Why The National Debt Is Good For The Country

[Liberty]

this is the most fucking stupid ass thread i have seen in a VERY long time. DEBT IS NEVER A GOOD THING YOU KEYNESIAN MORON!!!!!!!!

 

[bripat9643]

It's amazing how many economic idiocies you can pack into a single post

1. Debt enriches the private sector.

When the government issues debt, it spends the same amount of money as the amount it borrows. Money flows from the private sector through the government, and back into the private sector again. No money is lost or made in this process. The only net result is the creation of new treasury bonds, which enrich the private sector.

Government may spend the money in the private sector, but the people who paid the money are not the ones who receive it. Your fallacy result from treating "the private sector" as a monolith. Only if you count parasites sucking on the government tit as "the private sector" does your claim have any basis in reality. the tics consume real goods and services that will no longer be available for taxpayers to consume.

Whether federal reserve notes are created or destroyed is irrelevant. they do not constitute real wealth. The goods and resources that the tics consume is real wealth.

A treasury bond is a loan. It does not "enrich" anyone accept the government.

2. The debt need not be paid back.

So long as people want to hold government bonds, and the government can afford to pay the interest, there is no need for the government to pay back money it's borrowed in the past.

That's true, and I can maintain a $10,000 balance on my credit cards. The question is, how does that benefit me?

3. Paying interest does not make the country poorer.

When the interest is paid to Americans, there is no net result. When it's paid to foreigners, they can save the dollars or spend them on American goods and services. Either way it's good for us.

That might bare some semblance to truth if we only paid interest to Americans. However, we pay a lot of interest to foreign bond holders. When they spend dollars on American goods and services, they receive something of actual value while we receive nothing but worthless pieces of paper. Even if all the interest was paid to Americans, that would mean some Americans would receive real wealth while others get stuck with the bill. That's the main problem with all your economic theories: they ignore the people who are getting screwed.

4. Debt is the basis of our financial system.

Dollars are backed by US debt. If the debt were paid off, it would result in the collapse of our economy.

That is pure crap. Our dollars are backed by absolutely nothing at all. We have a fiat money system. That means the dollar is a currency purely because the government mandates that it be used for a currency. We had a fiat currency when the government had no debt, so how will eliminating our debt destroy the currency? If you turn in a federal reserve note to the government, what do you get in exchange? Another federal reserve note.

5. We can't default on our debt, unless it's voluntary.

Our debt is denominated in dollars. We can create as many as we want. Therefore we can't run out of dollars to pay our debt.

Yeah, the government can always pay off the debt by printing money. Of course, then our currency would become worthless and interest rates would go to 100%. the net result would still be default since the bond holders would receive worthless federal reserve notes for the bonds. No problem there, right?

6. We are not "borrowing from our grandchildren."

Should our grandchildren choose to pay down our debt (and there's no reason why they should), the payments will go to our grandchildren, not to us. (We'll be dead by then.)

In other words, you don't give a flying fuck about your grand children.

 

[bripat9643]

The people who benefit the most from our laws, our government, and our country have the greatest obligation to support them.

That would be all the parasites on welfare.

 

[Ame®icano]

Except we can't reduce unemployment because you people, in typical Communist fashion, want to punish those that are successful.

The people who benefit the most from our laws, our government, and our country have the greatest obligation to support them.

Who benefit most from our government?

 

[bripat9643]

I think it has to do with whether the country can afford to make the payments, not any particular ratio to GDP. Japan's ratio is over 200%, and their interest rate is lower than ours. Interest on the debt is something like 6% of the budget in the US. It's not that much.

The debt is not the problem right now; unemployment is.

The only part of the Republican argument about the debt that's right is that we can't run large deficits indefinitely or forever. But that's not what economists like Krugman are arguing. They're arguing for temporary deficits - larger than what we have now - until the recovery is secure.

Obama's "stimulus" shows the problem with that theory. It was sold as a temporary jump in spending to prevent unemployment. However, all the additional spending was incorporated into the baseline, so the spending increases were actually permanent.

So-called "temporary deficits" always turn into permanent spending increases. When did any government agency ever have it's budget cut in real terms? the answer is "never."

Anyone arguing for "temporary deficits" is a con artist trying to pull the wool over the eyes of taxpayers.

