Myth:*national debt is a burden that will ruin our children’s futures

itfitzme

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Jan 29, 2012
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Macro econ and the money supply are not "intuitive".

The Biggest Myths in Economics | PRAGMATIC CAPITALISM

The national debt is often portrayed as something that must be “paid back”. *As if we are all born with a bill attached to our feet that we have to pay back to the government over the course of our lives. *Of course, that’s not true at all. *In fact, the national debt has been expanding since the dawn of the USA and has grown as the needs of US citizens have expanded over time. *There’s really no such thing as “paying back” the national debt unless you think the government should be entirely eliminated (which I think most of us would agree is a pretty unrealistic view of the world).

This doesn’t mean the national debt is all good. *The US government could very well spend money inefficiently or misallocate resources in a way that could lead to high inflation and result in lower living standards. *But the government doesn’t necessarily reduce our children’s living standards by issuing debt. *In fact, the national debt is also a big chunk of the private sector’s savings so these assets are, in a big way, a private sector benefit. *The government’s spending policies could reduce future living standards, but we have to be careful about how broadly we paint with this brush. *All government spending isn’t necessarily bad just like all private sector spending isn’t necessarily good. *And at a macro level debt doesn’t get “paid back”. *In a credit based monetary system debt is likely to expand and contract, but generally expand as the economy expands and balance sheets grow.

See the following pieces for more:

The US Government is not ?$16 trillion in the hole? | PRAGMATIC CAPITALISM

IS SOCIAL SECURITY A PONZI SCHEME? | PRAGMATIC CAPITALISM

The Debt Bad Guys | PRAGMATIC CAPITALISM
 
That's what I've been trying to articulate.

Also, bond sales serve as an interest rate management tool, not a financing tool.
 
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It is sad to see how so many people, unable to articulate thoughts of their own, simply resort to posting links to ideological websites. According to the "rationale" of these sites, we should simply guarantee everyone an annual income of $100k, regardless of how much money we would have to borrow to do that. On second thought, why not make it $1 million?
 
The national debt is often portrayed as something that must be “paid back”.

ok then I'm going to deduct from my taxes the amount used to pay back the national debt because an idiot liberal has just assured me that it doesn't have to be paid back!!
 
The national debt is often portrayed as something that must be “paid back”.

ok then I'm going to deduct from my taxes the amount used to pay back the national debt because an idiot liberal has just assured me that it doesn't have to be paid back!!

Your tax $$$ is destroyed, it doesn't really go anywhere. That's not how functional finance operates.

if it doesn't go anywhere I wont bother sending it to IRS then!!
 
Macro econ and the money supply are not "intuitive".

The Biggest Myths in Economics | PRAGMATIC CAPITALISM

The national debt is often portrayed as something that must be “paid back”. *As if we are all born with a bill attached to our feet that we have to pay back to the government over the course of our lives. *Of course, that’s not true at all. *In fact, the national debt has been expanding since the dawn of the USA and has grown as the needs of US citizens have expanded over time. *There’s really no such thing as “paying back” the national debt unless you think the government should be entirely eliminated (which I think most of us would agree is a pretty unrealistic view of the world).

This doesn’t mean the national debt is all good. *The US government could very well spend money inefficiently or misallocate resources in a way that could lead to high inflation and result in lower living standards. *But the government doesn’t necessarily reduce our children’s living standards by issuing debt. *In fact, the national debt is also a big chunk of the private sector’s savings so these assets are, in a big way, a private sector benefit. *The government’s spending policies could reduce future living standards, but we have to be careful about how broadly we paint with this brush. *All government spending isn’t necessarily bad just like all private sector spending isn’t necessarily good. *And at a macro level debt doesn’t get “paid back”. *In a credit based monetary system debt is likely to expand and contract, but generally expand as the economy expands and balance sheets grow.

See the following pieces for more:

The US Government is not ?$16 trillion in the hole? | PRAGMATIC CAPITALISM

IS SOCIAL SECURITY A PONZI SCHEME? | PRAGMATIC CAPITALISM

The Debt Bad Guys | PRAGMATIC CAPITALISM

In a related story, wolverines make good house pets, especially in homes with small children.
 
Macro econ and the money supply are not "intuitive".

The Biggest Myths in Economics | PRAGMATIC CAPITALISM

The national debt is often portrayed as something that must be “paid back”. *As if we are all born with a bill attached to our feet that we have to pay back to the government over the course of our lives. *Of course, that’s not true at all. *In fact, the national debt has been expanding since the dawn of the USA and has grown as the needs of US citizens have expanded over time. *There’s really no such thing as “paying back” the national debt unless you think the government should be entirely eliminated (which I think most of us would agree is a pretty unrealistic view of the world).

