Why the money system is flawed and why the debt cannot be paid off even if they want to?

[rampart]

What rate do I owe on this debt? Or does the Fed owe me?

money is an interesting subject.

"The process by which banks create money is so simple that the mind is repelled."

John Kenneth Galbraith

 

[Toddsterpatriot]

money is an interesting subject.

"The process by which banks create money is so simple that the mind is repelled."

John Kenneth Galbraith

Cool story.

No answer to my questions?

 

[rampart]

Cool story.

No answer to my questions?

who do you think owes you a dollar? the iou says, (unless i am mistaken and you are holding a 1963 silver certificate ) "federal reserve note"

the interest rate that you pay for holding the note is the inflation rate.

Parker99 while i aghree that the debty will never be paid, and that technically total money + interest is always greater than total money (how could it not be) . but money is not static, and the money i pay you is passed to your creditors ad infinitum .

the usa a sovereign nation which prints and controls its own cutrency, can never be "bankrupt. " anyone who attempts tp pay the debt (clinton in the late 90s ) will soon find that total government debt is exactly equal to capital `held in private sector, and that private sector wants to "keep their own money. ".

one last note from mmt is that taxes are not used to pay the debt (money is instead "spent into existence" wnenever someone borrows from a bank.

taxation, on the other hand, is a very useful brake on inflation. whenever taxes are lowered, inflation is not far behind. the 2001 tax cut led inevitably to the 2008 rash.

 

[Toddsterpatriot]

who do you think owes you a dollar? the iou says, (unless i am mistaken and you are holding a 1963 silver certificate ) "federal reserve note"

the interest rate that you pay for holding the note is the inflation rate.

Parker99 while i aghree that the debty will never be paid, and that technically total money + interest is always greater than total money (how could it not be) . but money is not static, and the money i pay you is passed to your creditors ad infinitum .

the usa a sovereign nation which prints and controls its own cutrency, can never be "bankrupt. " anyone who attempts tp pay the debt (clinton in the late 90s ) will soon find that total government debt is exactly equal to capital `held in private sector, and that private sector wants to "keep their own money. ".

one last note from mmt is that taxes are not used to pay the debt (money is instead "spent into existence" wnenever someone borrows from a bank.

taxation, on the other hand, is a very useful brake on inflation. whenever taxes are lowered, inflation is not far behind. the 2001 tax cut led inevitably to the 2008 rash.

who do you think owes you a dollar?

That's your claim, not mine.

the interest rate that you pay for holding the note is the inflation rate.

So, it's not really debt.

will soon find that total government debt is exactly equal to capital `held in private sector,

Cool story. Can you prove it?

 

[Moonglow]

Humans have created their own artificial environment to exist in and yes occasionally it does collapse due to neglect or arrogance.

 

[rampart]

who do you think owes you a dollar?

That's your claim, not mine.

the interest rate that you pay for holding the note is the inflation rate.

So, it's not really debt.

will soon find that total government debt is exactly equal to capital `held in private sector,

Cool story. Can you prove it?

who do you think owes you a dollar?

That's your claim, not mine.

the interest rate that you pay for holding the note is the inflation rate.

So, it's not really debt.

will soon find that total government debt is exactly equal to capital `held in private sector,

Cool story. Can you prove it?

it is a matter of definition a principle of accounting. every liability is someone's asset.

in the set of all assets in any economy the sum of assets = sum of liabilities

In other words, net private financial wealth would have to be zero if we consider only private sector IOUs (unless the government is holding some of the private debt). This is sometimes called “inside wealth” because it is “inside” the private sector.
In order for the private sector to accumulate net financial wealth, it must be in the form of “outside wealth”, that is, financial claims on another sector. Given our basic division between the public sector and the private sector, the outside financial wealthtakes the form of government IOUs. The private sector holds government currency (including coins and paper currency) as well as the fullrange of government bonds (short-term bills, longer maturity bonds) asnet financial assets, a portion of its positive net wealth.

The Basics of Macroeconomic Accounting

In this chapter we are going to begin to build the necessary foundation to understand modern money. Please bear with us. It may not be obvious at first why this is important. But you cannot possibly understand the debate about the government’s budget (and...

link.springer.com

are you with prof wray so far? for the private sector to accumulate wealth, it must come from somewhere outside that sector, and the federal reserve has the only legal printing press.