 

[AquaAthena]

this is the most fucking stupid ass thread i have seen in a VERY long time. DEBT IS NEVER A GOOD THING YOU KEYNESIAN MORON!!!!!!!!

Hear! Hear!

 

[bripat9643]

Who benefit most from our government?

Libtards like Sundial think because the government prevents the rich from being robbed and looted, that they have benefited the most. In tern, they think that gives them the right to rob and loot the rich. In other words, it's simply a question of which gang of criminals gets to take the loot from the rich.

 

[Liberty]

Who benefit most from our government?

Libtards like Sundial think because the government prevents the rich from being robbed and looted, that they have benefited the most. In tern, they think that gives them the right to rob and loot the rich. In other words, it's simply a question of which gang of criminals gets to take the loot from the rich.

You refer to the concept of "Legal Plunder" outlined by Bastiat...

As long as it is admitted that the law may be diverted from its true purpose — that it may violate property instead of protecting it — then everyone will want to participate in making the law, either to protect himself against plunder or to use it for plunder. Political questions will always be prejudicial, dominant, and all-absorbing. There will be fighting at the door of the Legislative Palace, and the struggle within will be no less furious. To know this, it is hardly necessary to examine what transpires in the French and English legislatures; merely to understand the issue is to know the answer.

Is there any need to offer proof that this odious perversion of the law is a perpetual source of hatred and discord; that it tends to destroy society itself? If such proof is needed, look at the United States [in 1850]. There is no country in the world where the law is kept more within its proper domain: the protection of every person's liberty and property. As a consequence of this, there appears to be no country in the world where the social order rests on a firmer foundation. But even in the United States, there are two issues — and only two — that have always endangered the public peace.

 

[cutter]

How's that "Debt Is Good For The Country" Plan working for you now? Got Downgrade?

 

[Sundial]

Our money is not backed by anything. Not gold, not silver, or anything else.

Our money is backed by Treasury bonds. Gold and silver, on the other hand, are backed by nothing.

We use a fiat system of currency which is the act of printing money out of thin air.

Modern money is created by issuing debt. It is the most successful monetary system in the history.

NO country in history has ever once used this system and survived.

Virtually every country in the world uses this system, and all of them are surviving.

Gold and gold-backed systems, on the other hand, have not survived anywhere on the planet.

The Fed has been printing money form nothing for so long that now we can't keep up with the debt at all, and have to borrow more money from the Fed to pay to our nations debt. So we will always be behind.

You don't understand money, or debt, or how money is created.

Had we not of gone into the Federal Reserve System than our dollar today would have the purchasing power of $22.00, instead it is worth 4 cents as compared to its value in 1913.

In 1913 the average salary was around $750 per year.

In 1913 ordinary people didn't have cars, running water, or electricity.

You really want to go back to that?

It doesn't take a scholar to figure this out. The Fed is the elephant in the room, and there is NOTHING hurting our nations economically as bad as it is.

Every bank loans out more money than it has. That's how the system works. The banks go to the Fed for a loan, the Fed prints the money, loans it to the banks which loan it to us. All with interest. That Interest gets kicked back to the Fed. All for doing nothing but running a printing press. Wouldn't it be better for that money to go back into our economy?

This paragraph is economic gibberish.

The Fed pays most of its revenue to the government. It doesn't leave the economy.

 

[Sundial]

If the US Government was a family, their current financial status would look like this:

They make $58,000 per year, but spend $75,000 per year, and they have $327,000 in credit card debt.

Now liberals, please twist this to some how explain this is "good". This should be fun to watch them trip over themselves trying to explain how this kind of irresponsible, reckless spending is "good".

The US government is not a family.

 

[Sundial]

You left out all the important reasons & made your argument completely one sided.

8. Increasing debt = Inflation. This is bad for most especially fixed income & savers. It is earnings & savings theft. A cruel tax. If the USG is going to print money then they should pay it to the people who they stole the value from. The savers. All that newly created currency should not go to government cronies first. They are getting to spend it first before inflation sets in. That is criminal in so many ways.

9. China is artificially devaluing their currency creating a de-facto export subsidy & import tariff. They have found a way around the WTO policy on protectionism.

