How do you propose we pay off the 18 trillion dollar debt cloud hanging over the US?

Great stuff! The thing I find most amusing about this, is if you look at the data from the past 100 years... we are not asking the government to do anything they haven't been doing for the last 100 years. Relatively we have done far more in the past in terms of increasing our spending/debt than we have done in the past 20 years. And it's crazy how conservatives have been able to justify war spending as different than any other spending. We can increase our spending on our infrastructure and education just as easily as we can pay for a world war. And the benefits would be ever greater than blowing up other countries. It's amazing that they have been able to convince themselves that the benefit from putting millions of Americans to work in WWII is economically different than putting them to work for other reasons. Crazy when you think about it... it's not even logical. Our country would be amazing if we unleashed our ability to produce and innovate. Instead we are stuck with worthless politicians and failed ideologies that are going to keep this country trapped in mediocrity for decades.

 

You also touched on one of the biggest points. People think the Government should be held to the same standards as themselves. It's very difficult to get the light bulb to go off to understand the difference. It took me a while also. I thought these people were nutters, because it always seemed like common knowledge that the government was dependent on taxes and china or whatever to be able to spend money. But when you actually learn how the system works, we are actually the ones dependent on the government to spend.

I always love this quote... the only way we can fund the Government is if they fund us first.

And all of this is backed up with data. It's not some new theory. It's just an understanding of the way our economy has worked for the past century. People have been complaining about debt, deficits, and spending for the past century and they are always wrong. They just simply change the numbers each year. In 15 years, $30 trillion will be the new Apocalypse #. People will forget how wrong they were when it was $16 trillion. It just makes me laugh how they literally have no clue what they are talking about yet are so confident in it, simply because they think of their own personal finance preferences. My favorite is when they try to equate the government to giving their children money. It's beyond embarrassing.

 

I find your lack of faith....disturbing.

Isn't this the argument and isn't this valid? The state has the power to tax and as long as there are goods and services to back it up there will be no inflation, as there will be no bad money to chase out the good, yes?

There is a limit, you can't exceed the value of your asset base but we are a VERY long way from that.

 

[MENTION=57189]akphidelt2007[/MENTION], you're not saying anything that everyone doesn't already know. Of course the government can make as many FRNs as it chooses. It owns the printing presses. So what?

 

Taxing doesn't have anything to do with inflation, which is a function of the growth of the effective money supply.

 

Finally, and in a round about way, you are admitting I'm right! Sheesh, it took to weeks and your mea culpa is a bit convoluted , but finally here we are!

 

The argument that akphidelt2007 is making is that there are no limits.

 

Your reading comprehension is really bad. You haven't been right about anything. Saying Argentina ran out of money is incorrect. They chose to stop spending money. You're just trolling now.

 

Now that's funny! I think we know who the real troll is.

 

I think you'd be surprised. Pretty much, people that don't understand the economy would support you. You wouldn't get very many educated economists calling me a troll for what I've been teaching you.

The fact you still have trouble comprehending this is not surprising, but still embarrassing.

 

Through hyperinflation and bankruptcy. Then you start all over again with a new currency.

 

Well I welcome educated economists making your argument.

 

Google sites that end in ".edu". You'll find plenty. It's a complicated subject, maybe you should concern yourself more with Donald Trump and Rosie O'Donnell. That's more suited towards you.

 

Just as I thought. You made an unsupported statement. Ah, true to form!

 

We're done talking about economics. You aren't even making any points, just going in circles. Let me know when you want to be educated and ask me a question. I will give you the answer. But if you keep saying nothing, I will keep replying in ways you can understand.

 

I took economics as my major(Bachelor's in Business Administration) and I had a 3.8 GPA. I can vouch from everything I read(and applied) that Aki is correct regarding the current US Economic System and how it works. The important thing economically isn't debt, or even a balance sheet but what's most important is US Purchasing power or a simpler way to state it: The ability for money to move.

A very fundamental(and simple) concept of economics is that when money circulates, the economy grows and when money is stagnant(for whatever reasons) the economy slows down. The very present economy is in fact a key demonstrator for future teachers to show new students what happens when the economy becomes stagnant. If the States had the same printing power that the Federal Government has, perhaps an argument could be made for a decentralized economy. But obviously, the States do not have that power. So in fact, the Federal Government is a key proponent to the US Economy. It fuels the engine to making the economy move.