 

[Toddsterpatriot]

it is a matter of definition a principle of accounting. every liability is someone's asset.

in the set of all assets in any economy the sum of assets = sum of liabilities

In other words, net private financial wealth would have to be zero if we consider only private sector IOUs (unless the government is holding some of the private debt). This is sometimes called “inside wealth” because it is “inside” the private sector.
In order for the private sector to accumulate net financial wealth, it must be in the form of “outside wealth”, that is, financial claims on another sector. Given our basic division between the public sector and the private sector, the outside financial wealthtakes the form of government IOUs. The private sector holds government currency (including coins and paper currency) as well as the fullrange of government bonds (short-term bills, longer maturity bonds) asnet financial assets, a portion of its positive net wealth.

The Basics of Macroeconomic Accounting

In this chapter we are going to begin to build the necessary foundation to understand modern money. Please bear with us. It may not be obvious at first why this is important. But you cannot possibly understand the debate about the government’s budget (and...

link.springer.com

are you with prof wray so far? for the private sector to accumulate wealth, it must come from somewhere outside that sector, and the federal reserve has the only legal printing press.

it is a matter of definition a principle of accounting. every liability is someone's asset.

Ok. But not every asset is a liability.

for the private sector to accumulate wealth, it must come from somewhere outside that sector, and the federal reserve has the only legal printing press.

Fed printing doesn't create wealth.

 

[Natural Citizen]

Dollar bills aren't debt.

Federal Reserve Notes are effectively a receipt for a claim check on an IOU bond.

But we've been through this a guhzillion times already.


Proceed...

 

[Toddsterpatriot]

it is a matter of definition a principle of accounting. every liability is someone's asset.

in the set of all assets in any economy the sum of assets = sum of liabilities

In other words, net private financial wealth would have to be zero if we consider only private sector IOUs (unless the government is holding some of the private debt). This is sometimes called “inside wealth” because it is “inside” the private sector.
In order for the private sector to accumulate net financial wealth, it must be in the form of “outside wealth”, that is, financial claims on another sector. Given our basic division between the public sector and the private sector, the outside financial wealthtakes the form of government IOUs. The private sector holds government currency (including coins and paper currency) as well as the fullrange of government bonds (short-term bills, longer maturity bonds) asnet financial assets, a portion of its positive net wealth.

The Basics of Macroeconomic Accounting

In this chapter we are going to begin to build the necessary foundation to understand modern money. Please bear with us. It may not be obvious at first why this is important. But you cannot possibly understand the debate about the government’s budget (and...

link.springer.com

are you with prof wray so far? for the private sector to accumulate wealth, it must come from somewhere outside that sector, and the federal reserve has the only legal printing press.

Where did you go? LOL!

it is a matter of definition a principle of accounting. every liability is someone's asset.

Ok. But not every asset is a liability.

for the private sector to accumulate wealth, it must come from somewhere outside that sector, and the federal reserve has the only legal printing press.

Fed printing doesn't create wealth.

 

[Parker99]

Cut spending. A lot.

Well even if the government spend no more than one dollar in year they have huge debt but the problem is money in circulation is debt so they can’t use that money. Well it is explaining the money in circulation is debt and the media and government does not what to tell you that.

 

[Toddsterpatriot]

Well even if the government spend no more than one dollar in year they have huge debt but the problem is money in circulation is debt so they can’t use that money. Well it is explaining the money in circulation is debt and the media and government does not what to tell you that.

How is money in circulation debt?

 

[Parker99]

who do you think owes you a dollar? the iou says, (unless i am mistaken and you are holding a 1963 silver certificate ) "federal reserve note"

the interest rate that you pay for holding the note is the inflation rate.

Parker99 while i aghree that the debty will never be paid, and that technically total money + interest is always greater than total money (how could it not be) . but money is not static, and the money i pay you is passed to your creditors ad infinitum .

the usa a sovereign nation which prints and controls its own cutrency, can never be "bankrupt. " anyone who attempts tp pay the debt (clinton in the late 90s ) will soon find that total government debt is exactly equal to capital `held in private sector, and that private sector wants to "keep their own money. ".

one last note from mmt is that taxes are not used to pay the debt (money is instead "spent into existence" wnenever someone borrows from a bank.

taxation, on the other hand, is a very useful brake on inflation. whenever taxes are lowered, inflation is not far behind. the 2001 tax cut led inevitably to the 2008 rash.

The problem is all money printed is debt money.

So the US government can never pay debt off because most money in circulation is debt money.

 

[Parker99]

How is money in circulation debt?

Well there is interest on every dollar printed that is greater than sums money in circulation the debt.

In other words the debt is greater than the money in circulation.