A. Nobody's printing any money. Issuing Treasury bonds does not increase the money supply.

B. When corporations issue debt, does that also, in your mind, equal theft?

C. What does China have to do with anything?

A. Issuing debt is exactly the same as printing money when it is never getting paid off. That is what the Fed is doing. It is a stealth monetization of debt.

B. When corporations issue debt they expect to be paid back with interest. Corporations usually were limited by credit ratings, interest rates & leverage. The money supply remain constrained by those limits stabilizing prices. That was removed when Clinton signed S.900 into law creating the "Shadow Banking System". This law allowed risk to be spread bad risk & incredible leverage ratios. Couple that with the Fed's low interest rates & we had the largest theft in history.

Anyone who barrows money with out intending to pay it back is theft.

Anyone who devalues currency is stealing from savers. You knew that but choose to act retarded.

C. Needs no explanation for competent people.

A. I'm not sure you understand the difference between issuing bonds - which is what the Treasury does - and increasing the money supply (Fed). It's boring to try to guess what you mean when you don't seem to understand the words you're using. So I'm not going to do it.

B. "When corporations issue debt they expect to be paid back with interest." Again, you don't seem to be able to put sentences together that make sense. Do you mean, "When people purchase debt from corporations, the people who buy the debt expect to be paid back"?

If so, all I can say is that corporations routinely roll over debt, in exactly the same way that the Federal government.

C. OK.

 

[Sundial]

1- I see , so in Orwellian double speak the rich are parasites?

2-So if fed bankers are paid a salary why are they claiming the US owes them $1.6 trillion dollars?

3- So why did FDR abandoned capitalism in favor of fascism in 1935? Why did the US default then on its obligations for the 1st time ?

4- I see , so the 17 TTTTTTTTTTTTTTTTrillion debt will be paid in our lifetime? So, what do you smoke.....mexican sinsemilla?

.

1. "Parasite" has a negative connotation, but in the sense of "living off the work of others" then yes, the rich - or at least, the richest of the rich - are parasites.

Not that I mean to insult them. If I were rich, I'd be a parasite too.

2. Bankers are not claiming the government owes "them" whatever amount of money. (I'm not sure it's 1.6 trillion, but whatever.) They're claiming - correctly - that the government owes THE BANK that amount of money. Do you really not see the difference?

3. The US did not "abandon capitalism in favor of fascism in 1935". But if you want to repeat whatever nutbag conspiracy-theory nonsense you get from your nutbag conspiracy theory websites, go ahead.

4. No, I said the debt need not be paid back. Not in our lifetime, or anyone else's.

 

[Sundial]

It's amazing how many economic idiocies you can pack into a single post

1. Debt enriches the private sector.

When the government issues debt, it spends the same amount of money as the amount it borrows. Money flows from the private sector through the government, and back into the private sector again. No money is lost or made in this process. The only net result is the creation of new treasury bonds, which enrich the private sector.

Government may spend the money in the private sector, but the people who paid the money are not the ones who receive it. Your fallacy result from treating "the private sector" as a monolith. Only if you count parasites sucking on the government tit as "the private sector" does your claim have any basis in reality. the tics consume real goods and services that will no longer be available for taxpayers to consume.

The people who receive the money are not "tics". They're soldiers, marines, sailors, FBI agents, judges, and thousands of ordinary people who do the hard work of making the country work so that people like you can moan and bitch and complain and receive your social security checks.

When there are millions of people who are unemployed, the government doesn't need to worry about taking resources from the private sector. The problem is the private sector's failure to utilize the resources that it has. If there was a 100% employment rate, that would be a different thing. As it is, the problem is too few jobs, not too many.

Whether federal reserve notes are created or destroyed is irrelevant. they do not constitute real wealth. The goods and resources that the tics consume is real wealth.

I'll be happy to take your worthless Federal Reserve Notes off your hands. PM me, and I'll send you a shipping address. I'll pay for shipping.

A treasury bond is a loan. It does not "enrich" anyone accept the government.

The people who own Treasury bonds would disagree with you.

2. The debt need not be paid back.

So long as people want to hold government bonds, and the government can afford to pay the interest, there is no need for the government to pay back money it's borrowed in the past.

