Debt: And If I Laugh....

[PoliticalChic]

“And if I laugh at any mortal thing, 'Tis that I may not weep”
So saith Lord Byron, in his epic poem, ''Childe Harold"....or was it "Don Juan"....


In any case, that is the feeling one gets in looking at the debt.....as accrued due to the policies of the child in the White House.


1. "China’s Treasury Holdings Climb to Record in Government Data

2. China’s holdings of U.S. Treasuries increased $12.2 billion to a record $1.317 trillion in November,...."
China?s Treasury Holdings Climb to Record in Government Data - Bloomberg


Is that more than held by the public??

Yup.

3. Current Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding
01/14/2014 12,304,770,773,237.92 4,982,480,837,913.70 17,287,251,611,151.62
Debt to the Penny (Daily History Search Application)




What a record!!!

And...since this incompetent was elected:

1.More than 6.7 million more Americans have been plunged into poverty since Obama became President.

2.Real household income is down 5%

3. Consumer prices are up 10.2%

4. Total federal debt is up 58%

5. Gasoline prices are up 82%

6. Food stamp recipients up 49%

7. Debt held by the public is up 89%
Obama?s Numbers, October Update




The good news?

The new Stanford-Biney IQ exam has been reduced to one simple question:

"Did you vote for the most compassionate, most merciful Barack Hussein Obama?"

 

[Kimura]

Why should we care if the Chinese hold 1,2, or even 3 trillion in US Treasuries?

 

[PoliticalChic]

Why should we care if the Chinese hold 1,2, or even 3 trillion in US Treasuries?

Why must you expend so much energy to convince all that you are clueless?


Trust me on this: it is immediately evident.

 

[Kimura]

Why should we care if the Chinese hold 1,2, or even 3 trillion in US Treasuries?

Why must you expend so much energy to convince all that you are clueless?


Trust me on this: it is immediately evident.

Answer the question: why should we care? Is there something special about the Chinese having US Treasuries or their desire to park dollars in US financial assets?

 

[PoliticalChic]

Why should we care if the Chinese hold 1,2, or even 3 trillion in US Treasuries?

Why must you expend so much energy to convince all that you are clueless?


Trust me on this: it is immediately evident.

Answer the question: why should we care? Is there something special about the Chinese having US Treasuries or their desire to park dollars in US financial assets?

Answer this question: when will you be getting out of the 'nervous hospital'?



OK, moron.....was the OP restricted to news about China....or was that part where your A.D.D. kicked in?



I'd rather tie you to a railroad track....but let's put you on the right track: re-read the title of the thread.

Good.

Now get a dictionary.....

 

[Kimura]

Why must you expend so much energy to convince all that you are clueless?


Trust me on this: it is immediately evident.

Answer the question: why should we care? Is there something special about the Chinese having US Treasuries or their desire to park dollars in US financial assets?

Answer this question: when will you be getting out of the 'nervous hospital'?



OK, moron.....was the OP restricted to news about China....or was that part where your A.D.D. kicked in?



I'd rather tie you to a railroad track....but let's put you on the right track: re-read the title of the thread.

Good.

Now get a dictionary.....

I usually like to deal with your posts in chucks. You also posted that total public debt is 17,287,251,611,151.62. I also say, given current macroeconomic conditions, so what? US public debt simply represents the total savings of the US economy - or the propensity of the private sector to save. If people correctly referred to it as national savings or equity, it would clear up a TON of confusion.

 

[PoliticalChic]

Answer the question: why should we care? Is there something special about the Chinese having US Treasuries or their desire to park dollars in US financial assets?

Answer this question: when will you be getting out of the 'nervous hospital'?



OK, moron.....was the OP restricted to news about China....or was that part where your A.D.D. kicked in?



I'd rather tie you to a railroad track....but let's put you on the right track: re-read the title of the thread.

Good.

Now get a dictionary.....

I usually like to deal with your posts in chucks. You also posted that total public debt is 17,287,251,611,151.62. I also say, given current macroeconomic conditions, so what? US public debt simply represents the total savings of the US economy - or the propensity of the private sector to save. If people correctly referred to it as national savings or equity, it would clear up a TON of confusion.

I get a warm fuzzy feeling from insulting the stupid.

That's why I always appreciate your dropping by.


