Why do governments get into debt?

Exactly ,Wall Street wants $85a month at 0% interest rate as the "Free Goddies',a capitalist Welfare State. Enforced by the Capitalist government of the Assassin President Obama.

Indeed, as you say ,Wall Street Bankers and such ,Pay No Taxes,only the riff raff pay taxes.They want the protection of the people's government and $85 Bn a Month ,this Financial elite and its Obama Administration ,needs smacking sensible ,Impeach Obama is the peoples cry .

Democracy intervenes , denouncing its usurpers with impeachment as Indictment!

Criminal Conspiracy between Wall street and Obama ,is an Impeachable offence surely!

Some may say hanging ,but let us be more reasoned ,in the Initial inquiry ,as misunderstandings ,not withstanding Impeachment !


That would be the Apology ,the People may be favourable too, in this crisis of leadership Political .

 

And then that all changes and the treasury of the Nation is Hocked off to Wall street Criminals .And Finance Capital ,pisses industrial Capitals representatives off to. They tell me such.

The social Base for the Politics of Obama are the financial elites of Wall Street, as the Manufacturing "heartland of America " ,well RUSTS ,Literally!

And the number of workers and the Poor who don't like Obama either. That's just the Domestic Crisis systemic of US, lets not go to international Imperialism .See Syria, Afghanistan ,Iraq ,x3,and looking towards Iran ,and Russia.

Lets just say that Al-Qaeda\CIA ,Haliburton ,and Shock and Awe War without End doesn't come cheap, demolition of Nations and Peoples isn't cheap , no one thing about US Imperialism when it destroys nations it does a good Job with no scrimping.

4-6 Trillion for Iraq and Afghanistan alone ,go into Syria and Iran and Triple that 10-15 trillion ,as with all other Imperialist empires ,Wars are the ways they collapse and implode treasury bankrupted ,didn't your History teacher tell you the American century is Over!

Socialist revolution of America, the 3rd Revolution ,Workers Republic of America!

UASR, Union of American Socialist Republics!

 

The USSR would have never allowed themselves to become a debt slave to wealthy capitalist lenders.

Think about where all this compounding interest on the debt is going...

 

If I'm not mistaken, the two major debt holders are the Fed (the left hand lending to the right) and retiree's (not exactly wealthy). China is pretty high on the list - not exactly a Capitalist (it just plays one on TV).

 

The simple answer is governments are run by idiots which their only motivation is election and re-election and those who bring home the most bacon wins the elections. This is exacerbated by idiot voters!

Good luck ever changing this...

 

Politicians trade regulations for "campaign contributions". Not the apple pie and motherhood regulations, but the ones that create defacto monopolies.

Not only Wall street, but any sector of the economy where prices increases far exceed inflation, are getting government protection in trade for part of price increases (wonder why medical care and education have gotten so expensive?)

Politicians in general, left and right.

Are the 99% any better? No, they aren't interested in earning their wealth, they want the rich to share it.

What is their choice? There is only one group trying to cut the size, thus power, the spending, the regulations.

Can you say "wag the dog"?

The percent of the population being supported by government programs is far larger than percent of the population that can't support themselves. You expect those that can, but choose not to, to suddenly become productive members of society?

What is the difference between me paying taxes to support the whining class, and having to employ them in the company I work at?

 

You act as if anyone was in favor of bankers getting money from the government. I don't know of anyone who was.

Second, you moronically say "capitalist welfare". That's an oxymoron. That wet desert, dark daylight, and flying turtle, are all just as brilliant as your Capitalist Welfare. Capitalist doesn't get welfare. The very concept is incompatible with Capitalism. If you get money from the government.......... hello..... it's not capitalism.

Capitalist is a profit and loss, system. Profit encourages risk taking, and loss encourages prudence. Milton Friedman. The moment government taxes one group, and gives money to another group, it's no longer capitalism. Its socialism. Bankers getting money from tax payers, is not capitalism. It's socialism. I'm against that.

In fact most of the people I know who think bankers needed money, were all leftist, who live in the fantasy world where if we didn't have TARP, then the banks would have crashed, and the economy would have imploded, and the world would have ended.