Rejecting Government Spending, is like rejecting gas for your car to run. Maybe this analogy might sink in: As Conservatives point out to Liberals that Hybrids and other non-gas forms of transportation simply aren't viable, or up to par there is also no more effective way to stimulate the economy, then Government Spending.

So, what impact do the Individual States have? Plenty. It's a team effort. While Government supplies the US with money, the US in turn actively participates in the economy, to generate net value. Very simply, the more productive our economy, the more we can be supplied with and the more that's generated as a result. In short, what backs the "full faith and credit" of the US, is its domestic engine.

Let's revisit the Shutdown for a moment, in which it was pointed out correctly we can never run out of money(Since, you know we can print it lol.). That's true. But we can voluntarily decide not to be productive. THAT lack of activity, not so much the amount printed on a balance sheet, is what caused the Shutdown and the loss of millions.

What's the best way I can prove that the increase in the US Balance Sheet does not reflect upon the US's ability to maintain that full faith and credit? The Debt-GDP Ratio of the US Historically:

Notice how the graph is relatively flat until 2010.

That means it includes the Bush wars, and the Weapons Program under Reagan. So, why was the graph flat even though the US definitely continued to spend? Because our productivity(GDP) was always more than our debt. So, what has changed? As I said before: Production. I said we're operating at about 20% of our capacity.

In order to make this distinction, I have to be clear: There's two types of production. There's the production of the Worker Class and there's the Production of the Entrepreneur Class. Now, what do you think is superior? To be even more specific: There are those whose productive aims are for other people, and those who are self-productive.

Clearly, being self-productive is more valuable than working your ass off for another person. You get to earn more, and keep more of your earnings. It is therefore conceivable that we want a much larger Entreprenuial Force than a Working Force. Unfortunately, the shift occurred in the opposite direction: There's WAY too many Workers as opposed to Entrepreneurs. The ratio is out of balance at 80% Workers/20% Entrepreneurs.

This compounds the lack of growing jobs, which in turn means a much lower GDP then in recent decades. And when you consider the amount of Fixed Spending for US Citizens individually, everything adds up to what we know today: A lack of purchasing power on the individual level. The more workers there are, the more money's divided, leaving smaller portions.

In short, the US faces a major macroeconomic problem(I didn't even cover the dollars going overseas, etc. Derivatives and other forms of black holes.). A correction would be going from 20/80 to 40/60. If we doubled the amount of Enterpreneurs, that would increase earning power tremendously. Not only in terms of being self-productive, but there's less of a clog so now the existing work force can get those long overdue things known as a raise or a promotion! **Shock**. But the domino effect isn't done yet: There's less workers, which means there's more of a demand for new workers.

Not only in existing jobs, but NEW jobs. And remember, we doubled the amount of Entrepeneurs, which means we doubled the amount of openings in the US. I believe we can create as many as 10's of millions of jobs, if we as an economy moved to unclog the economy. And in turn, we won't ever have to worry about meeting our obligations. They will easily be met with the new storm of demand.

Medicaid/Medicare face the same problem. Even worse since those programs are inherently unproductive(IE: Your spending money to consume, not invest. Dollars aren't generated by those programs.) They can only remain a part of a well-oiled picture for the US if everything else falls into place.

 

Good stuff, problem is conservatives don't want to believe what we are saying. Because to accept it, would be to give power and credit to the government. They want to believe that the government's only way of functioning is if the private sector allows them to and funds them. They will never accept the fact that the government has to fund them before they can fund the government. It's just something they are unwilling to do, even if deep down inside they might understand what we are talking about.

As an objective person, I really don't care. I just like to know how things work and why they work the way they do. When you understand how the monetary system works and how it is really a separate function to the economy and works in a different way than households or businesses, it is a lot less scary. It makes you realize that we should have much more debt right now than we do as we should be investing far more in to the private sector, middle class, and infrastructure.

They will always refuse to believe it though because the Government can perform no beneficial function in their minds (other than military). It is a completely religious like ideology.

 

Putting it as basically simple as I can: Local/State Governments have to "balance their budgets"(and most of them still fail to do this lol) because they can't print money. On the flipside of that, Local/State Governments have fixed costs since they can't appropriate money out of nowhere. This means with enough stimulus, we could effectively fund the entirety of the US Economy, as long as costs are in proportion to the State's Income.

