An observation.

[g5000]

Now let's return to this naive crap:

Here's the thing. Our debt is, what, $19 trillion? Give or take.

People like Dovahkiin think we can just print $19 trillion to pay off the debt without any consequences.

These rubes who claim "it's impossible to default" are ignorant of the fact there are six ways for a state to reduce its debt.

1. Grow the economy. A growing economy means increased revenues. Simple enough.

2. Internal devaluation. Keep wages low to make your production costs competitive with other countries.

3. External devaluation. Make your money lose its value. The most common way to achieve this is through inflation, but you can also depeg your currency from a fixed exchange rate and just declare its new value.

4. Renegotiate a lower interest rate with your creditors.

5. Raise taxes/cut spending.

6. Default.


A default is when you pay back less than you owe and call it good. Follow me so far?

The money we would be using to pay back our debts with the $19 trillion we printed would be worth much less than the money our debtors loaned to us.

That's a technical default.

Why is that? Because adding $19,000,000,000,000 to the money supply is some serious external devaluation.

You act like federal taxes actually fund things.

It's not fairy dust that paid for the interstate.

The 70's changed that.

Ah, you see? I KNEW you were one of those!

A gold bug.

I don't enjoy gold humpers. We're a fiat regime now.

Yes, we have a fiat currency. And it works a lot better than the gold standard did. Far less frequent recessions, and of much shorter duration.

 

[Dovahkiin]

I always hear people claim that the government "CAN'T" create dollars from thin air. This is wrong, of course, but it leads me to think about something else: The Iraq War. Did the government have any trouble coming up with the trillions needed for that war? Did we all have to "tighten our belts and kick in?" Of course not. So where did the government get the money?

They borrowed it.

Duh.

Borrowed from who?
How the hell does the us government borrow its own currency? And again, from who?

China, Japan, Great Britain, et al., sovereign funds, mutual funds, hedge funds, trust funds, endowment funds, the man in the street, and the Federal Reserve.

Again, you don't understand what "borrowing means."

It's pretty clear you don't.

Keep using "borrowing." I enjoy a good laugh.

 

[Dovahkiin]

You act like federal taxes actually fund things.

It's not fairy dust that paid for the interstate.

The 70's changed that.

Ah, you see? I KNEW you were one of those!

A gold bug.

I don't enjoy gold humpers. We're a fiat regime now.

Yes, we have a fiat currency. And it works a lot better than the gold standard did. Far less frequent recessions, and of much shorter duration.

And the us government can now freely spend. Inflation is not an issue until we get near maximum output.

 

[Dovahkiin]

You act like federal taxes actually fund things.

It's not fairy dust that paid for the interstate.

The 70's changed that.

Ah, you see? I KNEW you were one of those!

A gold bug.

I don't enjoy gold humpers. We're a fiat regime now.

Yes, we have a fiat currency. And it works a lot better than the gold standard did. Far less frequent recessions, and of much shorter duration.

You quote reagan..
And are afraid of the debt.. don't forget the past:

Meanwhile, the longest period without a recession was from November, 1982 to July, 1990.

The Republicans who now praise that "Reagan boom" never refer to the deficits or blame the Democratic Congress, while Democrats repeatedly attack "Reagan deficits." Neither side seems aware that a steep rise in deficits began in 1981, preceding the "boom" by almost two years.

When deficit reductions finally began in 1987, they paved the way for the next recession. Political irony is everywhere.

Hmm...

 

[Dovahkiin]

Now let's return to this naive crap:

We can "print" our own currency, it's impossible to default on the debt.

Here's the thing. Our debt is, what, $19 trillion? Give or take.

People like Dovahkiin think we can just print $19 trillion to pay off the debt without any consequences.

These rubes who claim "it's impossible to default" are ignorant of the fact there are six ways for a state to reduce its debt.

1. Grow the economy. A growing economy means increased revenues. Simple enough.

2. Internal devaluation. Keep wages low to make your production costs competitive with other countries.

3. External devaluation. Make your money lose its value. The most common way to achieve this is through inflation, but you can also depeg your currency from a fixed exchange rate and just declare its new value.