Lastly, of course it's not an impeachable offense. And no, there was nothing criminal about it. If giving money to one group is 'criminal' and 'impeachable', then it should be for any other group. Medicare should be criminal and impeachable too. If taxing one group to give to another is not criminal and impeachable, then bankers are just another group of people.

You can't have it both ways just because you are a leftist. What makes your opinion that 'giving money to group A is criminal! but giving money to group B is wonderful!' right but other opinions wrong? Oh that's right, you are a leftist, and thinking through logic, is just an endless rationalization for whatever you want is good.

No. Sorry. It's either all wrong, and that makes Social Security, Green-power Grants, and Medicare 'criminal and impeachable' or none of them are.

 

First off, they did borrow money from wealthy capitalist leaders. It's a fact.

Now granted, they didn't borrow tons.... but then... they were broke. We're talking about a country where people were starving to death, and Cannibalism became a common problem. People were literally eating each other to survive.

The point being... the Soviet Economy was so shattered, so broke, so messed over that, the honest truth is, the reason they didn't borrow more money from wealthy capitalists is because...... duh... they weren't good for the money. No one would lend to them.

It's kind of like pointing to North Korea, and saying they just won't borrow from wealthy capitalists!

Well duh..... They renegotiated their debts in 1979 (partial default), only to completely default on those debt in 1980, and ironically just recently defaulted on debt to Russia just last year.

Heck yeah they don't have much debt.... whose going to lend money to these people? They don't have debt because they couldn't borrow if they wanted to. No one is going to lend to someone who can't pay back. The USSR couldn't pay anyone back. North Korea can't pay anyone back.

So no one lends to them, and then you want to boldly proclaim that "yeah well they would *never* allow themselves to be slaves to wealthy capitalists!".... dur.... dur ...... ... helps that no wealth capitalist would be stupid enough to lend to them. Tad bit easy to follow that credo huh?

 

Could we get some links on the statement you are saying as they do not bare any relationship with Reality ,The USSR was EMBARGOED from trading with any Nation after the Revolution .Finance or Commodity,we tried to brek that isolation ,we being the International Working Class ,only to be Betrayed time after time by the Stalinist leadership as it strangled and garrotted,communists internationally.

Germany ,1923 turning point ,China 1926 ,the streets of Shanghai ,ran red with our blood,1926 ,British general strike betrayed ,Germany 1933 rise of Hitler without a Shot being fired,1936-38 Fascism victorious in Spanish Civil war ,just to name some defeats and betrayals.

As far as wealth is concerned when the Gold reserve of the USSR was sold off by the Russian Federation it led to a crisis as the Price slumped ,oh and the USSR was one of the top producers of Natural gas and OIL!

The problem wasn't money ,the problem was isolation imposed "COLD WAR' ,by the twin agencies of Counter-Revolution Imperialism and Stalinism .

 

Isn't this hilliarious. Half the time you people accuse trade of being a tool for evil wealthy capitalists to steel the resources of other nations. Now the lack of trade is the tool of evil capitalists destroying the USSR.

How many times have I heard that China is destroying the US through trade. Then lack of trade with Cuba is destroying them. Then trade with Africa is destroying Africa. And now it was the lack of trade with the USSR that destroyed them.

Then you wonder why people come to the conclusion that you live in a mythical world, where no matter what anyone anywhere does, it's all their fault for whatever happens to you. Like some sort of 5 year old in first grade. Nothing is your fault. Nope, always someone else is blame.

Now as to the embargoed... that really doesn't explain very much. The problem was that socialized farms didn't produce very much food, and there were a number of reasons for this. But all those reason boil down to "socialism doesn't work".

Yes, no doubt those short term embargoes prevented the USSR from importing technology and other advanced machinery of the time, but that does nothing to explain why you couldn't feed yourselves. The USSR had extensive trade within the Eastern bloc. And Russia, and many eastern bloc countries have some of the most productive and fertile farming land in all the world today. Yet socialism caused all these lush growing land, to be so inefficient, that people were actually eating each other for food.

I'm sure that the embargo harmed the economy in some minor fashion, but the idea that it the entire USSR with 20 trade partners, can't feed itself because of only the USA and UK, is a joke.

