Can you pay down the debt WITHOUT growing the "economy"?

[rdean]

bought a house in cash?
whats the going rate for a house in chicago? 2500? LOL

x 150

 

[Rshermr]

Relative to the title of this thread, which is, if I recall, can you pay down the debt without growing the economy, yes you can. If you spend without providing revenue, then you will simply increase the debt. But if you increase taxes enough, and use that to simply pay down the debt (ie, you do not spend), then you will NOT impact the economy in a good way.

 

[rdean]

Let's make this "simple".

Let's say you had a job and a car to get to that job.

Suddenly, you had a lot of bills. Medical. Home loan. Whatever.

So you cut back spending to pay those bills.

The car breaks down. You can't get to work. So you decide to stop all spending. Do you quit your job and not fix the car so you can "save" enough money to pay your bills?

Now, compare your car to infrastructure, job training and so on. If you don't invest in jobs, can you ever pay down the debt? Think about it.

This was a scene that was cut from some Monty Python movie, right?

Yea, starring the "Teanuts":

 

[rdean]

Relative to the title of this thread, which is, if I recall, can you pay down the debt without growing the economy, yes you can. If you spend without providing revenue, then you will simply increase the debt. But if you increase taxes enough, and use that to simply pay down the debt (ie, you do not spend), then you will NOT impact the economy in a good way.

You need to grow the economy to pay down the debt.

 

[Toro]

Yes.

The British did it in the 1820s.

 

[Rshermr]

Yes.

The British did it in the 1820s.

Yes. I agree. You need to spend stimulatively for long enough to get the economy working. We have NEVER seen the deficit reduced while unemployment is high by any great amount. Some these days (last couple of years) and the national debt will decrease dramatically, as a percent of gdp, once we see unemployment under control. We should be increasing the deficit via stimulative spending, until aggregate demand reaches a level where the economy take off.

 

[Quantum Windbag]

Let's make this "simple".

Let's say you had a job and a car to get to that job.

Suddenly, you had a lot of bills. Medical. Home loan. Whatever.

So you cut back spending to pay those bills.

The car breaks down. You can't get to work. So you decide to stop all spending. Do you quit your job and not fix the car so you can "save" enough money to pay your bills?

Now, compare your car to infrastructure, job training and so on. If you don't invest in jobs, can you ever pay down the debt? Think about it.

I see you still have a knack for making my physics teacher look stupid. If he was still alive I would introduce him to your questions and he would never again say that there is no such thing as a stupid question.

 

[rdean]

Let's make this "simple".

Let's say you had a job and a car to get to that job.

Suddenly, you had a lot of bills. Medical. Home loan. Whatever.

So you cut back spending to pay those bills.

The car breaks down. You can't get to work. So you decide to stop all spending. Do you quit your job and not fix the car so you can "save" enough money to pay your bills?

Now, compare your car to infrastructure, job training and so on. If you don't invest in jobs, can you ever pay down the debt? Think about it.

I see you still have a knack for making my physics teacher look stupid. If he was still alive I would introduce him to your questions and he would never again say that there is no such thing as a stupid question.

You getting into a physics class would be hilarious. You passing a physics class would be a travesty.

 

[itfitzme]

Relative to the title of this thread, which is, if I recall, can you pay down the debt without growing the economy, yes you can. If you spend without providing revenue, then you will simply increase the debt. But if you increase taxes enough, and use that to simply pay down the debt (ie, you do not spend), then you will NOT impact the economy in a good way.

You need to grow the economy to pay down the debt.

Rshermr is correct here. The debt and deficit are simply an accounting error in having failed to ensure that revenues equals expenses. The flow is circular. All money that is used is divided up across all the product and service produced and consumed.

Production is really dependent upon employment labor and production efficiency. Consumption is dependent entirely on what is produces as we consume what we produce. It matters not what the taxes are. It matters only that the funds circulate. The effect of changes in gov't revenues and expenses is a transient response.

The single greatest issue with general income taxes resides in the rate at which they are changed. The secondary issue is simply on the production and supply side. What is produced determines what is consumed.

Consider an economy, a small island, where there are 1000 residences, all working and making $1000 per time period. At the end of the time period, they have produced 1000 baskets of standard good. The total money supply is 1000 * $1000 = $1 Million.

Now, assuming that they have to particular motivation towards saving, all the money they make is spent on those goods. They consume, in one time period, everything they produce in one time period. And, as such, the price per basket of goods is $1,000 per basket.

Now, let’s consider that 10 of these residences serve in some public utility that is supported by taxes. Instead of this service being provided by the private sector, such as road maintenance, it is provided as a public service. The basket of goods consists of the goods produced by the remaining 990 private sector employees as well at 10 of the public sector goods and services. That full basket of goods still costs $1000 per period. Each individual still makes $1000 per period. The total money supply is still 1000 * $1000 = $1 Million.