Your very first post highlighted said stupidity, as it implied that you were only questioning the particular holder of the debt.....not debt itself.


Realizing with whom I'm dealing....a pretend-economics wonk- let's consider this very simple query:


Note the following:

Obama’s 2011 Budget Proposal: How It’s Spent

http://www.nytimes.com/interactive/2010/02/01/us/budget.html

$3.69 trillon budget proposal

1. Social Security $738 20%

2.National Defense $738

3. Income Security $567

4. Medicare $498

5.Net Interest $251

6. Health $381

7. Education $122

8. Veteran’s Benefits $122

9. Transportation $91.55

10. International Affairs $67.39
$3,575.94




Now....clean off your specs, and focus like a laser on item #5.



Careful here...this is a one question test:
Would it be better if the dollar amount in item #5 go up.....or go down?

Remember....you said "Why should we care if the Chinese hold 1,2, or even 3 trillion..."



No erasing, no crossing out.

 

[TakeAStepBack]

I usually like to deal with your posts in chucks. You also posted that total public debt is 17,287,251,611,151.62. I also say, given current macroeconomic conditions, so what? US public debt simply represents the total savings of the US economy - or the propensity of the private sector to save. If people correctly referred to it as national savings or equity, it would clear up a TON of confusion.

 

[PoliticalChic]

I usually like to deal with your posts in chucks. You also posted that total public debt is 17,287,251,611,151.62. I also say, given current macroeconomic conditions, so what? US public debt simply represents the total savings of the US economy - or the propensity of the private sector to save. If people correctly referred to it as national savings or equity, it would clear up a TON of confusion.

Yes....the dunce does provide comic relief.

Perhaps most amusing was his last phrase...."...a TON of confusion."


If only he understood irony.

 

[Kimura]

Answer this question: when will you be getting out of the 'nervous hospital'?



OK, moron.....was the OP restricted to news about China....or was that part where your A.D.D. kicked in?



I'd rather tie you to a railroad track....but let's put you on the right track: re-read the title of the thread.

Good.

Now get a dictionary.....

I usually like to deal with your posts in chucks. You also posted that total public debt is 17,287,251,611,151.62. I also say, given current macroeconomic conditions, so what? US public debt simply represents the total savings of the US economy - or the propensity of the private sector to save. If people correctly referred to it as national savings or equity, it would clear up a TON of confusion.

I get a warm fuzzy feeling from insulting the stupid.

That's why I always appreciate your dropping by.


Your very first post highlighted said stupidity, as it implied that you were only questioning the particular holder of the debt.....not debt itself.


Realizing with whom I'm dealing....a pretend-economics wonk- let's consider this very simple query:


Note the following:

Obama’s 2011 Budget Proposal: How It’s Spent

http://www.nytimes.com/interactive/2010/02/01/us/budget.html

$3.69 trillon budget proposal

1. Social Security $738 20%

2.National Defense $738

3. Income Security $567

4. Medicare $498

5.Net Interest $251

6. Health $381

7. Education $122

8. Veteran’s Benefits $122

9. Transportation $91.55

10. International Affairs $67.39
$3,575.94




Now....clean off your specs, and focus like a laser on item #5.



Careful here...this is a one question test:
Would it be better if the dollar amount in item #5 go up.....or go down?

Remember....you said "Why should we care if the Chinese hold 1,2, or even 3 trillion..."



No erasing, no crossing out.

Let’s go back to the beginning. I’m going to explain to you how the entire thing works from an operational standpoint.

When the US Treasury spends, an account at the FED called a ‘reserve account’ is credited. You can view a reserve account as a checking account. We refer to US Treasury securities as ‘securities accounts’ over at the FED. They’re similar to your standard CD or savings account.

When a Treasury is purchased by the private sector, the FED debits the appropriate reserve account (checking account) and credits their Treasury account (savings account).
When a US Treasury reaches maturity, the FED debits their Treasury (savings) account and credits the appropriate reserve account (plus interest).

When ‘debt’ is purchased, all it entails is shifting dollars from reserves (checking) to Treasuries (savings). In other words, paying off public debt boils down to shifting funds between accounts at the FED. This can never pose a financial strain to the US government in any capacity.

For example, for fiscal year 2013, the Treasury rolled over roughly 62 trillion in debt. No skyrocketing interest rates, hyperinflation, Zimbabwe, collapse, or financial Armageddon. These numbers are publicly available from the Treasury.