Done this way, I could blow everyone's minds and say we don't need taxation, certainly not income tax. Taxes are a way to generate revenue for the Local/State Governments due to the aforementioned lack of printing ability. If the Government exercised its full power and responsibility as basically the creditor of the US Economy, everyone could keep their earnings at close to, if not 100%

But what about prior collapses? One might ask. Such as the 1929 world collapse in America(and Germany). Well, what ended up happening is that the money was tied to something tangible. And when we look at the economy this way, we realize what a MAJOR weakness it is and how we should never return to the Gold Standard. Because there just isn't enough Gold in circulation for the massive amount of dollars it would take to fund the economy.

If there was a drop-off in value in 1929, I can assure everyone there's a drop-off in value today. And that, more than anything is what we have to watch out for: Does the world hold value in our currency?(Which at this point, can be translated to mean "Value in US Production"). Well, this is where those ratings come into play.

At first, I thought Moody's was rating certain economic variables, but now I know differently. What they're really rating is the economic stability of the US.. The more stabilized the economy, the more productive our economy, the higher our rating will be. But the more unstable and less productive the economy, the lower our rating will be.

A government retraction doesn't make sense for us right now, at about 20% of our capacity. Retraction wouldn't help the economy or pay off our debts, but would strangle the moose around our necks. Why should we lower our capacity anymore then it already is? Balancing the budget, in a real meaningful sense has always been done during times of massive domestic growth.

Retraction, in short might make it "look" like we're headed towards balance, but we're really not. What we're really doing is sputtering along, while the local economies which make the markets boom will go bust. Heading towards balance, means actually increasing the GDP, ideally back to the levels where it was DOUBLE our debt. That will mean spending, and a lot of it.

Aki's right.

 

This is one of my favorite tools and it's simplistic enough to understand a very complex subject.

http://econviz.org/macroeconomic-balance-sheet-visualizer/

But what's really a defining point of understanding is looking at the assets and liabilities of the country and what adds up to them. And if you follow the money, the private sectors financial equity is a combination of bank liabilities and government liabilities. Aka debt.

So just one of the most logical conclusions you can get out of this is that if the government runs a surplus the private sector has to reduce its equity. It's the only mathematical possibility.

And then, if you look at what happens when banks lend, it does nothing to the net financial assets of the country. The only way the country can have net financial assets is if the government is in debt. That makes it pretty obvious why the past 75 years or so 95% of the years the government was in deficit. Once that gets understood, it's just simple math as to why the debt needs to grow and why it is important for the government to continue running deficits. If the government balanced its budget, the private sector would be solely dependent on bank debt. Which is a wash in terms of being net financial assets.

 

Conservatives don't buy your Keynesian, krugman, fascist indoctrination not because we are ignorant of it, but because we have observed NUMEROUS FATAL flaws in it.


Spending is not how you measure real economic growth, numeric price inflation is not economic growth.

Your inductive algorithms are both presumptuous and flawed.

Its obvious that you only favor a keynsian monetary system because it accelerates government spending, exactly what "liberals" want, yet at what cost? You're so focused on the money the government gets to spend and are completely ignoring that it empowers a class of fascistic banking oligarchs who now run our country.

 

Yes this flawed scam of a system forces us all to rum perpetual defecits or else experience economic collapse.

The system has been set up by criminal, fraudulent banking terrorists!

They have the entire country under debt bondage and have set up a system where stopping or slowing debt aquisition collapses the economy. It is financial terrorism! They are using weapons of mass financial destruction, and threatening economic collapse if we stop borrowing.

They use the threat of economic collapse in order to yoke us slk with infinite, exponential, perpetual debt beholden to them, the bankers, the true rulers of this country.

the liberals have sold out to them because they foolishly are attracted to the prospect of increased government debt spending.

A healthy economy is built on s foundation of CAPITAL not DEBT! debt is not a foundation at all, its like planning to build a house in mid air without any supports.

 

It's because conservatives don't understand it like most things. It actually has nothing to do with conservatism or liberalism. You can still be a conservative and understand how effective the system we have in place is. Just have to drop your failed ideologies first, which I understand will be next to impossible. Any system you have in place and every system that has been in place has the same issues of introducing enough money to the economy for it to continue to grow.

 

Not really, banks don't really care if the government pays them the principle on their debt. It would just disappear off their balance sheet. If you understood the system, it is not nearly as scary as you are making it out to be. One reason why it's lasted over a century and every developed country in the world uses it.

You call it debt, I call it investment.

 

I've been asking questions for what, 10 days? And yet gibberish is what you provide. Or you say to Google it. If you had an answer, you would have provided it by now. You don't have answers, just nonsense.

 

I've answered every question you have asked. What is your question that you feel you haven't gotten an answer for?