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.
According to you, if the federal government regulates it, then they own it, you arent now admitting you are wrong, are you?
Actually the CEO of GM was put in place by the fedral government, and there was a federal seat belt law passed Jan 1, 1968. Two more examples of you being wrong
So you admit the EPA adds nothing to your point, I agree.
They do not . the math goes like this
Government sells $x in US Treasuries
Investors buy $x in US Treasuries
There is no increase in legal tender due to this transaction, its a revenue neutral transaction, but the debt increases. Are you sure you studied these things in school because I'm starting to doubt it
Wrong again, the funds come from the taxpayers
I've lost count on the number of errors you continue to make.
I am tired of seeing it posted so I am going to savagely attack this idiotic, OP ed favorite of junk economics.
1. The national debt is the money supply. The debt is the sum total of dollars that was created by the government. It prints money by running deficits because we use a double entry system where one debt = one credit. The rest of the money is created by bank loans, also a double entry system with a few exceptions like coins which are debt free.
2. Its who owns the debt that matters which can be the FED, US institutions, citizens, and foreign. The unqualified nominal amount of debt is meaningless. Debt to self is largely meaningless unless of course its used as money. One of the fasted growing areas of our debt is to the FED which is at 1.7 trillion. It actually reduces real debt since it dilutes the rest of it. The debt isn't being increased to buy anything; its being used to create money. Its their incompetent or corrupt use of the liquidity that is the problem. Not a single tax payer was bailed out.
3. It does not all need to be paid back. It must not all be paid back, and to do so would destroy the money supply almost entirely.
4. The US trade deficit is the same issue. Even US treasury coins that are not created with the debt facade as "debt free" money still becomes "check book", zero interest debt when it leaves our shores(dollars are check book money and bonds are saving account money). The problem is when other countries like to use our money because it goes out but never comes back in. The real problem is that the US economy is now only a small part of the world economy. So we are now highly leveraged. Its the bonds and outstanding dollars that comprise the foreign debt which has all meaning; the nominal national debt has none.
The real problems are
* mortgage debt to GDP ratio
* high land prices
* foreign debt and shrinking share of world economy increasing dollar leverage
* dollar carry trade
* zero interest rate policy
If you continue to whine about the national debt, you are listening to some brain dead main stream economic pundit provided for you as cover while in the real world they are field striping the country.
I basically agree with the main thrust of your post above.
National debt is a problem -- if it gets to the point where the interest payments become a sizable chunk of the national revenue. Or if it otherwise, by some other means or mechanisms (e.g., refusal to raise the debt ceiling) gets to the point where we have to reconsider paying bond holders on time.
Bigger problems that affect the dollar are things like household debt, private debt held by foreign creditors, price of energy and vital economic resources, and balance of trade. In short, if Americans consume more than they produce from abroad, then the value of the dollar is less. At the end of the day, economics, as complex as it can be, has a simple bottom line: paper money needs something to back it up. Look at the chart below and you'll see that things have changed a lot since the 1970s with regard to energy alone.
That's why, for example, when people blither away about Obama's economic performance, we really need some perspective. A recession when we still produce more than we borrow; still have a lower debt-gdp ratio; and have lower levels of household debt is much easier to recover from, and that's why we've been able to shake off previous recessions, even some nasty ones like the ones in the early 1980s and mid 1970s. It's not so easy now. In fact, it was in some ways easier to recover from the Great Depression than it will be for us to regain our footing in this current malaise.
Oh Wiemar again. Hyperinflation was caused by WWI and the biggest war indemnity ever devised. A gold standard would have saved them surely...Even though there was not in ounce in all of Germany.
As of now we have domestic stagnation and deflation. If its bolted down in the US like real estate or US labor, there is no money for it. All new money is being poured on the international markets and not a peep about it from all this faux fiscal conservatism.
so creating money out of thin air and introducing it to the money supply has no adverse effect on the ecomony, is what you are saying.who do you want to start pouring money into the U.S.A.? is it the government!! have you stop top think maybe U.S. policies are preventing corporation from investing here in America!!
The problem with the progressives is their patriarch had an important point, and they are not paying attention to it.
"euthanasia of the rentier"
You have to do one, two, three, not just one, two.
Without it, it can just cause asset price hell.
Not much you can do about an oil embargo which was the euthanasia of the Keynesians, and somewhat unfortunately. Now that we have a monetary problem and not an empty oil well, we could use it.
when federal debt is monetized.the government does so with no intention of paying it back. this causes inflation. the new dollars introduce into the money supply dilutes the value of of the money supply. there by driving up the prize of thing we buy! its a direct effect on every single American, working for dollars! monetizing debt just to be able to borrow more money that will never be repay. is very dangerous! remember Germany barrel of money to buy a loaf of bread.
You're clearly guilty of doing what the OP was talking about. You're thinking in terms of economics as though there are immutable rules that economies follow in any and every situation.
Expansion of the national money supply *can* cause inflation, but it does not always do so. If the economy is doing relatively well, meaning that if people are employed, if incomes are stable, and other factors such as energy and commodity prices are also stable, then yes, expanding the money supply creates artificial demand. It's that artificial demand that causes inflation.
Conservatives have been warning about hyperinflation for the past three or four years now, and it hasn't happened, despite years on end of record-low interest rates. That's precisely because consumer demand has been flat and unemployment persistent. Merchandisers and vendors, thus, are under pressure to keep prices in check; otherwise, goods are overpriced and they can't sell.
