"America is in debt" - To WHOM?? What fool would lend American government money?

[pvsi]

I still did not find an answer to my original OP - lot's of trolling. No Answer.

 

[JWBooth]

Will those who believe my (US) government owes them money, or anything else please stand up? If I would have a president representing me, or if I would be an American leader who represents Americans, I would round up all these people who claim that my government owes them anything, and hang them for the whole world to see end of story. I also would hang all those who find it inhumane or barbaric, because barbaric is what US puppet government is doing around the world out of desperation and being a whore to international bankers.



XXXXXXXXXXXXXXXX

Everybody who holds a savings bond is owed money.

 

[The Rabbi]

I've got a government bond right now that says the gov't promises to pay me. So they dont owe me? Are they lying?
Or do you not know what you're talking about?

Bonds and cash are effectively the same thing - both are liabilities of the federal government and assets of the non-government. The $$$$ they "owe" you consists of nothing more than dollar deposits at the FED. Whether's it one dollar or twenty trillion dollars, it can never become a financial strain for the federal government. It boils down to debiting one type of account and crediting another. You now know more than 99% of the dimwits in Congress and staffers at the CBO. Congrats.

Kimura's explanation used to be oversimplified, but now it is literally correct. I can go to Treasury Direct - Under Construction, log into my account and redeem any Treasury security I own, and the money will be in my bank account in the morning, depending on how long my bank wants to take. If you doubt me, open an account, buy a savings bond online, and test it yourself.

How did you pay for the savings bond?
Oops.

 

[oldfart]

bonds and cash are effectively the same thing - both are liabilities of the federal government and assets of the non-government. The $$$$ they "owe" you consists of nothing more than dollar deposits at the fed. Whether's it one dollar or twenty trillion dollars, it can never become a financial strain for the federal government. It boils down to debiting one type of account and crediting another. You now know more than 99% of the dimwits in congress and staffers at the cbo. Congrats.

kimura's explanation used to be oversimplified, but now it is literally correct. I can go to treasury direct - under construction, log into my account and redeem any treasury security i own, and the money will be in my bank account in the morning, depending on how long my bank wants to take. If you doubt me, open an account, buy a savings bond online, and test it yourself.

how did you pay for the savings bond?
Oops.

Touche!

 

[Kimura]

Bonds and cash are effectively the same thing - both are liabilities of the federal government and assets of the non-government. The $$$$ they "owe" you consists of nothing more than dollar deposits at the FED. Whether's it one dollar or twenty trillion dollars, it can never become a financial strain for the federal government. It boils down to debiting one type of account and crediting another. You now know more than 99% of the dimwits in Congress and staffers at the CBO. Congrats.

Kimura's explanation used to be oversimplified, but now it is literally correct. I can go to Treasury Direct - Under Construction, log into my account and redeem any Treasury security I own, and the money will be in my bank account in the morning, depending on how long my bank wants to take. If you doubt me, open an account, buy a savings bond online, and test it yourself.

How did you pay for the savings bond?


Oops.

With $$$$ that was spent into existence by the central bank. The FED creates $$$$ by crediting bank accounts. In other words, the government must spend $$$$ into existence before any taxes can be paid or "borrowing" occurs.

Where do you think the $$$$ sitting in reserve accounts come from?

 

[Kimura]

I still did not find an answer to my original OP - lot's of trolling. No Answer.

That wasn't my intention, sorry.

 

[JimmieD]

Will those who believe my (US) government owes them money, or anything else please stand up?

I'm owed things. I have SS promises and I own some Treasuries and Agency MBS's. I also own US Dollars which I'm promised can be used to pay for goods, services and taxes.

I still did not find an answer to my original OP - lot's of trolling. No Answer.

Oh, I assumed this was trolling and wasn't expecting an answer:

If I would have a president representing me, or if I would be an American leader who represents Americans, I would round up all these people who claim that my government owes them anything, and hang them for the whole world to see end of story. I also would hang all those who find it inhumane or barbaric, because barbaric is what US puppet government is doing around the world out of desperation and being a whore to international bankers.