That's true, and I can maintain a $10,000 balance on my credit cards. The question is, how does that benefit me?



That might bare some semblance to truth if we only paid interest to Americans. However, we pay a lot of interest to foreign bond holders. When they spend dollars on American goods and services, they receive something of actual value while we receive nothing but worthless pieces of paper.

By "worthless pieces of paper" you're referring to dollars, right? Anyway....

In the present the Chinese (or whoever) are sending us goods, and we're sending them dollars. They can either keep those dollars (in which case, we get the goods, and they get "worthless pieces of paper"), or they can send the dollars back to us for our goods.

If they send the dollars back, they'll create jobs in our country, in the exact same way we're creating jobs in their country in the present. It's a trade-off. Nobody loses.

Even if all the interest was paid to Americans, that would mean some Americans would receive real wealth while others get stuck with the bill. That's the main problem with all your economic theories: they ignore the people who are getting screwed.

If by "real wealth" you mean dollars, then you're right. (Wait. Didn't you just say... oh, never mind.) When people lend the government money, they get interest in return. That's how the system works. If you want to look at that as "some people getting screwed," that's your prerogative, I guess.

At any rate, interest rates are at historic lows, so we're getting a pretty good deal.

That is pure crap. Our dollars are backed by absolutely nothing at all. We have a fiat money system. That means the dollar is a currency purely because the government mandates that it be used for a currency. We had a fiat currency when the government had no debt, so how will eliminating our debt destroy the currency? If you turn in a federal reserve note to the government, what do you get in exchange? Another federal reserve note.

The dollar is backed (mostly) by Treasury bonds. You can see their balance sheet here.

The Federal Reserve (like all banks) creates money when it makes loans. When the money is paid back, the dollars are extinguished. (Again, this the nature of banking, and is true of all banks.) (Money comes out of "thin air" and back to "thin air" it returns.)

In order to pay back all its debt, the government would have to pay back (extinguish) all currency and federal reserves. Without currency and fed funds, the system would collapse.

If it makes it easier, think of it like this. In the Federal Reserve system Treasury bonds are the "gold," (compared to a gold-backed system). When the government pays off a bond, the bond "disappears".

What happens in a gold-backed system when all the gold disappears?

The same thing would happen in our system if the Federal government paid off all its debt.

5. We can't default on our debt, unless it's voluntary.

Our debt is denominated in dollars. We can create as many as we want. Therefore we can't run out of dollars to pay our debt.

Yeah, the government can always pay off the debt by printing money. Of course, then our currency would become worthless and interest rates would go to 100%. the net result would still be default since the bond holders would receive worthless federal reserve notes for the bonds. No problem there, right?

If or when inflation becomes a problem, we can raise taxes and/or cut spending then. Inflation is not our problem. Unemployment is.

You're worried about a problem we don't have, and ignoring a problem we do.

If you were a doctor, and you had a patient who was starving, you'd tell him to eat less and exercise, so he doesn't get fat.

6. We are not "borrowing from our grandchildren."

Should our grandchildren choose to pay down our debt (and there's no reason why they should), the payments will go to our grandchildren, not to us. (We'll be dead by then.)

In other words, you don't give a flying fuck about your grand children.

Can you answer this question: When interest is paid on Treasury bonds in the future, will it go to people who are living, or people who are dead?

 

[Sundial]

Except we can't reduce unemployment because you people, in typical Communist fashion, want to punish those that are successful.

The people who benefit the most from our laws, our government, and our country have the greatest obligation to support them.

Who benefit most from our government?

The rich.

 

[Sundial]

Who benefit most from our government?

Libtards like Sundial think because the government prevents the rich from being robbed and looted, that they have benefited the most. In tern, they think that gives them the right to rob and loot the rich. In other words, it's simply a question of which gang of criminals gets to take the loot from the rich.

You need to work harder if you think you can speak for me.

 

[LordBrownTrout]

If the US Government was a family, their current financial status would look like this:

They make $58,000 per year, but spend $75,000 per year, and they have $327,000 in credit card debt.

Now liberals, please twist this to some how explain this is "good". This should be fun to watch them trip over themselves trying to explain how this kind of irresponsible, reckless spending is "good".

The US government is not a family.