Further, if anyone pushed for isolation, it wasn't the capitalists, it was the USSR itself. Stalin himself, pushed the "socialism in one country" doctrine, which pushed isolation from western markets. Remember, trade was the evil capitalists 'stealing' from the 'working people'.

Lastly, the reason trade in the USSR was so limited, was because the USSR currency, the Ruble, was not convertible under the USSR government. The result was that trade was limited in two ways. One way was bartering. I'll give you a load of Tires, if you give me a load of grain. Of course the obvious problem is that if you can't find someone in the other country that wants a load of tires, then you can't get your grain. This hindered trade. The other way was to get hard currency from exports. So if you wanted to buy from Briton, you had to get British Pounds. In order to do that you had to sell something to someone that had British Pounds, and only then could you use those British Pounds, to buy something from Briton.

In either case, this drastically limited international trade outside the Eastern Bloc countries that would take Rubles. No one else would, because the currency wasn't convertible.

There was yet a third way to conduct trade, and that was to borrow money from western capitalists to buy the products you needed or wanted. Which you deny happened. But all you have to do is punch in USSR Borrows, into google, and you'll find dozens of articles, referring to early USSR, and 70s, and of course the 80s. Here's a link to a 90s article, just before the USSR broke up.
http://articles.chicagotribune.com/...soviet-borrowing-eastern-europe-european-bank
There was talk of imposing limits on how much money banks could lend the USSR. Well obviously that means the USSR was borrowing from them.

Look, I don't really know, or care about all these real or perceived betrayals. And I don't know much of anything about the Russian Federation.

I do know that Russia is one of the most resource rich countries in the world, and yes they did produce tons of oil and gas.

That's *MY* point. Russia, and the other Eastern Bloc countries are massively recourse wealthy. If you people had a capitalist system like ours, you would be a hundred times more wealthy than the USA could ever even hope to become. We simply don't have the resources that you do.

The problem is, your economic "International Working Class" system... sucks. Was that clear enough for you? Your socialist "proletariat" system is *CRAP*. Screw international trade. You people in those countries, should be running rings around the US, in complete isolation. If you built a freaking wall around the entire Eastern Bloc, and blocked out all outside contact, you have enough natural resources, you ought to be able to live like Kings and Queens all by yourselves, without any outside trade whatsoever.

But instead... ya'll broke. Ya'll living like America's poor people. Driving tiny crappy dinky cars, living in dinky little houses. Your middle class, lives half the standard of living of ours. Heck, some of our poor people live better than you "International Working Class" did, and even do to this day.

When you hear of the western countries putting up an embargo, you should be laughing, and ignoring us like we didn't matter. Instead, it's a crisis. Why? Cause your idiotic socialists system makes it so you can't even feed your own freakin people without help. Gorby was meeting with Margret Thatcher once, and asked her how her government is able to feed their people. Thatcher said.... we don't. The market does that. People work, and earn money, and buy their own food. How shocking is that! Free-market Capitalism works.

And look at all the other obvious examples. China has massive natural resources. Yet Hong Kong had, and still has, multiple times the wealth that China has. Hong Kong has what natural resources? Sand? But Hong Kong has a non-socialist, non-'workers class' system of Free-Market Capitalism. So while they have standards of living as high as western countries, with little to no natural resources, China with tons of natural resources, has people living in mud huts, earning less than $2 a day (pre-78 reforms).

Or how about Venezuela, with tons of oil wealth and other resources. Used to lead Latin America, largest most wealthy economy. Envy of South America. Now, after Hugo Chavez and his "Bolivarianism and Socialism of the 21st Century" crap, where is Venezuela today?

http://www.bbc.co.uk/news/world-latin-america-22526622
Food shortage nation wide.
http://www.bbc.co.uk/news/world-latin-america-23970027
Country wide power outages, and broken infrastructure, like of investment.



Note the sign above the mostly empty shelves, which says "Made with Socialism". How fitting and accurate is that. Bare shelves showcasing the results of socialism.

This is your workers paradise.... a living hell.

Yes, go find your excuses, go find your scape goat, blame the embargo did this, and so-and-so did that. But spare the rest of us, ok? We're not being your finger pointing crap. The pattern is far far too common and repeatable, for your blame shifting to be valid.