 

[The Rabbi]

Kimura's explanation used to be oversimplified, but now it is literally correct. I can go to Treasury Direct - Under Construction, log into my account and redeem any Treasury security I own, and the money will be in my bank account in the morning, depending on how long my bank wants to take. If you doubt me, open an account, buy a savings bond online, and test it yourself.

How did you pay for the savings bond?


Oops.

With $$$$ that was spent into existence by the central bank. The FED creates $$$$ by crediting bank accounts. In other words, the government must spend $$$$ into existence before any taxes can be paid or "borrowing" occurs.

Where do you think the $$$$ sitting in reserve accounts come from?

Wrong.
You're just talking out of your ass. You have no fucking clue about any of this. A total waste of time and bandwidth.
Thanks for playing.

 

[Kimura]

How did you pay for the savings bond?


Oops.

With $$$$ that was spent into existence by the central bank. The FED creates $$$$ by crediting bank accounts. In other words, the government must spend $$$$ into existence before any taxes can be paid or "borrowing" occurs.

Where do you think the $$$$ sitting in reserve accounts come from?

Wrong.
You're just talking out of your ass. You have no fucking clue about any of this. A total waste of time and bandwidth.
Thanks for playing.

I'm absolutely 100% correct. Ask any staffer worth their salt at the FED or Treasury. By the way, when I came back to the US after university, my first gig was interning at Treasury. This is what made me interested in finance to begin with.

Moving along....

In order for you or I to obtain $$$$, the federal government must spend first before $$$$ can be used to extinguish tax obligations or any of this alleged "borrowing" occurs. If we look at loans, for example, from the FED, I'm absolutely correct. Any and ALL settlements from tax payments AND/OR bond auctions can only emanate from RESERVE accounts. Period. End of story. From an operational standpoint, the various balances from reserve accounts only exist due to PREVIOUS government deficits, which are simply CREDITS to reserve accounts or loans from the Federal Reserve. The FED will facilitate these loans by repos, loans, or through purchasing private securities.

The bottom line: there had to have been previous government spending at some point to settle any and all tax payments and/or bond sales.

 

[Bombur]

With $$$$ that was spent into existence by the central bank. The FED creates $$$$ by crediting bank accounts. In other words, the government must spend $$$$ into existence before any taxes can be paid or "borrowing" occurs.

Where do you think the $$$$ sitting in reserve accounts come from?

Wrong.
You're just talking out of your ass. You have no fucking clue about any of this. A total waste of time and bandwidth.
Thanks for playing.

I'm absolutely 100% correct. Ask any staffer worth their salt at the FED or Treasury. By the way, when I came back to the US after university, my first gig was interning at Treasury. This is what made me interested in finance to begin with.

Moving along....

If in order for you or I to obtain $$$$, the federal government must spend first before $$$$ can be used to extinguish tax obligations or any of this alleged "borrowing" occurs. If we look at loans, for example, from the FED, I'm absolutely correct. Any and ALL settlements from tax payments AND/OR bond auctions can only emanate from RESERVE accounts. Period. End of story. From an operational standpoint, the various balances from reserve accounts only exist due to PREVIOUS government deficits, which are simply CREDITS to reserve accounts or loans from the Federal Reserve. The FED will facilitate these loans by repos, loans, or through purchasing private securities.

The bottom line: there had to have been previous government spending at some point to settle any and all tax payments and/or bond sales.

It is not that you are wrong but that you are playing a shell game with facts and distorting reality to the point that you are wildly over stating your position. When pressed on your position you limit the argument to only that which you want to talk about.

The bottom line is that when the government spends money it is either borrowing, taxing, or printing. You can't simply focus on one of those three and ignore the others because they don't fit your argument.

The origination of money is largely immaterial to the actual impact government debt has on the economy today.

 

[Rshermr]

With $$$$ that was spent into existence by the central bank. The FED creates $$$$ by crediting bank accounts. In other words, the government must spend $$$$ into existence before any taxes can be paid or "borrowing" occurs.

Where do you think the $$$$ sitting in reserve accounts come from?

Wrong.
You're just talking out of your ass. You have no fucking clue about any of this. A total waste of time and bandwidth.
Thanks for playing.