4. Renegotiate a lower interest rate with your creditors.

5. Raise taxes/cut spending.

6. Default.


A default is when you pay back less than you owe and call it good. Follow me so far?

The money we would be using to pay back our debts with the $19 trillion we printed would be worth much less than the money our debtors loaned to us.

That's a technical default.

Why is that? Because adding $19,000,000,000,000 to the money supply is some serious external devaluation.

The money we would be using to pay back our debts with the $19 trillion we printed would be worth much less than the money our debtors loaned to us.

That's not how reality works. We're never going to be "paying off" 19 trillion at one time by "printing."

 

[Dovahkiin]

So let me make this clear:
The treasury puts up the schedule of note/bond sales, and BANKS clamor to get bids in. This is borrowing?

 

[TemplarKormac]

I always hear people claim that the government "CAN'T" create dollars from thin air.

It can. It does it every day.

It's good to know that you recognize this. Tell that to others.. Then you can move on to why the debt is not a problem.

LOL

You seem to think that printing more money will pay down our debt! What planet do you hail from?

How do you believe it works?
We can "print" our own currency, it's impossible to default on the debt.

Wow. I am taken aback by the sheer stupidity of this post.

 

[Dovahkiin]

I always hear people claim that the government "CAN'T" create dollars from thin air.

It can. It does it every day.

It's good to know that you recognize this. Tell that to others.. Then you can move on to why the debt is not a problem.

LOL

You seem to think that printing more money will pay down our debt! What planet do you hail from?

How do you believe it works?
We can "print" our own currency, it's impossible to default on the debt.

Wow. I am taken aback by the sheer stupidity of this post.

Please cite an example of a sovereign nation using non-convertible, non-pegged, free- floating currency that has defaulted on debt denominated in their currency.
It Is Impossible For The US To Default

We could choose to do so, just as a person trapped in a warehouse full of food could choose to starve, but we could never be forced to. This is not a theory or conjecture, it is cold, hard fact. The reason the US could never be forced to default is that every single bit of the debt is owed in the currency that we and only we can issue: dollars. Unlike Greece, we don’t have to try to earn foreign exchange via exports or beg for better terms. There is simply no level of debt we could not repay with a keystroke.

Don’t take my word for it. Here are just a few folks from across the political spectrum and in different walks of life saying the same thing:

“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.” Alan Greenspan

“In the case of United States, default is absolutely impossible. All U.S. government debt is denominated in U.S. dollar assets.” Peter Zeihan, Vice President of Analysis for STRATFOR

“In the case of governments boasting monetary sovereignty and debt denominated in its own currency, like the United States (but also Japan and the UK), it is technically impossible to fall into debt default.” Erwan Mahe, European asset allocation and options strategies adviser

“There is never a risk of default for a sovereign nation that issues its own free-floating currency and where its debts are denominated in that currency.” Mike Norman, Chief Economist for John Thomas Financial

“There is no inherent limit on federal expenses and therefore on federal spending…When the U.S. government decides to spend fiat money, it adds to its banking reserve system and when it taxes or borrows (issues Treasury securities) it drains reserves from its banking system. These reserve operations are done solely to maintain the target Federal Funds rate.” Monty Agarwal , managing partner and chief investment officer of MA Managed Futures Fund

“As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.” Federal Reserve Bank of St. Louis

“A sovereign government can always make payments as they come due by crediting bank accounts — something recognized by Chairman Ben Bernankewhen he said the Fed spends by marking up the size of the reserve accounts of banks.” L. Randall Wray, Professor of Economics at the University of Missouri-Kansas City and a Senior Scholar at the Levy Economics Institute

 

[Dovahkiin]

I always hear people claim that the government "CAN'T" create dollars from thin air.

It can. It does it every day.

It's good to know that you recognize this. Tell that to others.. Then you can move on to why the debt is not a problem.

LOL

You seem to think that printing more money will pay down our debt! What planet do you hail from?

