U.S. going broke?

Discussion in 'Economy' started by bush lover, Jul 15, 2006.

  1. bush lover
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    bush lover Member

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    http://www.telegraph.co.uk/money/ma...nuId=242&sSheet=/money/2006/07/14/ixcity.html


    Now we have the foreign liberal press ragging on our President's fiscal policies. As I said, the libs built up needless surpluses. What did they want to do with all that money? Spend it of course. I am glad our President gave it back to the taxpayers. As for deficits, they are irrelevant. We just keep printing money to cover the interest payments and Social Security and all of that stuff. It's that simple. Cheap imports from China and Mexico will keep inflation low.
     
  2. BaronVonBigmeat
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    BaronVonBigmeat Senior Member

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    If we weren't printing money, the prices of stuff from China and Mexico would be even, we'd all be better off, and the prices of non-outsourceable items--energy, education, housing--would have remained flat. What happens when foreign central banks unload all their dollars, and we can't outsource our inflation anymore? Whoopsie!

    Repeat after me: inflation is a stealth tax. Stealth. Tax. A stealth flat tax with no exemptions, to be precise. Deficits are not irrelevant. If it wasn't for the national debt, we could eliminate the income tax and replace it with nothing. Just the interest on the debt devours all the income tax revenue.

    Also, there was never really a surplus, unless you're using fraudulent government methods, which would get you thrown in prison if you tried it at a corporation. Then you give liberals credit for this imaginary surplus? If there was a surplus, wouldn't that prove that they weren't interested in spending it?

    Are you a gimmick poster?
     
  3. red states rule
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    red states rule Senior Member

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    Pres Bush cut taxes on anyone who paid income taxes

    Four years in a row, revenues to the US Treasury has gone up

    The US Budget deficit has gone down

    The US economy is growing, wages are increasing, home ownership is at record levels, and libs are in a state of denial
     
  4. BaronVonBigmeat
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    BaronVonBigmeat Senior Member

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    Tax cuts are good, tax cuts combined with spending cuts are far better. :)
     
  5. Niccolò Matteo
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    Niccolò Matteo Rookie

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    Funny. I thought the US went broke in 1913, when Americans started trading debt, instead of actual money.
     
  6. gonegolfin
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    gonegolfin Member

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    Bingo. We just pulled other countries into the game.

    Brian
     
  7. Bullypulpit
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    Bullypulpit Senior Member

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    Bush's "tax-cuts" gave my wife and I a total of $300 back since they were first instituted. Big effing deal. The simple fact of the matter is that the bulk of the tax cuts went to the wealthiest 1% of Americans...People whose income is a result of their investments rather than by dint of their own labor. You want an equitable tax cose, cut the taxes on wages earned and raise the taxes on investment income, before the individual reaches retirement age. At that point the taxes on investment income revert to the same as for wages.

    "We just keep printing money..." !?!?! Do that and you can use the currency to patch the holes in the walls of the cardboard box you and your family have to live in because you lost your home when the interest payments on your mortage spiralled so high you could no longer make the payments. The deficit DOES matter, especially when foreign powers, some not necessarily friendly to the US buy up that debt.

    That statement alone displays the appalling ignorance, not only of yourself, but of all those who share your views. But you, and others of your ilk, were never ones to let reality stand in your way.
     
  8. Bullypulpit
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    Bullypulpit Senior Member

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    Your citations? :link:
     
  9. gonegolfin
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    gonegolfin Member

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    Certainly no problem with this.

    You are confusing inflation with price inflation. The import of cheap goods from China and Mexico is not deflationary. In fact, it is inflationary. Why? Because the hiding of the evidence of inflation provides the Central Banks more opportunity to inflate. This ability to hide the evidence of inflation is derived from cheaper goods and services (downward price pressure) provided from overseas (globalization).

    Brian
     
  10. BaronVonBigmeat
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    BaronVonBigmeat Senior Member

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    Yeah, that pretty much gets to the heart of the problem. The definition of inflation used to be simple: an increase in the money supply. Deflation, likewise, was defined as a contraction in the money supply. This is what economists used for years and years. Simple.

    Somewhere along the way (I think it was one of Keynes' innovations :rolleyes:), the terms were redefined. "Inflation" is now an increase in prices. Deflation is now a decrease in prices.

    This creates a huge problem. Take computers, the prices have gone down considerably, and if you consider their performance increases, it's astonishing. Now imagine if cars, medicine, housing, etc. showed similar decreases in price (they do in terms of inflation-adjusted dollars actually, just not as fast as computers).

    Awesome, we'd all be rich, even if we never got a raise! But in economist la-la land, this would somehow viewed as generic "deflation", a horrible thing to be combated with money printing. This "deflation" is due to increased productivity. This is good deflation, the type of deflation that leads to higher incomes. The western world didn't rise out of poverty because wages went up, it rose out of poverty because prices went down. Goods that were formerly reserved for Kings are now available to everyday slobs.

    If deflation were simply defined as a contraction in the money supply...well, we haven't seen that since the 1930's.

    Likewise, inflation might be caused by a temporary scarcity (oil for example), but high prices will spur companies to find alternatives and increase production. But since this is lumped in with real monetary inflation--money printing--the fed takes action when it shouldn't.
     

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