Reputation: 1977
Quote:
Originally Posted by NCN View Post
Buy Gold!
Buy Gold!
Buy Gold!
Reply With Quote Quick reply to this message
 
Old 10-10-2013, 10:19 PM
 
4,173 posts, read 3,057,845 times
Reputation: 2629
Quote:
Originally Posted by Hoonose View Post
Buy Gold!
Buy Gold!
Buy Gold!
You don't suppose Stansberry can assist with that, do you?
Reply With Quote Quick reply to this message
 
Old 10-11-2013, 08:56 AM
 
10,028 posts, read 4,385,922 times
Reputation: 1977
Quote:
Originally Posted by shaker281 View Post
You don't suppose Stansberry can assist with that, do you?
I'd bet a gold bar he could!
Reply With Quote Quick reply to this message
 
Old 10-14-2013, 10:44 AM
 
Location: Long Island, NY
19,713 posts, read 12,044,561 times
Reputation: 5615
Quote:
Originally Posted by CIB View Post
Good Morning from Texas,

I want to know why severe deficite spending is good for our country. Can anyone explain that to me? It seems to me it's a house of cards that can bring the nation down at some point in time.

It seems that John Meynard Keynes' philosophies have taken over our thinking about how to run a government.

My philosohy is to NOT spend more than 'you' take in and not accumulate a lot of debt.

I guess that's pretty stupid huh?

CIB
I don't know what you imagine Keynesian economics to be but it is NOT spend more than 'you' take in and not accumulate a lot of debt.

Keynes believed that in severe recessions and depressions fiscal spending and loose monetary policy can be effective at dampening the recession or depression or reversing it. He also believed that high inflation boom times can be controlled by running fiscal surpluses and raising interest rates.

Keynes' theories have been well proven.

Oh, how many here know that the deficit is plummeting?
Reply With Quote Quick reply to this message
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.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2020, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top