This doesn’t mean the national debt is all good. *The US government could very well spend money inefficiently or misallocate resources in a way that could lead to high inflation and result in lower living standards. *But the government doesn’t necessarily reduce our children’s living standards by issuing debt. *In fact, the national debt is also a big chunk of the private sector’s savings so these assets are, in a big way, a private sector benefit. *The government’s spending policies could reduce future living standards, but we have to be careful about how broadly we paint with this brush. *All government spending isn’t necessarily bad just like all private sector spending isn’t necessarily good. *And at a macro level debt doesn’t get “paid back”. *In a credit based monetary system debt is likely to expand and contract, but generally expand as the economy expands and balance sheets grow.

See the following pieces for more:

The US Government is not ?$16 trillion in the hole? | PRAGMATIC CAPITALISM

IS SOCIAL SECURITY A PONZI SCHEME? | PRAGMATIC CAPITALISM

The Debt Bad Guys | PRAGMATIC CAPITALISM

^ How you know the end is near.

It's like the Finance Minister coming out on National TV and swearing on everything he holds sacred they do NOT intend to devalue the currency.
 
It is sad to see how so many people, unable to articulate thoughts of their own, simply resort to posting links to ideological websites. According to the "rationale" of these sites, we should simply guarantee everyone an annual income of $100k, regardless of how much money we would have to borrow to do that. On second thought, why not make it $1 million?

Is there a purpose that drives you to set up straw man arguments? I have never heard anyone articulate the position you are attacking. It seems to exist entirely to make you feel good, a form of intellectual masturbation.
 
ok then I'm going to deduct from my taxes the amount used to pay back the national debt because an idiot liberal has just assured me that it doesn't have to be paid back!!

Your tax $$$ is destroyed, it doesn't really go anywhere. That's not how functional finance operates.

if it doesn't go anywhere I wont bother sending it to IRS then!!

The fact you have to pay your taxes in dollars is one of the reasons it has value. This is why those worthless pieces of paper are in demand. It guarantees all assets, prices and debts are denominated in dollars.
 
Your tax $$$ is destroyed, it doesn't really go anywhere. That's not how functional finance operates.

if it doesn't go anywhere I wont bother sending it to IRS then!!

The fact you have to pay your taxes in dollars is one of the reasons it has value. This is why those worthless pieces of paper are in demand. It guarantees all assets, prices and debts are denominated in dollars.

You mean legal tender laws are what give the dollar value? Wrong. That's shows an utterly shallow understanding of money. The government of Germany had such laws in 1923 when the Deutschemark became virtually worthless and businesses would pay their employees with 100 trillion Mark notes. Why didn't it work then?
 
The national debt is often portrayed as something that must be “paid back”.

ok then I'm going to deduct from my taxes the amount used to pay back the national debt because an idiot liberal has just assured me that it doesn't have to be paid back!!

Your tax $$$ is destroyed, it doesn't really go anywhere. That's not how functional finance operates.

Then why don't we finance the entire government simply by printing federal reserve notes?
 
Macro econ and the money supply are not "intuitive".

The Biggest Myths in Economics | PRAGMATIC CAPITALISM

The national debt is often portrayed as something that must be “paid back”. *As if we are all born with a bill attached to our feet that we have to pay back to the government over the course of our lives. *Of course, that’s not true at all. *In fact, the national debt has been expanding since the dawn of the USA and has grown as the needs of US citizens have expanded over time. *There’s really no such thing as “paying back” the national debt unless you think the government should be entirely eliminated (which I think most of us would agree is a pretty unrealistic view of the world).

This doesn’t mean the national debt is all good. *The US government could very well spend money inefficiently or misallocate resources in a way that could lead to high inflation and result in lower living standards. *But the government doesn’t necessarily reduce our children’s living standards by issuing debt. *In fact, the national debt is also a big chunk of the private sector’s savings so these assets are, in a big way, a private sector benefit. *The government’s spending policies could reduce future living standards, but we have to be careful about how broadly we paint with this brush. *All government spending isn’t necessarily bad just like all private sector spending isn’t necessarily good. *And at a macro level debt doesn’t get “paid back”. *In a credit based monetary system debt is likely to expand and contract, but generally expand as the economy expands and balance sheets grow.

