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First, I don't see how you extrapolated from my post that "economic growth that you are imagining is going to come from aging baby boomers and poorly educated illegal immigrants working at Wal-Mart and McDonald's."
Second, You presume that "America doesn't have the economic growth to grow out of dozens of trillions of dollars of debt," which has not been established. Not only is it not established, it's false. Below is a graph of real GDP for the last 20 years. As you can see, real GDP grew steadily until 2008, when the economic crisis hit, and resumed growth in 2009. Stating that America can't grow out of its debts is contrary to the facts. It has in the past and will in the future. There is no reason to suspect that GDP growth will not continue.
What America can't continue to do is continually cut taxes while complaining about government debt.
Your theory is that increasing the money supply causally decreases the value of the dollar. Here are two graphs, M1 money supply and the value of the dollar. Notice how the largest decline in the dollar was 2001-2008, when the rise in M1 was modest? Since 2008, M1 has risen dramatically with the dollar holding it's value quite well.
I'd hate to jump to conclusions but this sort of indicates that your theory has some holes.
Your "gubmint" provided charts don't address the MATHEMATICS of the impossibility of America paying off its debts while vacuuming up increasing amounts of NEW debt along the way.
So I'll ask you this instead:
Can you please provide a modern example of America paying of her debts while issuing massive amounts of new debt?
Managing interest payments during a historic period of low rates doesn't count as paying of debt or even fiscal prudence (unless you are a "progressive", of course).
Your "gubmint" provided charts don't address the MATHEMATICS of the impossibility of America paying off its debts while vacuuming up increasing amounts of NEW debt along the way.
So I'll ask you this instead:
Can you please provide a modern example of America paying of (sic) her debts while issuing massive amounts of new debt?
Managing interest payments during a historic period of low rates doesn't count as paying of debt or even fiscal prudence (unless you are a "progressive", of course).
You're not getting it. Reducing deficits/debt now, a time of slow recovery, is counter-productive. Borrowing at near 0% real interest rates, to cover government expenditures, is absolutely the proper policy now.
You want a modern example of America paying off debts while issuing massive amounts of new debt? I'm not even sure what that means. If the government is paying down debt, it need not issue more; it just pays off expiring notes.
But what I sense you are driving at is that it is impossible. The fact is that it is possible. World War II debt was much bigger compared to the economy than our debt. A combination of higher taxes and economic growth made that debt, as a p% of GDP, insignificant. During the Clinton Era, the government ran surpluses. The Congressional Budget Office (CBO) projected in 2001 that the federal government would erase its entire debt in 2006 and be $2.3 trillion in the black by 2011 – a $14 trillion difference from today’s reality. The Bush's tax-cuts and other tax-cuts were the primary factors, followed by the economy and the wars prevented that projection from happening. This chart from the Pew Research Center (pdf) gives more detail:
You're not getting it. Reducing deficits/debt now, a time of slow recovery, is counter-productive. Borrowing at near 0% real interest rates, to cover government expenditures, is absolutely the proper policy now.
You want a modern example of America paying off debts while issuing massive amounts of new debt? I'm not even sure what that means. If the government is paying down debt, it need not issue more; it just pays off expiring notes.
But what I sense you are driving at is that it is impossible. The fact is that it is possible. World War II debt was much bigger compared to the economy than our debt. A combination of higher taxes and economic growth made that debt, as a p% of GDP, insignificant. During the Clinton Era, the government ran surpluses. The Congressional Budget Office (CBO) projected in 2001 that the federal government would erase its entire debt in 2006 and be $2.3 trillion in the black by 2011 – a $14 trillion difference from today’s reality. The Bush's tax-cuts and other tax-cuts were the primary factors, followed by the economy and the wars prevented that projection from happening. This chart from the Pew Research Center (pdf) gives more detail:
Did you know that millions of young men came back to America to enter the workforce after WWII?
Perhaps, maybe, possibly things are a tad bit different now (aging baby boomers, destroyed industrial base, profligate deficit spending) than in 1946?
Have you considered that maybe SPENDING LESS would help our crisis situation?
Government can't create economic expansion...it can only "borrow" from private efforts (taxation).
I am waiting for your explanation of how we can get out from under debt by issuing more debt...
Did you know that millions of young men came back to America to enter the workforce after WWII?
Perhaps, maybe, possibly things are a tad bit different now (aging baby boomers, destroyed industrial base, profligate deficit spending) than in 1946?
Have you considered that maybe SPENDING LESS would help our crisis situation?
Government can't create economic expansion...it can only "borrow" from private efforts (taxation).
I am waiting for your explanation of how we can get out from under debt by issuing more debt...
Let's go way back to freshman economics. GDP = private consumption + gross investment + government spending + (exports − imports.) Note, government spending is part of GDP. That means that Government can create economic expansion. The fact that it has in the past is testimony to that.
When government cuts spending, GDP drops. That's why your recommendation, cut spending, is the exact opposite of what's needed.
You are also grasping at straws with that millions of men entering the workforce after WWII, line. That has nothing to do with consumption.
In 30 years when China needs another freaking earth to support its growth you GD idiots supporting blowing the bank now hoping you'll eventually have enough resources to pay off the debt you've accumulated are going to be marked with the Scarlet Letter banned to the gulags for cheap labor in a futile attempt to pay for your gross incompetence.
No one will be laughing at how silly you look now, they'll be bleeding at the eyes thinking about how stupid you are and how epically you failed at estimating the future of their children.
Maybe as you throw rocks from one side of the gorge to the next then you'll suddenly come to the realization of what an economy of scale means and how grossly incompetent you were.
You have it within your powers to stop the chance of another world war.
You can stop this madness that sets us forth on a path to massive debts.
The stoppage of that debt path is most important because it's one thing to be overtaken as the world superpower and it's another to be overtaken as a world superpower while being beholden through unsustainable debts.
Are you going to let the pendulum swing back or are you going to keep pushing it to as high an elevation as you possibly can?
Let's go way back to freshman economics. GDP = private consumption + gross investment + government spending + (exports − imports.) Note, government spending is part of GDP. That means that Government can create economic expansion. The fact that it has in the past is testimony to that.
When government cuts spending, GDP drops. That's why your recommendation, cut spending, is the exact opposite of what's needed.
You are also grasping at straws with that millions of men entering the workforce after WWII, line. That has nothing to do with consumption.
The government creates nothing (except patents). It can only take money from citizens and REDISTRIBUTE it.
Apple, for example, creates products with private capital. It then sells said products at a profit which builds its capital and the cycle continues.
Apple doesn't need a law forcing you to give it 15% of your private income to build its capital base.
The "expansion" you falsely believe the government is providing is "debt financing". Debt is something that must be paid back. It is a loan.
Why doesn't the government borrow $100 trillion? In your world that would lead to massive "expansion" of the American economy.
20% a year "expansion"? Why not? Just hit a key on the keyboard at the Federal Reserve and wish the "money" into existence!
BTW, if you think millions of young men returning from Europe and the Pacific has "nothing to do with consumption" you may have a screw loose.
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