I think I responded to more than #5 in an adequate fashion.

 

[PoliticalChic]

I usually like to deal with your posts in chucks. You also posted that total public debt is 17,287,251,611,151.62. I also say, given current macroeconomic conditions, so what? US public debt simply represents the total savings of the US economy - or the propensity of the private sector to save. If people correctly referred to it as national savings or equity, it would clear up a TON of confusion.

I get a warm fuzzy feeling from insulting the stupid.

That's why I always appreciate your dropping by.


Your very first post highlighted said stupidity, as it implied that you were only questioning the particular holder of the debt.....not debt itself.


Realizing with whom I'm dealing....a pretend-economics wonk- let's consider this very simple query:


Note the following:

Obama’s 2011 Budget Proposal: How It’s Spent

http://www.nytimes.com/interactive/2010/02/01/us/budget.html

$3.69 trillon budget proposal

1. Social Security $738 20%

2.National Defense $738

3. Income Security $567

4. Medicare $498

5.Net Interest $251

6. Health $381

7. Education $122

8. Veteran’s Benefits $122

9. Transportation $91.55

10. International Affairs $67.39
$3,575.94




Now....clean off your specs, and focus like a laser on item #5.



Careful here...this is a one question test:
Would it be better if the dollar amount in item #5 go up.....or go down?

Remember....you said "Why should we care if the Chinese hold 1,2, or even 3 trillion..."



No erasing, no crossing out.

Let’s go back to the beginning. I’m going to explain to you how the entire thing works from an operational standpoint.

When the US Treasury spends, an account at the FED called a ‘reserve account’ is credited. You can view a reserve account as a checking account. We refer to US Treasury securities as ‘securities accounts’ over at the FED. They’re similar to your standard CD or savings account.

When a Treasury is purchased by the private sector, the FED debits the appropriate reserve account (checking account) and credits their Treasury account (savings account).
When a US Treasury reaches maturity, the FED debits their Treasury (savings) account and credits the appropriate reserve account (plus interest).

When ‘debt’ is purchased, all it entails is shifting dollars from reserves (checking) to Treasuries (savings). In other words, paying off public debt boils down to shifting funds between accounts at the FED. This can never pose a financial strain to the US government in any capacity.

For example, for fiscal year 2013, the Treasury rolled over roughly 62 trillion in debt. No skyrocketing interest rates, hyperinflation, Zimbabwe, collapse, or financial Armageddon. These numbers are publicly available from the Treasury.

I think I responded to more than #5 in an adequate fashion.

Answer the question:
Would it be better if the dollar amount in item #5 go up.....or go down?

 

[Kimura]

As far as China is concerned, and any "borrowing", all it entails is debiting the Bank of China's reserve account and crediting their securities account (think checking and savings) over at the FED. And when we pay it back, which we do on a weekly basis (a percentage), all we do it debit their securities account and credit their reserve account.

Your children and grandchildren aren't involved in this equation at all.

What we should be concerned about is possible overspending relative to taxation as to prevent inflation. However, from an operational standpoint, this isn't related to China. Any deficit spending which prevents a desire for the non-government to save net financial assets isn't the type of spending which results in a rise in the general price level. I'd be concerned about inflation if we were at full employment and the economy was redlining at full capacity.

 

[Kimura]

I get a warm fuzzy feeling from insulting the stupid.

That's why I always appreciate your dropping by.


Your very first post highlighted said stupidity, as it implied that you were only questioning the particular holder of the debt.....not debt itself.


Realizing with whom I'm dealing....a pretend-economics wonk- let's consider this very simple query:


Note the following:

Obama’s 2011 Budget Proposal: How It’s Spent

http://www.nytimes.com/interactive/2010/02/01/us/budget.html

$3.69 trillon budget proposal

1. Social Security $738 20%

2.National Defense $738

3. Income Security $567

4. Medicare $498

5.Net Interest $251

6. Health $381

7. Education $122

8. Veteran’s Benefits $122

9. Transportation $91.55

10. International Affairs $67.39
$3,575.94




Now....clean off your specs, and focus like a laser on item #5.



Careful here...this is a one question test:
Would it be better if the dollar amount in item #5 go up.....or go down?

Remember....you said "Why should we care if the Chinese hold 1,2, or even 3 trillion..."