 

[Toddsterpatriot]

Well there is interest on every dollar printed that is greater than sums money in circulation the debt.

In other words the debt is greater than the money in circulation.

Well there is interest on every dollar printed

Show me.

In other words the debt is greater than the money in circulation.

So what? What do you feel that proves?

 

[Ringo]

 

[expat_panama]

Well there is interest on every dollar printed that is greater than sums money in circulation the debt.

In other words the debt is greater than the money in circulation.

Earlier you said that the national debt is about $33T. You might first consider that $2T is debt that the gov't owes itself, debt that's not carried by an private person. Still let's compare those debt levels to what the total private net worth is --that's the total private assets minus the total private debt (much bigger than the mere gov't debt) and what we see is $151T. If you complain that every man woman and child in the U.S. on average will have to pay $98K then we'll also have to keep in mind that every man woman and child in the U.S. on average has $540K. Averages are fun.

Real life is that some folks have a net worth far greater than that $540K and they'll pay off much more than the $98k national debt.

Also, you keep referring to "money in circulation". Please realize that there's also a lot more money in the banks that's not in circulation. Add to that the assets folks have (stocks, land, bonds, gold) that are worth big bucks. Total private net worth in the U.S. (assets minus debts) is $151T. Makes that $33T small potatoes.

 

[Ringo]

Add to that the assets folks have (stocks, land, bonds, gold) that are worth big bucks. Total private net worth in the U.S. (assets minus debts) is $151T. Makes that $33T small potatoes.

If everyone in the US is so rich, why isn't the number of homeless people decreasing and anyway, why do people pay the bank for 30 years on their homes when they can just buy them with cash with such wealth. I'm wondering.
Although I'm guessing that somehow the communists are involved in this... Or Catholics.. Or blacks...
No, it must be the communists, unlike all the others they never get out of the fashion of being blamed for everything in capitalist society.

 

[Toddsterpatriot]

Earlier you said that the national debt is about $33T. You might first consider that $2T is debt that the gov't owes itself, debt that's not carried by an private person. Still let's compare those debt levels to what the total private net worth is --that's the total private assets minus the total private debt (much bigger than the mere gov't debt) and what we see is $151T. If you complain that every man woman and child in the U.S. on average will have to pay $98K then we'll also have to keep in mind that every man woman and child in the U.S. on average has $540K. Averages are fun.

Real life is that some folks have a net worth far greater than that $540K and they'll pay off much more than the $98k national debt.

Also, you keep referring to "money in circulation". Please realize that there's also a lot more money in the banks that's not in circulation. Add to that the assets folks have (stocks, land, bonds, gold) that are worth big bucks. Total private net worth in the U.S. (assets minus debts) is $151T. Makes that $33T small potatoes.

You might first consider that $2T is debt that the gov't owes itself, debt that's not carried by an private person.

$7 trillion.

 

[Parker99]

Earlier you said that the national debt is about $33T. You might first consider that $2T is debt that the gov't owes itself, debt that's not carried by an private person. Still let's compare those debt levels to what the total private net worth is --that's the total private assets minus the total private debt (much bigger than the mere gov't debt) and what we see is $151T. If you complain that every man woman and child in the U.S. on average will have to pay $98K then we'll also have to keep in mind that every man woman and child in the U.S. on average has $540K. Averages are fun.

Real life is that some folks have a net worth far greater than that $540K and they'll pay off much more than the $98k national debt.

Also, you keep referring to "money in circulation". Please realize that there's also a lot more money in the banks that's not in circulation. Add to that the assets folks have (stocks, land, bonds, gold) that are worth big bucks. Total private net worth in the U.S. (assets minus debts) is $151T. Makes that $33T small potatoes.

It shows…

NATIONAL DEBT = $32.726 trillion dollars
(Debt per citizen = $97,606 dollars)
INTEREST = $664.93 billion dollar bills

Search report for “currency in circulation”
Federal Reserve Banks . . . Aug. 23, 2023
Currency in circulation . . . 2,328,554 millions (2.3 trillions)

 

[Toddsterpatriot]

It shows…

NATIONAL DEBT = $32.726 trillion dollars
(Debt per citizen = $97,606 dollars)
INTEREST = $664.93 billion dollar bills

Search report for “currency in circulation”
Federal Reserve Banks . . . Aug. 23, 2023
Currency in circulation . . . 2,328,554 millions (2.3 trillions)

So what?
You still haven't shown that the $20s in my wallet somehow have interest attached.