Posted on 05/06/2016 1:00:04 PM PDT by SeekAndFind
Edited on 05/06/2016 1:41:09 PM PDT by Admin Moderator. [history]
Precommunist China defaulted on all their bonds pre-WWII. So they should understand.
Or the choice becomes civil war and the USA inc. is done away with and nobody gets the money!
ARRRRRRRR MATEY !
Surrender the Booty !!
ARRRRRRRR MATEY !
Surrender the Booty !!
The government borrows money (creates new debt by issuing Treasury bills) to pay off existing debt (maturing Treasuries). It certainly does retire existing debts, it just makes new ones even faster.
Okay. the government “replaces” existing debt with new debt PLUS some.
When I refinance a house I use the proceeds from the second loan to pay off the first loan. And I only make payments on the new loan. The first loan is “retired”.
If I did it the way the government does it I’d take out a mortgage twice the amount of the existing mortgage then say I paid off the first mortgage. Now I’d owe twice as much on the house as I did. But that first mortgage was paid off! Yippee!
Well I’m a lawyer and a lender. No business can survive without me or someone like me. It’s made for a great run.
Pretty much you nailed it. Its called stealth default. There are some freepers who believe we can really pay back $19 trillion. :-)
That is my understanding also.
The Federal Reserve needs to become history.
That’s what I said. Printing the money comes with peril. There are some differences though depending on how it is implemented. Grabbing the cash has an immediately depressive effect on the economy and of course makes you immediately poorer. Printing the money at once would in theory be the same, though in practice it would be somewhat indiscriminate and unpredictable, sort of like how QE seems to have a disproportionately larger effect on real estate values (though this is just correlation, not sure how much is the cause but it seems like a reasonable hypothesis to me).
In its favor, printing the money over time offers an offsetting benefit of population growth. Again it would be unpredictable and harder to quantify because of all kinds of other macroeconomic factors over time, but a growing population requires a growing money supply. So if I had to choose one, I’d choose the printing press. I’d actually choose printing press over taxes too. Instead of taxing the people print the money, and the ensuing inflation becomes the tax. And the reason I like this better is because every citizen will feel the effect of inflation and ultimately every citizen will insist upon transparency, efficiency and fiscal restraint.
I never really understood taxation in the modern world except as a tool for control and power. It is so wildly inefficient to the point of absurdity especially with a government so heavily and directly involved in the economy as regulator, buyer of goods and services, and employer. It is a most obvious negative feedback loop when you consider that government employees pay taxes to fund the payroll of government employees. I am absolutely not in favor of taxing wealth, but taxing income is insidious because the human condition requires that we work to provide and the social construct requires that we work within the currency system. Taxing our wages is a tremendous friction applied against the human nature itself. Furthermore, taxing income serves as a form of protection for wealth by making competition much harder to succeed. Any business with assets paid for and cash on hand is in a far superior position to an upstart competitor that is hindered by the taxes imposed on its profits and the inability to expense investment in its enterprise. In the days when gold and silver was used as currency taxes made more sense, but today when currency is a fiction build on faith there is no reason for taxation at all. And today we have the worst of it all - we tax, we print, and we borrow. It is the most asinine situation to be in, and the politicians are so stuck in their little worlds that there is nobody who can stop the madness.
Sorry for getting carried away :-) Its a Friday.
In theory. In practice, the government will protect it's own with automatic pay raises to offset their losses.
The nation’s unfunded liabilities are something like a million dollars per man, woman and child.
“Full faith and credit” really depends on a large military prepared to crush any country that doesn’t accept US currency—but it is certainly not based on any financial metric.
Trump: I’ll reduce the national debt by getting creditors to accept less<<<<
The government ALREADY does this. What do you think the government pays on medical bills for medicaid and medicare?
I honestly don’t know the current rate of pay, but back in the day when I did medical billing, healthcare providers received about 30% of the bill.
I THINK I heard that it’s even less, now.
OTOH, if you owe the government, you will pay the premium PLUS compounded interest PLUS fines and penalties. It’s a lopsided system.
How in the world they can pay out small percentages of a bill while taking in mafia rates and still be broke is beyond me! Sounds like drug addict financing to me.
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