No erasing, no crossing out.

Let’s go back to the beginning. I’m going to explain to you how the entire thing works from an operational standpoint.

When the US Treasury spends, an account at the FED called a ‘reserve account’ is credited. You can view a reserve account as a checking account. We refer to US Treasury securities as ‘securities accounts’ over at the FED. They’re similar to your standard CD or savings account.

When a Treasury is purchased by the private sector, the FED debits the appropriate reserve account (checking account) and credits their Treasury account (savings account).
When a US Treasury reaches maturity, the FED debits their Treasury (savings) account and credits the appropriate reserve account (plus interest).

When ‘debt’ is purchased, all it entails is shifting dollars from reserves (checking) to Treasuries (savings). In other words, paying off public debt boils down to shifting funds between accounts at the FED. This can never pose a financial strain to the US government in any capacity.

For example, for fiscal year 2013, the Treasury rolled over roughly 62 trillion in debt. No skyrocketing interest rates, hyperinflation, Zimbabwe, collapse, or financial Armageddon. These numbers are publicly available from the Treasury.

I think I responded to more than #5 in an adequate fashion.

Answer the question:
Would it be better if the dollar amount in item #5 go up.....or go down?

For a sovereign currency issuer like the US, which I tried to explain, it doesn't necessarily matter (it simply boils to down to shifting $$$$ from securities accounts to reserve accounts). The FED also controls the interest rate all along the term structure, but they will allow for some fluctuations between the IOR rate and discount rate. I'm a proponent of zero percent interest rates if we have the right fiscal and monetary policies, though. We clearly don't have the right fiscal and monetary policies at this point in time.

 

[PoliticalChic]

Let’s go back to the beginning. I’m going to explain to you how the entire thing works from an operational standpoint.

When the US Treasury spends, an account at the FED called a ‘reserve account’ is credited. You can view a reserve account as a checking account. We refer to US Treasury securities as ‘securities accounts’ over at the FED. They’re similar to your standard CD or savings account.

When a Treasury is purchased by the private sector, the FED debits the appropriate reserve account (checking account) and credits their Treasury account (savings account).
When a US Treasury reaches maturity, the FED debits their Treasury (savings) account and credits the appropriate reserve account (plus interest).

When ‘debt’ is purchased, all it entails is shifting dollars from reserves (checking) to Treasuries (savings). In other words, paying off public debt boils down to shifting funds between accounts at the FED. This can never pose a financial strain to the US government in any capacity.

For example, for fiscal year 2013, the Treasury rolled over roughly 62 trillion in debt. No skyrocketing interest rates, hyperinflation, Zimbabwe, collapse, or financial Armageddon. These numbers are publicly available from the Treasury.

I think I responded to more than #5 in an adequate fashion.

Answer the question:
Would it be better if the dollar amount in item #5 go up.....or go down?

For a sovereign currency issuer like the US, which I tried to explain, it doesn't necessarily matter. The FED controls the interest rate all along the term structure. They will allow for some fluctuations between the IOR rate and discount rate, though.

I believe you've proven my point about you being a moron.

So....increased debt, ineluctably leading to larger interest payments, requiring higher taxes, leading to a lower standard of living.....

"...it doesn't necessarily matter."



I consider you to be proof of reincarnation.
No one could possibly get to be so stupid in just one lifetime.

 

[Kimura]

I believe you've proven my point about you being a moron.

So....increased debt, ineluctably leading to larger interest payments, requiring higher taxes, leading to a lower standard of living.....

Like I said, interest payments on debt boil down to shifting $$$$ from securities accounts to reserve accounts. It's that simple, and it has zero effect on our standard of living, nor does it require higher taxes.

Here's another one that will flip your lid: Your federal tax $$$$ really doesn't fund any expenditures of the federal government. If government spending is printing $$$$, think of taxes as unprinting $$$$.

The bottom line is the FED never has or doesn't have $$$$. For example, when we're taxed, all that occurs is some numbers in our bank accounts are marked down, but the federal government really doesn't get anything per se. It's the same as a football game. A team scores a touchdown and conversion to throw up 7 points on the board. Do people sit there and wonder where these points come from? Do you think football stadiums have reserve points or a vault for points? The US government is like a football stadium. It doesn't really have or not have any points. If we view this in terms of monetary operations, the US government, using the FED and Treasury, is the ultimate scorekeeper. The key difference is spending $$$$ that one creates vs spending $$$$ created by someone else.