I'm absolutely 100% correct. Ask any staffer worth their salt at the FED or Treasury. By the way, when I came back to the US after university, my first gig was interning at Treasury. This is what made me interested in finance to begin with.

Moving along....

In order for you or I to obtain $$$$, the federal government must spend first before $$$$ can be used to extinguish tax obligations or any of this alleged "borrowing" occurs. If we look at loans, for example, from the FED, I'm absolutely correct. Any and ALL settlements from tax payments AND/OR bond auctions can only emanate from RESERVE accounts. Period. End of story. From an operational standpoint, the various balances from reserve accounts only exist due to PREVIOUS government deficits, which are simply CREDITS to reserve accounts or loans from the Federal Reserve. The FED will facilitate these loans by repos, loans, or through purchasing private securities.

The bottom line: there had to have been previous government spending at some point to settle any and all tax payments and/or bond sales.

You have provided a real service in educating folks about the workings of the fed. Fact is, many prefer to believe dogma. You provide fact. And unfortunately, get attacked for providing the truth. My thanks. And sorry for the inevitable attacks of the trolls.
I have NO problem with arguments that some may have with your explanations. What I have problems with is the lack of ability to converse, and to learn from that which is obvious. And the unfounded insults they throw your way.

 

[Rshermr]

Wrong.
You're just talking out of your ass. You have no fucking clue about any of this. A total waste of time and bandwidth.
Thanks for playing.

I'm absolutely 100% correct. Ask any staffer worth their salt at the FED or Treasury. By the way, when I came back to the US after university, my first gig was interning at Treasury. This is what made me interested in finance to begin with.

Moving along....

If in order for you or I to obtain $$$$, the federal government must spend first before $$$$ can be used to extinguish tax obligations or any of this alleged "borrowing" occurs. If we look at loans, for example, from the FED, I'm absolutely correct. Any and ALL settlements from tax payments AND/OR bond auctions can only emanate from RESERVE accounts. Period. End of story. From an operational standpoint, the various balances from reserve accounts only exist due to PREVIOUS government deficits, which are simply CREDITS to reserve accounts or loans from the Federal Reserve. The FED will facilitate these loans by repos, loans, or through purchasing private securities.

The bottom line: there had to have been previous government spending at some point to settle any and all tax payments and/or bond sales.

It is not that you are wrong but that you are playing a shell game with facts and distorting reality to the point that you are wildly over stating your position. When pressed on your position you limit the argument to only that which you want to talk about.

The bottom line is that when the government spends money it is either borrowing, taxing, or printing. You can't simply focus on one of those three and ignore the others because they don't fit your argument.

The origination of money is largely immaterial to the actual impact government debt has on the economy today.

How about a little more than your opinion. Link something that proves what you are saying. Try a statement backed by proof. Or do you simply prefer to throw insults?
Try conversation instead of invective. Amazing how much you can learn.

 

[Kimura]

It is not that you are wrong but that you are playing a shell game with facts and distorting reality to the point that you are wildly over stating your position. When pressed on your position you limit the argument to only that which you want to talk about.

I've actually gotten into a good amount of detail.

The bottom line is that when the government spends money it is either borrowing, taxing, or printing. You can't simply focus on one of those three and ignore the others because they don't fit your argument.

Again, from whom does the US borrow? As a currency issuer, it doesn't borrow its own fiat. Other countries, firms, and individuals desire to save in US government financial assets, that's about it.

Taxes really don't fund federal expenditures on an operational level, this should be pretty obvious, since the monetary circuit doesn't operate like a recycling plant. Tax payments are basically a way of unprinting $$$$. The federal government utilizes taxes as a way to a) control inflation and b) regulate aggregate demand.

The term printing money really doesn't apply under a fiat monetary system. ALL government spending is essentially "printing money" since we're no longer on a convertible currency. Even the very existence of bonds is no longer necessary from an operational standpoint, they're a vestigial leftover from the gold standard and a legal requirement.

The origination of money is largely immaterial to the actual impact government debt has on the economy today.

It's not debt in the traditional sense, since the federal government is a currency issuer not a currency user (household). The national debt actually represents the total savings of the US economy or the propensity of the private sector to save.