How do you believe it works?
We can "print" our own currency, it's impossible to default on the debt.

Wow. I am taken aback by the sheer stupidity of this post.

If you have trouble understanding, step back and think about what the debt actually is.

 

[TemplarKormac]

It can. It does it every day.

It's good to know that you recognize this. Tell that to others.. Then you can move on to why the debt is not a problem.

LOL

You seem to think that printing more money will pay down our debt! What planet do you hail from?

How do you believe it works?
We can "print" our own currency, it's impossible to default on the debt.

Wow. I am taken aback by the sheer stupidity of this post.

If you have trouble understanding, step back and think about what the debt actually is.

I know what debt is. I am astounded at how incredibly stupid your reasoning is.

I used to be uneducated like you, but then I took common sense to the knee.

 

[Dovahkiin]

It's good to know that you recognize this. Tell that to others.. Then you can move on to why the debt is not a problem.

LOL

You seem to think that printing more money will pay down our debt! What planet do you hail from?

How do you believe it works?
We can "print" our own currency, it's impossible to default on the debt.

Wow. I am taken aback by the sheer stupidity of this post.

If you have trouble understanding, step back and think about what the debt actually is.

I know what debt is. I am astounded at how incredibly stupid your reasoning is.

I used to be uneducated like you, but then I took common sense to the knee.

Fine, show me an example of a sovereign nation using non-convertible, non-pegged, free- floating currency that has defaulted on debt denominated in their currency.
Also, please read the forbes link I've sent you.

 

[TemplarKormac]

It can. It does it every day.

It's good to know that you recognize this. Tell that to others.. Then you can move on to why the debt is not a problem.

LOL

You seem to think that printing more money will pay down our debt! What planet do you hail from?

How do you believe it works?
We can "print" our own currency, it's impossible to default on the debt.

Wow. I am taken aback by the sheer stupidity of this post.

Please cite an example of a sovereign nation using non-convertible, non-pegged, free- floating currency that has defaulted on debt denominated in their currency.
It Is Impossible For The US To Default

We could choose to do so, just as a person trapped in a warehouse full of food could choose to starve, but we could never be forced to. This is not a theory or conjecture, it is cold, hard fact. The reason the US could never be forced to default is that every single bit of the debt is owed in the currency that we and only we can issue: dollars. Unlike Greece, we don’t have to try to earn foreign exchange via exports or beg for better terms. There is simply no level of debt we could not repay with a keystroke.

Don’t take my word for it. Here are just a few folks from across the political spectrum and in different walks of life saying the same thing:

“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.” Alan Greenspan

“In the case of United States, default is absolutely impossible. All U.S. government debt is denominated in U.S. dollar assets.” Peter Zeihan, Vice President of Analysis for STRATFOR

“In the case of governments boasting monetary sovereignty and debt denominated in its own currency, like the United States (but also Japan and the UK), it is technically impossible to fall into debt default.” Erwan Mahe, European asset allocation and options strategies adviser

“There is never a risk of default for a sovereign nation that issues its own free-floating currency and where its debts are denominated in that currency.” Mike Norman, Chief Economist for John Thomas Financial

“There is no inherent limit on federal expenses and therefore on federal spending…When the U.S. government decides to spend fiat money, it adds to its banking reserve system and when it taxes or borrows (issues Treasury securities) it drains reserves from its banking system. These reserve operations are done solely to maintain the target Federal Funds rate.” Monty Agarwal , managing partner and chief investment officer of MA Managed Futures Fund

“As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.” Federal Reserve Bank of St. Louis

“A sovereign government can always make payments as they come due by crediting bank accounts — something recognized by Chairman Ben Bernankewhen he said the Fed spends by marking up the size of the reserve accounts of banks.” L. Randall Wray, Professor of Economics at the University of Missouri-Kansas City and a Senior Scholar at the Levy Economics Institute

When you keep raising the debt ceiling, you keep the country from defaulting on it's debt. So, in a way yes. But to think printing money will bring us out of debt is ludicrous.