When does the price of oil go up? When the economy improves, pushing speculators to wager on demand over supply. If anything, you should be more worried about the price of resources instead of Ben Bernanke's money policy. Now, if the economy recovers and regains some of its old strength, this discussion changes. Yes, then we would need to be worried about out-of-control consumer borrowing and exaggerated demand.
so creating money out of thin air and introducing it to the money supply has no adverse effect on the ecomony, is what you are saying.who do you want to start pouring money into the U.S.A.? is it the government!! have you stop top think maybe U.S. policies are preventing corporation from investing here in America!!
You prefer money out of thin air being created by banks for currency speculation I take it?
You'd prefer the money domestic money supply contract by half too I suppose. Then GS can buy all our homes while we get rich losing them.
Give me your money if its so damaging in the hands of a tax payer.
...
The US government has no motive to do anything. Big business elects our government and the biggest one finance wants to print it. Thanks to this brilliant policy I just saw the prices on some foods double in a year.
You're clearly guilty of doing what the OP was talking about. You're thinking in terms of economics as though there are immutable rules that economies follow in any and every situation.
Expansion of the national money supply *can* cause inflation, but it does not always do so. If the economy is doing relatively well, meaning that if people are employed, if incomes are stable, and other factors such as energy and commodity prices are also stable, then yes, expanding the money supply creates artificial demand. It's that artificial demand that causes inflation.
Conservatives have been warning about hyperinflation for the past three or four years now, and it hasn't happened, despite years on end of record-low interest rates. That's precisely because consumer demand has been flat and unemployment persistent. Merchandisers and vendors, thus, are under pressure to keep prices in check; otherwise, goods are overpriced and they can't sell.
When does the price of oil go up? When the economy improves, pushing speculators to wager on demand over supply. If anything, you should be more worried about the price of resources instead of Ben Bernanke's money policy. Now, if the economy recovers and regains some of its old strength, this discussion changes. Yes, then we would need to be worried about out-of-control consumer borrowing and exaggerated demand.
money created out of thin air and intoduce into the ecomony is what has kept us going . but every time it has been done it has require larger amounts of worthless dollars monotizing government debt can not comtinue . there is no such thing as a free lunch
I basically agree with the main thrust of your post above.
National debt is a problem -- if it gets to the point where the interest payments become a sizable chunk of the national revenue. Or if it otherwise, by some other means or mechanisms (e.g., refusal to raise the debt ceiling) gets to the point where we have to reconsider paying bond holders on time.
Still not quite. If the debt is held by foreigners and institutions generally not productive. I have no problem with pension funds holding it.
My main point is increasing the debt with an expanding Federal Reserve Balance sheet is meaningless in terms of debt since its just turns into a Treasury rebate, but its potentially meaningful to halt stagflation since private lending is dead meat here in the US. Fed held debt only has implications as a money supply, not as a real debt.
The investment banks are certainly doing far worse right now. They just put their portfolio on the zero interest rate credit card the ZIRP green back.
Lets not forget what fat hogs long term treasuries will be with inflation even in foreign hands. I don't think 3% is going to be very damaging.
And if it were debt then you couldn't just cancel it could you?
You prefer money out of thin air being created by banks for currency speculation I take it?
You'd prefer the money domestic money supply contract by half too I suppose. Then GS can buy all our homes while we get rich losing them.
Give me your money if its so damaging in the hands of a tax payer.
...
The US government has no motive to do anything. Big business elects our government and the biggest one finance wants to print it. Thanks to this brilliant policy I just saw the prices on some foods double in a year.
You're clearly guilty of doing what the OP was talking about. You're thinking in terms of economics as though there are immutable rules that economies follow in any and every situation.
Expansion of the national money supply *can* cause inflation, but it does not always do so. If the economy is doing relatively well, meaning that if people are employed, if incomes are stable, and other factors such as energy and commodity prices are also stable, then yes, expanding the money supply creates artificial demand. It's that artificial demand that causes inflation.
Conservatives have been warning about hyperinflation for the past three or four years now, and it hasn't happened, despite years on end of record-low interest rates. That's precisely because consumer demand has been flat and unemployment persistent. Merchandisers and vendors, thus, are under pressure to keep prices in check; otherwise, goods are overpriced and they can't sell.
When does the price of oil go up? When the economy improves, pushing speculators to wager on demand over supply. If anything, you should be more worried about the price of resources instead of Ben Bernanke's money policy. Now, if the economy recovers and regains some of its old strength, this discussion changes. Yes, then we would need to be worried about out-of-control consumer borrowing and exaggerated demand.
Hi chickenfriedbananas
The reason why we are not seeing inflation domestically is because banks generally make loans secured by assets. There is nothing there to soak in a new loan. We are at debt saturation. Even worse is its been supported by rock bottom rates especially mortgages. Think how much damage. A 200k house at 5% rates now a 200k house at 4% is a serious and catastrophic back to the wall. Yet I'll bet most people think its the same housing price. Adjust the rate to 6% and see the price in 2006 terms.
Bank credit is dead meat. 80% of all bank loans were for mortgages. The only monetary growth is rent seeking over seas in in a currency war. Its stagflation as far as the eye can see. Unless people wake up to what I am trying to tell them.
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.
. the math goes like this