If the "national debt" bothers you, you should support legislation to eliminate the issuance of US government securities. In their current capacity, all they do is function as a mechanism to drain excess reserves from the banking system.

 

[Bombur]

I'm absolutely 100% correct. Ask any staffer worth their salt at the FED or Treasury. By the way, when I came back to the US after university, my first gig was interning at Treasury. This is what made me interested in finance to begin with.

Moving along....

If in order for you or I to obtain $$$$, the federal government must spend first before $$$$ can be used to extinguish tax obligations or any of this alleged "borrowing" occurs. If we look at loans, for example, from the FED, I'm absolutely correct. Any and ALL settlements from tax payments AND/OR bond auctions can only emanate from RESERVE accounts. Period. End of story. From an operational standpoint, the various balances from reserve accounts only exist due to PREVIOUS government deficits, which are simply CREDITS to reserve accounts or loans from the Federal Reserve. The FED will facilitate these loans by repos, loans, or through purchasing private securities.

The bottom line: there had to have been previous government spending at some point to settle any and all tax payments and/or bond sales.

It is not that you are wrong but that you are playing a shell game with facts and distorting reality to the point that you are wildly over stating your position. When pressed on your position you limit the argument to only that which you want to talk about.

The bottom line is that when the government spends money it is either borrowing, taxing, or printing. You can't simply focus on one of those three and ignore the others because they don't fit your argument.

The origination of money is largely immaterial to the actual impact government debt has on the economy today.

How about a little more than your opinion. Link something that proves what you are saying. Try a statement backed by proof. Or do you simply prefer to throw insults?
Try conversation instead of invective. Amazing how much you can learn.

He wants to keep focusing on the mechanics of operations while ignoring economic impacts.

When he does talk about economic impacts he limits the discussion to the specific circumstances where he is correct and ignores the entire reality of the situation.

When I say he is playing a shell game I am saying that he is limiting the truth to only what he wants to show at any given point. Essentially lifting up only one of three shells and revealing the "truth" while hiding what is under the other two shells.

When pressed on what is under the other two shells he tries to confuse the argument only to limit the truth once again. I don't know if this is intentional or not but I am insulted by it. It is obfuscation of a simple issue.

 

[Kimura]

Wrong.
You're just talking out of your ass. You have no fucking clue about any of this. A total waste of time and bandwidth.
Thanks for playing.

I'm absolutely 100% correct. Ask any staffer worth their salt at the FED or Treasury. By the way, when I came back to the US after university, my first gig was interning at Treasury. This is what made me interested in finance to begin with.

Moving along....

In order for you or I to obtain $$$$, the federal government must spend first before $$$$ can be used to extinguish tax obligations or any of this alleged "borrowing" occurs. If we look at loans, for example, from the FED, I'm absolutely correct. Any and ALL settlements from tax payments AND/OR bond auctions can only emanate from RESERVE accounts. Period. End of story. From an operational standpoint, the various balances from reserve accounts only exist due to PREVIOUS government deficits, which are simply CREDITS to reserve accounts or loans from the Federal Reserve. The FED will facilitate these loans by repos, loans, or through purchasing private securities.

The bottom line: there had to have been previous government spending at some point to settle any and all tax payments and/or bond sales.

You have provided a real service in educating folks about the workings of the fed. Fact is, many prefer to believe dogma. You provide fact. And unfortunately, get attacked for providing the truth. My thanks. And sorry for the inevitable attacks of the trolls.
I have NO problem with arguments that some may have with your explanations. What I have problems with is the lack of ability to converse, and to learn from that which is obvious. And the unfounded insults they throw your way.

I enjoy debates, but sometimes the insults can be a little douchy. I rather talk about labor theory, which is my main interest, as opposed to having to rehash monetary operations and how the loanable funds model simply isn't based in reality.

 

[Kimura]

When he does talk about economic impacts he limits the discussion to the specific circumstances where he is correct and ignores the entire reality of the situation.

I'm completely in touch with reality. It's members of Congress that are clueless, with the various retarded statements being made by these people. When a member of Congress says the US is broke, I can't take him or her seriously, which includes our President. It's tantamount to be a member of the Flat Earth Society.