See the following pieces for more:

The US Government is not ?$16 trillion in the hole? | PRAGMATIC CAPITALISM

IS SOCIAL SECURITY A PONZI SCHEME? | PRAGMATIC CAPITALISM

The Debt Bad Guys | PRAGMATIC CAPITALISM







I love these morons. A simple review of history exposes their philosophy for the BS it is.... Let's take a look at Spain. One of the wealthiest countries the world has ever known spent itself into debt and dissipation...

And they're doing the same thing now. I hope they're prepared because they're going to be getting mighty hungry in the not to distant future.


'The Spanish tax burden was very unevenly distributed: it fell more on the poor than the rich, heavily on the agricultural sector, and on Castile far more than Aragon or the Basque country. But the Spanish government's expenditure continued to climb: - in the first twelve years of Philip III's reign, he spent over 40 million ducats on the Low Countries' wars alone (a ducat is a small gold coin weighing about 3.5 grams.)

To cover the shortfall, the Spanish government both borrowed money - by the issue of juros (interest-bearing state bonds) - and assigned the revenues from future years to the bankers if they would pay the defense contracts for the present year.
By 1607 the government had a debt of almost 23 million ducats and had assigned away all its revenue for four years ahead.
By 1644 the crown's income was pledged to 1648; and by 1664 the crown owed more than 21 million ducats.

Lacking any real money the government periodically had to pay the interest owed on the juros by issuing more juros - but people were not overly keen to buy these new juros since they were none too confident that the interest would be paid.


Another extreme expedient was the issue of "vellón" coins - vellón was worthless copper, sometimes with a tiny amount of silver added. The government forced its employees and creditors to accept this token currency, and the issues of 1636, 1641, and 1654 each made about five million ducats profit for the crown. But the debased coins simply produced inflation and confusion in the economy.

With Spanish finances in so parlous a state, a misfortune such as Piet Heyn's seizure of the Spanish treasure fleet in 1628 became a disaster. The only beneficiaries from the weakness of Spanish government finances were Spanish noblemen, from whom the crown borrowed so heavily that they held an effective stranglehold on the monarchy."


Spain in decline
 
Count on four facts, one way or another the national debt will be forced to be paid back, ponzi schemes always implode, deficit spending has a cost, and inflation will wipe out what remains of private sector wealth. All in the name of irresponsible incumbent politicians that don't have the courage to make tough choices. So where does all the tax revenue to feed the beast come from after everyone is equal, that is have nothing?
 
It is sad to see how so many people, unable to articulate thoughts of their own, simply resort to posting links to ideological websites. According to the "rationale" of these sites, we should simply guarantee everyone an annual income of $100k, regardless of how much money we would have to borrow to do that. On second thought, why not make it $1 million?

You're confusing yourself with a macro economy. I said it wasn't intuitive. Intution is based on what your use to. Bwhat your use to is home economics. That is a far cry fro macro econ. You should worry about it. You'll never understand macro econ and the money supply, you are just not capable.
 
ok then I'm going to deduct from my taxes the amount used to pay back the national debt because an idiot liberal has just assured me that it doesn't have to be paid back!!

Your tax $$$ is destroyed, it doesn't really go anywhere. That's not how functional finance operates.

if it doesn't go anywhere I wont bother sending it to IRS then!!

Where in there does it say anything about you not paying taxes?

Or did you just make that up yourself?


Oh, I'm still waiting for you to explain what a Carnot oligopoly of n firms is. You should stick with one thing at a time. You still haven't finished your econ 101 yet
 
Macro econ and the money supply are not "intuitive".

The Biggest Myths in Economics | PRAGMATIC CAPITALISM

The national debt is often portrayed as something that must be “paid back”. *As if we are all born with a bill attached to our feet that we have to pay back to the government over the course of our lives. *Of course, that’s not true at all. *In fact, the national debt has been expanding since the dawn of the USA and has grown as the needs of US citizens have expanded over time. *There’s really no such thing as “paying back” the national debt unless you think the government should be entirely eliminated (which I think most of us would agree is a pretty unrealistic view of the world).

This doesn’t mean the national debt is all good. *The US government could very well spend money inefficiently or misallocate resources in a way that could lead to high inflation and result in lower living standards. *But the government doesn’t necessarily reduce our children’s living standards by issuing debt. *In fact, the national debt is also a big chunk of the private sector’s savings so these assets are, in a big way, a private sector benefit. *The government’s spending policies could reduce future living standards, but we have to be careful about how broadly we paint with this brush. *All government spending isn’t necessarily bad just like all private sector spending isn’t necessarily good. *And at a macro level debt doesn’t get “paid back”. *In a credit based monetary system debt is likely to expand and contract, but generally expand as the economy expands and balance sheets grow.