 

[Dovahkiin]

It's good to know that you recognize this. Tell that to others.. Then you can move on to why the debt is not a problem.

LOL

You seem to think that printing more money will pay down our debt! What planet do you hail from?

How do you believe it works?
We can "print" our own currency, it's impossible to default on the debt.

Wow. I am taken aback by the sheer stupidity of this post.

Please cite an example of a sovereign nation using non-convertible, non-pegged, free- floating currency that has defaulted on debt denominated in their currency.
It Is Impossible For The US To Default

We could choose to do so, just as a person trapped in a warehouse full of food could choose to starve, but we could never be forced to. This is not a theory or conjecture, it is cold, hard fact. The reason the US could never be forced to default is that every single bit of the debt is owed in the currency that we and only we can issue: dollars. Unlike Greece, we don’t have to try to earn foreign exchange via exports or beg for better terms. There is simply no level of debt we could not repay with a keystroke.

Don’t take my word for it. Here are just a few folks from across the political spectrum and in different walks of life saying the same thing:

“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.” Alan Greenspan

“In the case of United States, default is absolutely impossible. All U.S. government debt is denominated in U.S. dollar assets.” Peter Zeihan, Vice President of Analysis for STRATFOR

“In the case of governments boasting monetary sovereignty and debt denominated in its own currency, like the United States (but also Japan and the UK), it is technically impossible to fall into debt default.” Erwan Mahe, European asset allocation and options strategies adviser

“There is never a risk of default for a sovereign nation that issues its own free-floating currency and where its debts are denominated in that currency.” Mike Norman, Chief Economist for John Thomas Financial

“There is no inherent limit on federal expenses and therefore on federal spending…When the U.S. government decides to spend fiat money, it adds to its banking reserve system and when it taxes or borrows (issues Treasury securities) it drains reserves from its banking system. These reserve operations are done solely to maintain the target Federal Funds rate.” Monty Agarwal , managing partner and chief investment officer of MA Managed Futures Fund

“As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.” Federal Reserve Bank of St. Louis

“A sovereign government can always make payments as they come due by crediting bank accounts — something recognized by Chairman Ben Bernankewhen he said the Fed spends by marking up the size of the reserve accounts of banks.” L. Randall Wray, Professor of Economics at the University of Missouri-Kansas City and a Senior Scholar at the Levy Economics Institute

When you keep raising the debt ceiling, you keep the country from defaulting on it's debt. So, in a way yes. But to think printing money will bring us out of debt is ludicrous.

We're talking about defaulting. Not "getting out of debt." That's a horrible idea. You should know that if you know what the debt is.

 

[TemplarKormac]

LOL

You seem to think that printing more money will pay down our debt! What planet do you hail from?

How do you believe it works?
We can "print" our own currency, it's impossible to default on the debt.

Wow. I am taken aback by the sheer stupidity of this post.

If you have trouble understanding, step back and think about what the debt actually is.

I know what debt is. I am astounded at how incredibly stupid your reasoning is.

I used to be uneducated like you, but then I took common sense to the knee.

Fine, show me an example of a sovereign nation using non-convertible, non-pegged, free- floating currency that has defaulted on debt denominated in their currency.
Also, please read the forbes link I've sent you.

One thing you don't understand. If you printed that much money to pay down the debt, you would ruin the economy. Simple concept of printing too much money is that it will devalue your currency. I mean we can print as much money as we want, but in the meantime we will be devaluing our currency and slowly killing our economy.

 

[TemplarKormac]

We're talking about defaulting. Not "getting out of debt." That's a horrible idea.

Seriously? Did you really say that out loud? So you don't want us to get out of debt?

 

[Dovahkiin]

We're talking about defaulting. Not "getting out of debt." That's a horrible idea.

Seriously? Did you really say that out loud? So you don't want us to get out of debt?

Indeed. If anything, we need more deficit spending.
Think big deficits cause recessions

 

[Dovahkiin]

How do you believe it works?
We can "print" our own currency, it's impossible to default on the debt.