When I say he is playing a shell game I am saying that he is limiting the truth to only what he wants to show at any given point. Essentially lifting up only one of three shells and revealing the "truth" while hiding what is under the other two shells.

When pressed on what is under the other two shells he tries to confuse the argument only to limit the truth once again. I don't know if this is intentional or not but I am insulted by it. It is obfuscation of a simple issue.

What are you talking about? People on here that know I never play shell games. Whether it's monetary operations, the markets, balance sheets, micro/macro, labor theory, etc. I'm always honest and try to articulate my points.

 

[Bombur]

It is not that you are wrong but that you are playing a shell game with facts and distorting reality to the point that you are wildly over stating your position. When pressed on your position you limit the argument to only that which you want to talk about.

I've actually gotten into a good amount of detail.

The bottom line is that when the government spends money it is either borrowing, taxing, or printing. You can't simply focus on one of those three and ignore the others because they don't fit your argument.

Again, from whom does the US borrow? As a currency issuer, it doesn't borrow its own fiat. Other countries, firms, and individuals desire to save in US government financial assets, that's about it.

Taxes really don't fund federal expenditures on an operational level, this should be pretty obvious, since the monetary circuit doesn't operate like a recycling plant. Tax payments are basically a way of unprinting $$$$. The federal government utilizes taxes as a way to a) control inflation and b) regulate aggregate demand.

The term printing money really doesn't apply under a fiat monetary system. ALL government spending is essentially "printing money" since we're no longer on a convertible currency. Even the very existence of bonds is no longer necessary from an operational standpoint, they're a vestigial leftover from the gold standard and a legal requirement.

The origination of money is largely immaterial to the actual impact government debt has on the economy today.

It's not debt in the traditional sense, since the federal government is a currency issuer not a currency user (household). The national debt actually represents the total savings of the US economy or the propensity of the private sector to save.

If the "national debt" bothers you, you should support legislation to eliminate the issuance of US government securities. In their current capacity, all they do is function as a mechanism to drain excess reserves from the banking system.

You are once again trying to hide the nature of reality behind the mechanics. "Printing money" is just a simple way to refer to the act of issuing currency. For the purposes of the conversation there is really little to no material difference IMO but I will use whatever term you think is most accurate.

All spending is balanced against taxation and borrowing from the private sector and "issue currency". I will take it as a fact that the US at this point in time could issue more currency with little to no harmful effect. That act of issuing currency is considered independent of any increase or decrease in current borrowing behavior because issuing currency is determined based on the inflation concerns.

Borrowing and Taxation are balanced against spending to create financial concerns. This is done purposefully by our government and for good reason.

You keep combining the two acts and justify this by looking at the mechanics. In reality the two are segregated on purpose to avoid exactly what you are doing because it hides the financial implications of borrowing and taxation behind the power of issuing currency. When you limit the issue to essentially this moment in time you ignore any potential future implications of carrying debt.

You are clearly a smart guy but you are over playing your hand. If you really wanted I am sure you could argue against your own points better than I could.

 

[Kimura]

All spending is balanced against taxation and borrowing from the private sector and "issue currency". I will take it as a fact that the US at this point in time could issue more currency with little to no harmful effect. That act of issuing currency is considered independent of any increase or decrease in current borrowing behavior because issuing currency is determined based on the inflation concerns.

Borrowing and Taxation are balanced against spending to create financial concerns. This is done purposefully by our government and for good reason.

I just explained it. Spending precedes all tax payments and "borrowing". Again, from whom does the US borrow? Who lends the federal government its own fiat?

You keep combining the two acts and justify this by looking at the mechanics. In reality the two are segregated on purpose to avoid exactly what you are doing because it hides the financial implications of borrowing and taxation behind the power of issuing currency. When you limit the issue to essentially this moment in time you ignore any potential future implications of carrying debt.

You are clearly a smart guy but you are over playing your hand. If you really wanted I am sure you could argue against your own points better than I could.

In my analysis, I merge the accounting of the FED, Treasury, and national government. This consolidation demonstrates and proves that debts between the FED and Treasury are essentially netted out so to speak. Although we can the separate the FED and Treasury for legal reasons, they don't have any economic bearing on external entities. My analysis eliminates the institutional BS that's ultimately inconsequential. I may start a thread on this at a later time.