See the following pieces for more:

The US Government is not ?$16 trillion in the hole? | PRAGMATIC CAPITALISM

IS SOCIAL SECURITY A PONZI SCHEME? | PRAGMATIC CAPITALISM

The Debt Bad Guys | PRAGMATIC CAPITALISM







I love these morons. A simple review of history exposes their philosophy for the BS it is.... Let's take a look at Spain. One of the wealthiest countries the world has ever known spent itself into debt and dissipation...

And they're doing the same thing now. I hope they're prepared because they're going to be getting mighty hungry in the not to distant future.


'The Spanish tax burden was very unevenly distributed: it fell more on the poor than the rich, heavily on the agricultural sector, and on Castile far more than Aragon or the Basque country. But the Spanish government's expenditure continued to climb: - in the first twelve years of Philip III's reign, he spent over 40 million ducats on the Low Countries' wars alone (a ducat is a small gold coin weighing about 3.5 grams.)

To cover the shortfall, the Spanish government both borrowed money - by the issue of juros (interest-bearing state bonds) - and assigned the revenues from future years to the bankers if they would pay the defense contracts for the present year.
By 1607 the government had a debt of almost 23 million ducats and had assigned away all its revenue for four years ahead.
By 1644 the crown's income was pledged to 1648; and by 1664 the crown owed more than 21 million ducats.

Lacking any real money the government periodically had to pay the interest owed on the juros by issuing more juros - but people were not overly keen to buy these new juros since they were none too confident that the interest would be paid.


Another extreme expedient was the issue of "vellón" coins - vellón was worthless copper, sometimes with a tiny amount of silver added. The government forced its employees and creditors to accept this token currency, and the issues of 1636, 1641, and 1654 each made about five million ducats profit for the crown. But the debased coins simply produced inflation and confusion in the economy.

With Spanish finances in so parlous a state, a misfortune such as Piet Heyn's seizure of the Spanish treasure fleet in 1628 became a disaster. The only beneficiaries from the weakness of Spanish government finances were Spanish noblemen, from whom the crown borrowed so heavily that they held an effective stranglehold on the monarchy."


Spain in decline

And none of that has anything to do with the op. Come back when you've figured out why.
 
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I love these morons. A simple review of history exposes their philosophy for the BS it is.... Let's take a look at Spain. One of the wealthiest countries the world has ever known spent itself into debt and dissipation...

And they're doing the same thing now. I hope they're prepared because they're going to be getting mighty hungry in the not to distant future.


'The Spanish tax burden was very unevenly distributed: it fell more on the poor than the rich, heavily on the agricultural sector, and on Castile far more than Aragon or the Basque country. But the Spanish government's expenditure continued to climb: - in the first twelve years of Philip III's reign, he spent over 40 million ducats on the Low Countries' wars alone (a ducat is a small gold coin weighing about 3.5 grams.)

To cover the shortfall, the Spanish government both borrowed money - by the issue of juros (interest-bearing state bonds) - and assigned the revenues from future years to the bankers if they would pay the defense contracts for the present year.
By 1607 the government had a debt of almost 23 million ducats and had assigned away all its revenue for four years ahead.
By 1644 the crown's income was pledged to 1648; and by 1664 the crown owed more than 21 million ducats.

Lacking any real money the government periodically had to pay the interest owed on the juros by issuing more juros - but people were not overly keen to buy these new juros since they were none too confident that the interest would be paid.


Another extreme expedient was the issue of "vellón" coins - vellón was worthless copper, sometimes with a tiny amount of silver added. The government forced its employees and creditors to accept this token currency, and the issues of 1636, 1641, and 1654 each made about five million ducats profit for the crown. But the debased coins simply produced inflation and confusion in the economy.

With Spanish finances in so parlous a state, a misfortune such as Piet Heyn's seizure of the Spanish treasure fleet in 1628 became a disaster. The only beneficiaries from the weakness of Spanish government finances were Spanish noblemen, from whom the crown borrowed so heavily that they held an effective stranglehold on the monarchy."


Spain in decline

And none of that has anything to do with the op. Come back when you've figured out why.






Bull crap. It has EVERYTHING to do with the OP. What the OP's sources lack is a grounding in reality.
 

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