So, why budget deficits and national debt?

[Toddsterpatriot]

Government debt increases by about a $Trillion per year because of 'consumer spending' on imports, and remittances.

You're mistaken.

 

[Woodznutz]

You're mistaken.

Can you explain how the trade deficit doesn't affect deficit spending or the national debt?

 

[Toddsterpatriot]

Can you explain government debt?

I want you to explain the process whereby my purchase causes the government to borrow money.

I take a $20 and buy German beer. Go!!!

 

[Harpy Eagle]

So why does the government try to make up for the hemorrhage of money by borrowing and printing money.

The Govt is trying to make up for its overspending, not for me buying rum from Panama.

 

[task0778]

Can you explain government debt?

I'll take a shot at it, not saying I'm 100% right but this is what I think. There are 2 basic kinds of debt, public and private. Private debt is what I borrow to buy a car, house, medical bills, food, clothing, etc. I can save it, spend it, or invest it, but whatever I spend over and above my income is debt and has nothing whatsoever to do with public debt. It's the same with private businesses, they can go into debt to expand or change their business but that also has nothing to do with gov't debt.

Gov't or public debt is how much the gov't spends at every level over and above their revenue. It ain't the same thing.

 

[Woodznutz]

The Govt is trying to make up for its overspending, not for me buying rum from Panama.

We have a huge trade surplus with Panama, so keep buying rum, no problem.

 

[task0778]

We have a huge trade surplus with Panama, so keep buying rum, no problem.

The balance of trade is an aggregate number (probably estimated) that has absolutely nothing to do with our national debt and deficits. If as a society we import more than we export to any given country, the gov't does not make up the difference and it does not pay interest at all on any debt that exists.

 

[Ringo]

Max Kaiser, a well-known financier and crypto-investor: "The 300-year-old global financial system, which in the last 30 years has completely degenerated into a Ponzi scheme, is on its last breath. The owners of this fortress, in fact a sand castle, are increasingly panicking, wreaking blood and chaos in the world"

 

[Toddsterpatriot]

Max Kaiser, a well-known financier and crypto-investor: "The 300-year-old global financial system, which in the last 30 years has completely degenerated into a Ponzi scheme, is on its last breath. The owners of this fortress, in fact a sand castle, are increasingly panicking, wreaking blood and chaos in the world"

How much better is it working than communism?

 

[Woodznutz]

The balance of trade is an aggregate number (probably estimated) that has absolutely nothing to do with our national debt and deficits. If as a society we import more than we export to any given country, the gov't does not make up the difference and it does not pay interest at all on any debt that exists.

That's like saying that a broken leg has nothing to do with a guy not being able to play baseball.

 

[task0778]

That's like saying that a broken leg has nothing to do with a guy not being able to play baseball.

Totally wrong. You do realize that the gov't does not pay anything to anybody if the balance of payments is negative and the gov't does not receive anything from any country, person, or business where it's positive, right?

 

[Woodznutz]

Totally wrong. You do realize that the gov't does not pay anything to anybody if the balance of payments is negative and the gov't does not receive anything from any country, person, or business where it's positive, right?

The economy hemorrhages money in various ways mainly through private sector commerce. Only the government can address the shortfall. This is done by borrowing and deficit spending thus increasing the debt.

Government revenues come from taxing private sector economic activity. When revenues fall below the fixed costs of government and government programs, borrowing occurs, which increases the debt.

 

[Toddsterpatriot]

The economy hemorrhages money in various ways mainly through private sector commerce. Only the government can address the shortfall. This is done by borrowing and deficit spending thus increasing the debt.

When I buy beer from Germany, how does the economy hemorrhage money?

Only the government can address the shortfall. This is done by borrowing and deficit spending thus increasing the debt.

Why do you feel my purchase caused a shortfall? Where? How?

 

[Woodznutz]

When I buy beer from Germany, how does the economy hemorrhage money?

Only the government can address the shortfall. This is done by borrowing and deficit spending thus increasing the debt.

Why do you feel my purchase caused a shortfall? Where? How?

If you (and others) didn't buy that beer the whole enterprise would collapse. In other words, without the final consumer purchase of the imported product there would be no trade deficit.

Is there a Relationship Between Our Trade Deficit and Our National Debt?

The dramatic rise in the U.S. trade deficit is adding to America's national debt.

www.industryweek.com

 

[Toddsterpatriot]

If you (and others) didn't buy that beer the whole enterprise would collapse. In other words, without the final consumer purchase of the imported product there would be no trade deficit.

Is there a Relationship Between Our Trade Deficit and Our National Debt?

The dramatic rise in the U.S. trade deficit is adding to America's national debt.

www.industryweek.com

In other words, without the final consumer purchase of the imported product there would be no trade deficit.

OK. So what?

Why do you feel my purchase caused a shortfall? Where? How?

 

[Woodznutz]

In other words, without the final consumer purchase of the imported product there would be no trade deficit.

OK. So what?

Why do you feel my purchase caused a shortfall? Where? How?

If it was German beer it helped. Trade deficits increase the debt.

 

[Toddsterpatriot]

If it was German beer it helped. Trade deficits increase the debt.

Still waiting for you to show how the $20 that moved from my wallet, to Germany,
created the need for the US government to borrow more money.

 

[Woodznutz]

Still waiting for you to show how the $20 that moved from my wallet, to Germany,
created the need for the US government to borrow more money.

The $800Billion trade deficit includes many $20 purchases. Each year we lose $800Billion out of the economy. The government spends borrowed money into the economy to make up for the losses through deficit spending. Each year we need to borrow about a $Trillion to keep the economy going.

 

[Toddsterpatriot]

The $800Billion trade deficit includes many $20 purchases. Each year we lose $800Billion out of the economy. The government spends borrowed money into the economy to make up for the losses through deficit spending. Each year we need to borrow about a $Trillion to keep the economy going.

Now show me how my $20 purchase forces the government to borrow money.

The government spends borrowed money into the economy to make up for the losses

Is the $20 in my wallet a "loss"? Why?