 

one of the biggest problems with governmants they do not build a savings account for future needs..such as a major disaster or a war..in the us we have laws against that..they must spend every penny that they bring in...

 

I guess the point is that you're not adding any new money to the economy, you're just taking money from the future and moving it to the present, and paying other governments 6% for the privilege.

So what happens when you get to that future date when you have to pay it back? Do you borrow more? When does it end?

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Seems like an easy way to put the necessary taxation off until later, when we have no choice in the matter - but in the present present the public/government with a lot of cash with no strings attached. ie: it's a politically easier way of taxing and spending.

 

The problem I'm addressing here isn't stimulus spending (although that is a problem imo, for principled reasons) - the problem I'm addressing is how you pay for it.

Put the government in a stock trader's shoes. It may very well be worthwhile to invest in APPL, but if you have a large amount of capital (15.8T GDP, but I don't to suggest this is how much you have available, merely that you can increase taxes), it makes no send to use margin lending as a source of capital. Accessing your own funds costs ~$0, accessing borrowed funds costs ~6%.

Of course, the government has no capital of its own, and instead relies on stealing it from others, but that's more efficient than the alternative, so I prefer it.

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The choice isn't between "borrowing to pay for stimulus" and "not spending on stimulus" - there is a third option - to directly tax. I'd ask that you refocus your criticism to this line of inquiry.

 

They get into debt to have the excuse they have to economize. The trick is, that way they can gather all the wealth in their capitalistic system, and reach maximum power. With all that wealth and power they can get control over the entire system and population (e.g by using corruption) They don't care if people hear about corruption or fraud, because if the people hear that and become angry it is in their advantage, because these millions angry people are going to resist that corruption and the economization, and will be organized via the system's biggest organisation called politics.

 

I appreciate your sensibility to margin spending. After the great recession there was no other entity on earth strong enough to restart the economy than the US government. Not to use stimulus would have sent us back to the stone age. So far, even though we have not nearly stimulated enough, it is working. The debt is shrinking, inflation and increased revenue from more jobs will eventually bring it into focus. Direct taxation is not possible with the current Congress, the tea party will primary out any GOP candidate that even suggests it. I personally would be for a flat tax or a national sales tax adjusted yearly to the deficit but realistically this will never happen.

 

I actually don't have too much of a problem with that, provided we have a safe guard. My simple solution would be, they can only borrow during war and an actual emergency, (natural disaster).

But during the years of non-emergency, non-war, they must pay down the debt every single year. If we simply had that rule, we'd have most of these debt paid off by now.

 

In bankruptcy, when, like in Detroit, when you can't kick the can further down the road.

The will play games with interest rates to reduce interest payments (reducing the income of retirees that bought T-Bills because they were safe), and games with taxes, complain about military spending (about 1/5 of the total) and corruption (most likely less than 10%), and do nothing about the major portion, entitlements.

When the crash happens, all those dependent on government money (40+% of the population) will, will be left out in the cold.

Where are we investing money?

Education is far more expensive, and far less effective, than before government "investment".

The roads and bridges are crumbling. Those being converted to toll roads collect money, not for care, but for more income for the general fund.

Like education, medical care is far more expensive since government investment.

The only investments paying off are from regulations that create defacto monopolies, allowing huge executive incomes, which provide huge campaign contributions.

 

debt can be a good thing as it forces us to priortize spending.

 

Regarding debt, IMO it depends on the reason for allowing debt. Let's pretend we have an unemployment problem and the government decides to spend $2 trillion on infrastructure projects. If normally we would have spent this same $2 trillion over a ten year period, and the spending is for tangible and beneficial projects, then go ahead and spend the $2 trillion in a two year time period...however...in the future 10 year period, this $2 trillion needs to be removed from future budgets. So yes we spend $2 trillion using debt but then we offset this by reducing spending over the next 10 years. Our problem is we just keep operating with debt on top of debt which tells me we are probably wasting lots of critical money...inefficient spending. If we're not going to reduce spending in the future to offset debt spending today, then we need to raise taxes or accept more and more debt which future generations will be burdened to pay.

