Posted on 05/06/2016 5:38:20 AM PDT by reaganaut1
Now, that is an interesting idea.
What’s the old saying:
If you owe the bank a little, the bank owns you.
If you owe the bank a lot, you own the bank.
In the end, most of it will be written off, mark my words.
You may be right... but it isn't a minor thing. This is a government bond default, like we're seeing in Puerto Rico, on a global scale.
As for debt default? It has been our ill defined & usually unstated policy for almost a century:
Trump is on track to prove the man of the hour, if he continues to speak truth to the prevailing illusions.
Not nervous at all.
I do enjoy watching you anti-Trump people walking the razors edge though.
Vote Trump 2016
Many interesting antidotes from Germany following the Weimar collapse.
When money dies is a worthy read for anyone interested. free PDf available at Mises.org. the diary of Frau Eisenmenter is another facinating read of post WWI Life in Vienna dealing with currency collapse. Also a free read PDFS.
Unfortunately, in the past, the Government uses only "bailouts" at the expense of the taxpayers to solve thier problems.
My point: THEY do NOT lose... the taxpayers DO.
We have 94 million people out of work.
The tax revenues from them being employed would be $2 trillion per year into the government coffers.
That would reduce the debt rather decently.
End users pay all tariffs and taxes levied against goods and services.
That would be us.
Keep walking dead with the status quo isn’t much of an option, but it does keep some happy in the matrix.
I suspect you have no idea what Trump is trying to avoid.
Speaking the TRUTH, as you done in post #50, could scare hell out of those who have nary a clue.
Very good explanation of the oncoming situation.
Very easy actually. Since the government owes it to the government they just dont pay it. Do you realize that the government owing the government is simply an accounting fiction? Bonds held by SS must be paid back by the US government who must get the money by using taxes or borrowing.
There is no trust fund the bonds mean nothing. Today’s SS recipients get their money directly from today’s workers. If there isnt enough money to go around then either benefits get cut or taxes go up. In other words SS is just like any other welfare scheme. Take from one to give to another to buy votes.
Imagine if you made $50,000 a year, continued to spend $70,000 a year (putting the balance on your credit cards) and today had a credit card debt of $450,000. Where do you think that would lead - especially if your credit interest rate was 1% but was soon going up?
Let's face it. We've been totally screwed by our politicians. They have been spending our money and going into huge debt to get themselves re-elected. Both Parties have been playing the game and kicking the inevitable calamity down the road.
The complete economic crash will be coming soon. Trump is sending up the WARNING flags now. He sees it and so do most of us who are paying attention. The coming economic reckoning is a disaster and it can't be stopped without radical and massive surgery soon. It can only be mitigated if we miraculously get a booming economy (more revenue), massively cut our expenses (hugely doubtful), and start paying off our principle. And then we might have a chance if the interest rates stay historically low - and it will still take many years to do it.
It's bleak out there, folks, and Trump is only pointing it out. The Washington politicians sure won't.
And you thought we could repay $19 trillion. :-)
I saw Trump talk about his plan to pay the debt yesterday with Brett. I got the impression that he was backtracking. He said there were a lot of options one of which was to refinance. I guess technically refinancing is paying the debt but you’re still stuck with debt when you refinance. Only the terms are different. And I don’t see refinancing as an advantage given that the debt is already financed at very low rates. He also said that we could discount the debt. I took that to mean that when interest rates go up the value of the debt will go down since its financed at such low rates. He wants to buy it back at that reduced price. But I don’t really see that as a way to pay off the debt in such a short period of time. Basically I got the impression that he doesn’t have a plan and didn’t really mean what he seemed to say.
Here’s what would happen:
The interest rate at which investors would be will ing to buy our bonds would go up. Perhaps 4 to 5% or more.
Alternatively, the cost of the bond would be discounted to reward risk taking behavior.
Example:
East St. Louis offered a 30 year bond at 45 with 7% interest.
So for every 450 bucks you sent them they would give you a 30 year 1,000 buck bond. You were paid 7% on the 1,000 face value.
I doubt that they were ever paid off. This was in the 70s.
More tariffs and less income taxes.
When we start to ‘default’ (if we stay on the same ‘greek’ path we’re on now) it would be MUCH worse than what you’ve outlined. Besides, I suspect you’re overstating a tad...
I do enjoy watching you anti-Trump people walking the razors edge though.
++++
I have no idea what you mean by that.
For the record I am:
A Ted Cruz supporter.
A Donald Trump in 2016 supporter.
I’m voting for Trump in November.
Question: Do these credentials allow me to criticize our candidates policy positions?
>> Another really kookie idea from Trump <<
How dare you imply that Mr. Trump doesn’t know squat about how an economy operates!
Do you not realize that Mr. Trump is the greatest economic genius since Karl Marx?
Moreover, he’s the greatest financial genius since Walter Bagehot.
Shame on you. Tut, tut.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.