Legislatures know jack shit about the modern economy and still believe we have to collect federal tax revenue to "pay for stuff."
It's all politics and fear mongering to get votes, democrats blame republicans for deficits and it goes the other way.. Meanwhile, deficits aren't harmful at all when we're not at maximum productivity.
Dude, do you know what the debt is?
Tell me that before we continue.
The national debt is like any other debt be it in government or your household.
When you spend more money than you take in, that creates debt.
BWHAHAHAHAHAHAHHAHA.
I'm sorry, this is one of the most widespread lies that dominates the discussion. It's false.
Why public debt is not like credit card debt
Most important, this credit-card metaphor is a totally false analogy because, unlike a consumer on a spending spree who later has to pay the piper, government’s borrowing strategy directly affects economic growth. When deficit spending helps increase growth, that, in turn, makes the debt less burdensome. The Federal Reserve also has the power to buy public debt ‑ a prerogative not available to consumers.
The U.S. economy has vast productive potential that remains idle in a deep recession. When everyone who wants a job has one, and people use their purchasing power to buy goods and services, the economy is maximizing that potential.
When the economy is in a prolonged slump, however, there are literally trillions of dollars’ worth of idle people, factories, buildings and purveyors of services.
The worst slumps typically occur after a financial collapse – true for both 1929 and 2008 – because so much asset value is wiped out. The whole economy goes into a self-reinforcing tailspin.
Employers are then too risk-averse to hire enough workers, consumers are too traumatized to buy everything the economy is capable of producing, banks are awash in money but won’t lend to any but the most blue-chip borrowers. The whole economy remains stuck in second gear.
That’s where government borrowing comes in. Unlike private credit-card debt, public borrowing can improve a depressed economy’s performance.
Let me find a post I made in regards to china, it will help clear some things up about that as well.
Here it is:
Let's take china, for example.
China does not issue US dollars.
China must find a way to earn our dollars if it wishes to net save in our dollars.
How does it do this? Go to walmart and see for yourself.
Same thing with Japan.
China sells stuff to us in exchange for US dollars.
I really hope you aren't one of those people who think china is "loaning" us anything. Oh god..
The next step in all of this is china putting money in a bank account at the reserve. This account doesn't pay interest. So, china decides: "Hey, I should get some treasury bonds and earn some interest on my HARD EARNED UNITED STATES DOLLARS."
We accommodate them and other countries for one obvious reason, and you should be able to figure it out.
(Oh, we can never default on the debt by the way, it's impossible for a nation that can create dollars from thin air
)
So here's the reality: For all of the benefits we get from china/japan/etc, they get a PAPER BANK STATEMENT. Yes, my friend, this is what the politicians are claiming is going to kill us all. IT'S NOT EVEN DENOMINATED IN A CURRENCY that most of these nations can even spend in their own country. They have to either spend the dollars here in the US, which helps us out, or where someone will accept our dollars. They can leave them in savings, or they can convert at their own expense. You bring up a valid point: "How the hell do we pay the interest? Our kids are going to die!"
When the dreaded doomsday scenario finally happens, the federal reserve will move china's hard earned dollars from their "savings" account back to their "checking account." It will go into the "checking account" with the number raised a bit. Boom, we're done. Problem solved. The federal reserve types a number and it's done. It's an accounting record. That's all the national debt is.