Basically, at the end of the day, the federal government must spend $$$$ into existence before we can make any tax payments or any borrowing takes place. It's all done w/$$$$ that is already spent. Taxes serve to regulate aggregate demand and to ensure all all prices, debts, and assets are priced in US dollars (the national unit of account).

 

[Peterf]

Why should we care if the Chinese hold 1,2, or even 3 trillion in US Treasuries?

Because eventually they will say (in Chinese) "That's enough already!" and stop lending you any more money. And then the US will have to start living within its means. I predict much wailing and nashing of teeth.

 

[Peterf]

Answer the question: why should we care? Is there something special about the Chinese having US Treasuries or their desire to park dollars in US financial assets?

Answer this question: when will you be getting out of the 'nervous hospital'?



OK, moron.....was the OP restricted to news about China....or was that part where your A.D.D. kicked in?



I'd rather tie you to a railroad track....but let's put you on the right track: re-read the title of the thread.

Good.

Now get a dictionary.....

I usually like to deal with your posts in chucks. You also posted that total public debt is 17,287,251,611,151.62. I also say, given current macroeconomic conditions, so what? US public debt simply represents the total savings of the US economy - or the propensity of the private sector to save. If people correctly referred to it as national savings or equity, it would clear up a TON of confusion.

So in your world debt equals savings. No wonder your plan for getting rich is to max out 17 credit cards.

 

[Kimura]

Why should we care if the Chinese hold 1,2, or even 3 trillion in US Treasuries?

Because eventually they will say (in Chinese) "That's enough already!" and stop lending you any more money. And then the US will have to start living within its means. I predict much wailing and nashing of teeth.

ALL Chinese dollars come from the US. They don't lend us our own fiat, nor do they have a dollar factory in Hong Kong. They obtain US $$$$ from net exports to the US which end up at the Bank of China. They then convert their US $$$$ to US Treasuries which is nothing more than a balance sheet operation, consisting of a series of debits and credits, between the Bank of China's reserve account and securities accounts at the FED.

Let's say China dumps their US Treasuries. They then exchange them for reserves at the FED. The only way to shed their dollar holdings would be to purchases real goods, services, and productive assets from Americans. The dollar may actually appreciate under such a scenario where Chinese demand for US goods and services increases.

 

[Kimura]

Answer this question: when will you be getting out of the 'nervous hospital'?



OK, moron.....was the OP restricted to news about China....or was that part where your A.D.D. kicked in?



I'd rather tie you to a railroad track....but let's put you on the right track: re-read the title of the thread.

Good.

Now get a dictionary.....

I usually like to deal with your posts in chucks. You also posted that total public debt is 17,287,251,611,151.62. I also say, given current macroeconomic conditions, so what? US public debt simply represents the total savings of the US economy - or the propensity of the private sector to save. If people correctly referred to it as national savings or equity, it would clear up a TON of confusion.

So in your world debt equals savings. No wonder your plan for getting rich is to max out 17 credit cards.

No, there is world of difference between a currency issuer and currency users, such as households and firms.

 

[jasonnfree]

Why should we care if the Chinese hold 1,2, or even 3 trillion in US Treasuries?

Because eventually they will say (in Chinese) "That's enough already!" and stop lending you any more money. And then the US will have to start living within its means. I predict much wailing and nashing of teeth.

ALL Chinese dollars come from the US. They don't lend us our own fiat, nor do they have a dollar factory in Hong Kong. They obtain US $$$$ from net exports to the US which end up at the Bank of China. They then convert their US $$$$ to US Treasuries which is nothing more than a balance sheet operation, consisting of a series of debits and credits, between the Bank of China's reserve account and securities accounts at the FED.

Let's say China dumps their US Treasuries. They then exchange them for reserves at the FED. The only way to shed their dollar holdings would be to purchases real goods, services, and productive assets from Americans. The dollar may actually appreciate under such a scenario where Chinese demand for US goods and services increases.[/QUOT


It's taken some time Kimura but your explanations are starting to make sense.. I like the football stadium example and the dollar factory in Hong Kong. Funny. I'm now a double moron in PC's eyes though. I don't know if I can handle that.