They're dysfunctional retards. I don't know why some of you elevate them to god-like status. I've got more respect for gamblers, whores, and peasants.

 

[bripat9643]

The US government is not a family.

True. It's an organized criminal class.

 

[bripat9643]

Who benefit most from our government?

The rich.

Wrong. Useless parasites benefit the most.

 

[Sundial]

1. Debt enriches the private sector.

When the government issues debt, it spends the same amount of money as the amount it borrows. Money flows from the private sector through the government, and back into the private sector again. No money is lost or made in this process. The only net result is the creation of new treasury bonds, which enrich the private sector.

2. The debt need not be paid back.

So long as people want to hold government bonds, and the government can afford to pay the interest, there is no need for the government to pay back money it's borrowed in the past.

3. Paying interest does not make the country poorer.

When the interest is paid to Americans, there is no net result. When it's paid to foreigners, they can save the dollars or spend them on American goods and services. Either way it's good for us.

4. Debt is the basis of our financial system.

Dollars are backed by US debt. If the debt were paid off, it would result in the collapse of our economy.

5. We can't default on our debt, unless it's voluntary.

Our debt is denominated in dollars. We can create as many as we want. Therefore we can't run out of dollars to pay our debt.

6. We are not "borrowing from our grandchildren."

Should our grandchildren choose to pay down our debt (and there's no reason why they should), the payments will go to our grandchildren, not to us. (We'll be dead by then.)

Sorry I didn't see this thread sooner... All I can say is WOW, thats a lot of BS with no substance or basis in reality.

First the government doesn't "issue debt" it aquires debt. Debt is what you owe someone or something. LOL jesus dude...

The government issues bonds. Bonds are debt. I'm not sure if you're being hyper-technical, or you don't know what you're talking about.

On to the list now...

1. The government itself does not make or print money.

The government prints money. It's done at the Bureau of Engraving and Printing. You can watch them do it, if you like.

That is done by the Federal Reserve Banks which are NOT a government controlled agency.

The Federal Reserve is a government controlled agency. Its authority comes from Congress, and its Chairman is selected by the President. All their revenue (or almost all of it) goes to the government. Last year $80.9 billion, and paid the Treasury $78.4 billion. link

They have their own investors. To make more money they buy US Treasury Securities from the US treasury Dept, and to decrease money supply they sell those Treasury Securities. The Government pays the FED for this service and pays interest on the money itself.

2. Paying debt voluntarily is paying for something you don't have to pay for. For the life of me I can't understand the logic you just tried to use in that one... You have a dollar and you decide you would like to pay someone else 10 percent of it forever when you could have the full dollar? Are you insane?

Are you being willfully obtuse?

The government can choose not to pay its debt (like it almost did last week). But it can't be forced to default by running out of money.

3. That is the most ignorant and asinine thing I have read in a serious post in a long time.. OMG man did you even look into how money and finance works? PAying money to someone else that you do not need to pay for is ridiculous. And pretending its somehow a good thing is just lunacy.

4. BINGO! Showing the inherent flaw in the system of banking created by bankers. Its the scam of the millennium. The fact is a economic system run on debt and based on debt will inevitably lead to more and more debt. More debt = more interest paid to banks which =Banks become more and more powerful and investors more wealthy.

5. Now you know thats not true... Fact is the FED decides the amount of cash in our economy at any given time. They are a bank and WILL do what it has to do to keep the dollar value at a reasonable level if it can. More money in the system makes each dollar worth less. And before the dollar gets to the point they cannot meet demand either by inability to print enough or by inability to buy Treasury securities, or by endangering their own investors, they will STOP feeding money into the system of banks. Meaning banks will close, etc etc and so on down the line. THEY WILL NOT JUST KEEP PRINTING MORE. And to think so is to be blind of finance.

6. That one was just stupid... You first said "We are not "borrowing from our grandchildren.""... Then you said, "... the payments will go to our grandchildren, not to us. "..... Dude you just contradicted your own statement... Are you drunk?

We are not borrowing from our grandchildren. We're borrowing from each other.

Our grandchildren will not pay us back. Whatever money the pay on the debt, they will pay to each other.

Do you imagine the people of the future will open up our caskets and put money inside?

Seriously, I'd actually really like an answer to that question.