In our personal lives, how long can we get away with spending 25% more than we earn? If we could do this over a decade, just imagine how much debt interest we would be paying? We would be using our credit cards to make loan and interest payments and credit card payments. What happens when our credit cards are maxed out? During the decade we might cut back on some things but will always find a reason for other things to continue spending 25% more than we earn. If this scenario would have horrific consequences in our personal lives, then why do we assume there will not be horrific consequences when government incurs more and more debt...

 

Georgia owed money to Russia, when Russia invaded, and as far as I can tell the same was true of Iraq and Kuwait when Saddam invaded. In fact, most of the countries that attack each other, owe one another something.

Further, whatever debt would be offset by other factors. For example, say Iraq owed us $1 Trillion. If we had intended to, we could have simply confiscated the Oil Field in Iraq, and by operating them ourselves, and selling the oil ourselves, we could have collected the entire $1 Trillion back. Equally if Iraq could have attacked us, perhaps they could have forced us to forgive the debt. (in my mythical example of course, given Iraq didn't have that ability).

Equally, China could attack us, and if successful, confiscated enough wealth from US to repay the debt we owe them. Equally we may want to attack China to force them to forgive our debts.

Or what is even more likely: Remember China doesn't have some invisible IOU. They own US government bonds. If China wished to go to war with us, far from those bond being a deterrent... I would sell those bonds on the open market, and use the money they sold for, to fund our war machine. At the exact same time, those bonds would flood the market, lowering the value of bonds. That lowering of value would result in the US government not being able to raise the money from their bond auctions, thus de-funding our war machine.

I have always been dubious of these crazy claims that debt is stabilizing. It certainly hasn't been stabilizing in the past, and logically I see no reason it would be. I'm not sure where this idea comes from.

In fact, it would seem to be de-stabilizing since an enemy would considered the economic health of the government they intended to fight. A healthy government with plenty of income, and low debt service, would seem to be far more dangerous, than a government that owes more money than it's entire economy produces in a year, and can barely handle the debt service it has.

As far as jobs and trade.... yeah in the short term it stimulates trade. Just like in the short term, using credit cards can drastically increase your standard of living. But eventually you end up bankrupt. In governmental terms, eventually you end up jacking up taxes.

Remember, for every single dollar used to create a wage, that comes from government borrowing... a dollar plus interest plus government overhead, has to be confiscated from someone else's wage.

You create one $30,000 government bureaucrat job, means someone else in our economy has to lose a $40,000 or $50,000 job, because you have confiscate the $30,000, plus the interest on the $30,000, plus pay all the politicians, and IRS agents, and Treasury People, and on and on and on.

 

Building infrastructure is the one sure thing that pays back investment through economic growth. It has been estimated that the US interstate highway system has generated a 500% return in Federal taxes over 50 years due to economic expansion along the highways. The infrastructure built by government spending during the great depression of the 1930s has been estimated to have returned over 1,000% of its cost in Federal taxes alone.

The mantra that all government spending is detrimental is just plain wrong. There are times and places where only the government has the capability and will to invest, especially large long term investments without obvious prospects of repayment, like the interstate highway system.

 

I would love to fund infrastructure, education and defund the banks. If only the GOP would allow it.

 

As in every enterprise, there are assumptions made to allow for their function. One of the assumptions in capitalism is that nations that trade together generally don't want to go to war with them and the bonds that nations like China buy would be better off used within the system for profit. Creating a 30K job does not mean someone else has to lose money to pay your wages, jobs are not finite and economies expand. If this seems like a giant ponzi scheme, perhaps you are right, but it is also how capitalism works and always has. I am sorry macro economics confuses you, it is a class that should be taught in high school.

 

You're not taking people's wages to support government; you are paying applicable taxation to the government. The ONLY way people can pay taxation is if they are earning something which is taxable. As long as we are earning we should not mind paying our share of taxes.

The federal government has become bloated with government employees. IMO most government spending should be directly to the private sector in procuring materials and buying services and contracting for various projects while minimizing the quantity of government employees. But we have greatly increased the military head count and created Homeland Security both of which are a lot of direct government employees.

Also because of the size/scope of the federal government today, it is simply too large to be efficiently managed. I would prefer as much government as possible be pushed down to the City and State levels where management can be more efficient...