Wow. I am taken aback by the sheer stupidity of this post.

If you have trouble understanding, step back and think about what the debt actually is.

I know what debt is. I am astounded at how incredibly stupid your reasoning is.

I used to be uneducated like you, but then I took common sense to the knee.

Fine, show me an example of a sovereign nation using non-convertible, non-pegged, free- floating currency that has defaulted on debt denominated in their currency.
Also, please read the forbes link I've sent you.

One thing you don't understand. If you printed that much money to pay down the debt, you would ruin the economy. Simple concept of printing too much money is that it will devalue your currency. I mean we can print as much money as we want, but in the meantime we will be devaluing our currency and slowly killing our economy.

1.) What makes you think we're going to "pay off" the debt all at once? 2.) What makes you think "printing" by itself devalues currency? We've been doing it for decades.

 

[Agit8r]

I always hear people claim that the government "CAN'T" create dollars from thin air. This is wrong, of course, but it leads me to think about something else: The Iraq War. Did the government have any trouble coming up with the trillions needed for that war? Did we all have to "tighten our belts and kick in?" Of course not. So where did the government get the money? Hm... Remember the recent crisis, did the government have any trouble acquiring the trillions needed to respond to it? No, and taxed didn't really go up either. Think over this if you're one of the people who believes the government can't create dollars from thin air.

They just borrowed that money from China. None of them really care about that, because it was for a cause (Halliburton) that they like.

 

[Dovahkiin]

I always hear people claim that the government "CAN'T" create dollars from thin air. This is wrong, of course, but it leads me to think about something else: The Iraq War. Did the government have any trouble coming up with the trillions needed for that war? Did we all have to "tighten our belts and kick in?" Of course not. So where did the government get the money? Hm... Remember the recent crisis, did the government have any trouble acquiring the trillions needed to respond to it? No, and taxed didn't really go up either. Think over this if you're one of the people who believes the government can't create dollars from thin air.

They just borrowed that money from China. None of them really care about that, because it was for a cause (Halliburton) that they like.

No, they didn't. They literally "created" dollars from thin air. How is this borrowing? The treasury posts the schedule of note/bond sales, and entities clamor to get bids in. China happens to buy bonds. Er, ok? Buying treasuries is functionally equivalent to moving money from a checking account to a savings account. How is this borrowing?

 

[Agit8r]

I always hear people claim that the government "CAN'T" create dollars from thin air. This is wrong, of course, but it leads me to think about something else: The Iraq War. Did the government have any trouble coming up with the trillions needed for that war? Did we all have to "tighten our belts and kick in?" Of course not. So where did the government get the money? Hm... Remember the recent crisis, did the government have any trouble acquiring the trillions needed to respond to it? No, and taxed didn't really go up either. Think over this if you're one of the people who believes the government can't create dollars from thin air.

They just borrowed that money from China. None of them really care about that, because it was for a cause (Halliburton) that they like.

No, they didn't. They literally "created" dollars from thin air. How is this borrowing? The treasury posts the schedule of note/bond sales, and entities clamor to get bids in. China happens to buy bonds. Er, ok? Buying treasuries is functionally equivalent to moving money from a checking account to a savings account. How is this borrowing?

They did have a higher rate of inflation back then, but it still didn't cover the costs of the war. If it had, it wouldn't have been so unAmerican

"With this paper, without taxes the first three years, they fought and baffled one of the most powerful nations in Europe. They hoped, notwithstanding its quantity, to have kept up the value of their paper. In this they were mistaken. It depreciated gradually. But this depreciation though in some circumstances inconvenient, has had the general good and great effect of operating as a tax, and perhaps the most equal of all taxes, since it depreciated in the hands of the holders of money, and thereby taxed them in proportion to the sums they held, and the time they held it, which generally is in proportion to men’s wealth. Thus, after having done it's business, the paper is reduced to the sixtieth part of its original value"
-- Benjamin Franklin; from letter to Thomas Ruston (Oct. 9, 1780)