The single difference is in how the price is paid for the public sector goods. The standard basket of privately produced goods is point of sale, each costing $990. The standard basket of publicly provided service is paid through taxes, at $10 per person per pay period for a total of $10,000.

The reality is that taxes simply do not result in less consumption or production. They are simply an alternative method of accounting for the production and consumption of goods.

Now, lets consider that the government has some $1 million in debt. An additional tax of $1 per period is attached. The money supply is increased from $1 million to 1000 * $1,001 = $1,001,000. Each standard basket of privately produced goods is still point of sale, each costing $990. The standard basket of publicly provided service is paid through taxes as before, at $10 per person. The total tax per person is $11. Income per pay period is $1,001.

The additional $1 that has been added to pay off the debt is simply circulating with no real effect.

We may go further, adding additional details regarding who owns the debt, who collects that money, where and how they spend it. No manner of complication, when the details are fully examined, will change the singular point. The economy production is the result of the total labor employed, along with the efficiency of that production. All that is produced is consumed. Prices simply adjust to account for the available money supply.

The deficit and debt are nothing more than an error in accounting where the revenues were not properly balanced against the expenses.

 

[Quantum Windbag]

Let's make this "simple".

Let's say you had a job and a car to get to that job.

Suddenly, you had a lot of bills. Medical. Home loan. Whatever.

So you cut back spending to pay those bills.

The car breaks down. You can't get to work. So you decide to stop all spending. Do you quit your job and not fix the car so you can "save" enough money to pay your bills?

Now, compare your car to infrastructure, job training and so on. If you don't invest in jobs, can you ever pay down the debt? Think about it.

I see you still have a knack for making my physics teacher look stupid. If he was still alive I would introduce him to your questions and he would never again say that there is no such thing as a stupid question.

You getting into a physics class would be hilarious. You passing a physics class would be a travesty.

Do you still believe somebody invented a camera that can film an individual photon as it travels?

 

[rdean]

I see you still have a knack for making my physics teacher look stupid. If he was still alive I would introduce him to your questions and he would never again say that there is no such thing as a stupid question.

You getting into a physics class would be hilarious. You passing a physics class would be a travesty.

Do you still believe somebody invented a camera that can film an individual photon as it travels?

 

[Quantum Windbag]

Not even close to what I asked, is it?

 

[rdean]

How come when you ask a question like: Can you pay down the debt WITHOUT growing the "economy"?

Republicans are desperate to change the topic? They must have a reason for wanting to block anything that would help the country. Why won't they tell us what those reasons are?

 

[daveman]

If you pay down the debt, you reduce the money supply. That isn't a good thing--it is deflationary. Debtors would suffer tremendously under such circumstances. And all Americans have consumer and/or mortgage debt.

Not all. I just bought a house in cash.

Doesn't count.

 

[daveman]

bought a house in cash?
whats the going rate for a house in chicago? 2500? LOL

x 150

I call bullshit. Graduates of the Sylvia Plath School of Womyn's Studies Engineering don't make that much.

 

[daveman]

How come when you ask a question like: Can you pay down the debt WITHOUT growing the "economy"?

Republicans are desperate to change the topic? They must have a reason for wanting to block anything that would help the country. Why won't they tell us what those reasons are?

Government can't grow the economy, no matter what lies progressives tell each other.

 

[Katzndogz]

Borrowing more money that we can't pay back without borrowing more money is not helping the economy.

 

[itfitzme]

How come when you ask a question like: Can you pay down the debt WITHOUT growing the "economy"?

Republicans are desperate to change the topic? They must have a reason for wanting to block anything that would help the country. Why won't they tell us what those reasons are?

Government can't grow the economy, no matter what lies progressives tell each other.

Well, now that is simply not true, dave. The tax and spending multipliers are established as factual. It is simply a matter of the reality of the economy being a closed loop system. How much effect depends on the specific circumstances of the economy.

 

[itfitzme]

Borrowing more money that we can't pay back without borrowing more money is not helping the economy.

We can always pay it back. It is as simple as increasing income taxes.

 

[daveman]

How come when you ask a question like: Can you pay down the debt WITHOUT growing the "economy"?

Republicans are desperate to change the topic? They must have a reason for wanting to block anything that would help the country. Why won't they tell us what those reasons are?

Government can't grow the economy, no matter what lies progressives tell each other.

Well, now that is simply not true, dave. The tax and spending multipliers are established as factual. It is simply a matter of the reality of the economy being a closed loop system. How much effect depends on the specific circumstances of the economy.

I believe that calculation leaves something out:

The cost of government itself. Every dollar taxed and redistributed has some portion of it offset by the cost of taxing it and redistributing it.

Government doesn't operate for nothing. And it adds nothing of value to the transaction.