 

[Bombur]

All spending is balanced against taxation and borrowing from the private sector and "issue currency". I will take it as a fact that the US at this point in time could issue more currency with little to no harmful effect. That act of issuing currency is considered independent of any increase or decrease in current borrowing behavior because issuing currency is determined based on the inflation concerns.

Borrowing and Taxation are balanced against spending to create financial concerns. This is done purposefully by our government and for good reason.

I just explained it. Spending precedes all tax payments and "borrowing". Again, from whom does the US borrow? Who lends the federal government its own fiat?

You keep combining the two acts and justify this by looking at the mechanics. In reality the two are segregated on purpose to avoid exactly what you are doing because it hides the financial implications of borrowing and taxation behind the power of issuing currency. When you limit the issue to essentially this moment in time you ignore any potential future implications of carrying debt.

You are clearly a smart guy but you are over playing your hand. If you really wanted I am sure you could argue against your own points better than I could.

In my analysis, I merge the accounting of the FED, Treasury, and national government. This consolidation demonstrates and proves that debts between the FED and Treasury are essentially netted out so to speak. Although we can the separate the FED and Treasury for legal reasons, they don't have any economic bearing on external entities. My analysis eliminates the institutional BS that's ultimately inconsequential. I may start a thread on this at a later time.

Are you suggesting Congress control monetary policy directly or that the Fed Reserve have more power to control the creation and destruction of currency?

Either way the people making those decisions is not really the issue and neither is the accounting. I have never argued with your assessment of the accounting btw, I just find the analysis immaterial.

In the end you still have a formula with dependent variables. The capacity to issue currency is dependent on inflation. IMO you are essentially trying to merge this variable with the borrowing and taxation variables in an attempt to establish that if there is capacity to issue more currency there is capacity to increase borrowing or decrease taxation. Alternatively I would consider the two as being segregated as the decision to issue more currency should be largely based on inflationary implications and taxation/spending/borrowing should be based on cost benefit analysis.

Inflationary conditions change and the impact of borrowing yesterday has most certainly impacted our spending today.

 

[Kimura]

Are you suggesting Congress control monetary policy directly or that the Fed Reserve have more power to control the creation and destruction of currency?

Here's my point: the Treasury doesn't "borrow" from the Federal Reserve in any real sense of the word or what out leaders and media pundits imply. They seem to imply that the FED has some source of $$$$ not available to the Treasury, and that the Federal Reserve lends $$$$ to the Treasury at some market price or something. This is utterly crazy talk. All the FED does is provide a monetary basis for Treasury's fiscal policy.

Either way the people making those decisions is not really the issue and neither is the accounting. I have never argued with your assessment of the accounting btw, I just find the analysis immaterial.

If you found the accounting logic sound, why would you say the federal government has to borrow its own fiat?

In the end you still have a formula with dependent variables. The capacity to issue currency is dependent on inflation. IMO you are essentially trying to merge this variable with the borrowing and taxation variables in an attempt to establish that if there is capacity to issue more currency there is capacity to increase borrowing or decrease taxation. Alternatively I would consider the two as being segregated as the decision to issue more currency should be largely based on inflationary implications and taxation/spending/borrowing should be based on cost benefit analysis.

Inflationary conditions change and the impact of borrowing yesterday has most certainly impacted our spending today.

Spending is only a political decision.

For example, from a macroeconomic perspective, the federal government should base its spending and taxing decisions to ensure that total net spending in the overall economy is enough to produce a sufficient level of real output at which any and all firms employ any and all available labor. Logically, in my opinion, budgets should revolve around this goal.

I'm NOT saying deficits don't matter as some have tried to imply. Yes, the only risk is inflation, not insolvency, as many on this board don't seem to understand no matter how many times I walk them through it. With that being said, any type of OVERSPENDING can lead to inflation whether it's exports, consumption, investments, or government spending. Increased government spending isn't always the culprit.

I totally realize that budget deficits can become excessive and they can also be extremely deficient, such as is the case over the last eight years. Budget deficits can be too small or too large, the goal of the federal government should be to get them just right as to employ and and all productive capacity.