Paul: We dont have a revenue problem, we have spending problem

[cheguevara]

I have to agree with the good doctor.

Ron Paul said Tuesday that Americans should be "outraged" over President Obama's budget proposal and echoed fellow Republicans in arguing that the plan fell short of the president's promises to reduce deficit spending.

“There are some like the President who believe we can simply tax ourselves out of this predicament, I totally disagree. Washington does not have a revenue problem, it has a spending problem. So, it doesn’t matter how much we raise taxes, if we do not cure our disease of overspending we will not end the vicious cycle of borrowing and printing well beyond our means," Paul said.

http://thehill.com/blogs/blog-briefing-room/news/210659-ron-paul-americans-should-be-outraged-with-obama-budget

[ChumpDumper]

You think he coined that term today?

[cheguevara]

You think he coined that term today?

how is this relevant?

[DarrinS]

I got a fever, and the only prescription is more cowbell!

[TeyshaBlue]

We have both.

[cheguevara]

NwVDD0szw6Y

[ChumpDumper]

how is this relevant?Do you?

[Wild Cobra]

We have both.
We are collecting slightly less revenue because of the current economy, but spending way too much more.

[ChumpDumper]

We have both.:toast

[cheguevara]

We are collecting slightly less revenue because of the current economy, but spending way too much more.

:toast

[Agloco]

We have both.

This.

[mercos]

We have a spending problem and a revenue problem. The Bush tax cuts were not needed. Scrap the tax cuts for the rich now and scrap the rest once the economy fully recovers. Defense is already being cut, Medicare has to be worked on next or it will swallow our budget in the future. I would also like to see a financial transactions tax implemented specifically to help pay down our long term debt.

[Proxy]

Anything Ron Paul related is redundant.

[Winehole23]

Within the decade – if current policies stay in place – revenues will return to their historical levels, but not beyond. Even if the 2001, 2003, and 2010 tax cuts are extended, as they are in the AFS, revenues are projected to rise from 16.1 percent of GDP in 2012 to 18.0 percent in 2017, and then remain roughly at that level for the remainder of the decade. This approximates the average U.S. revenue level in the modern era.

In times of better fiscal health, such receipts might have been sufficient, but the coming decades do not fit the bill. First, our public debt is already at 72 percent of GDP – higher than it has been in over half a century – and projected to increase further. Second, a wave of baby boomers are beginning to descend on the entitlement programs, and supporting them in retirement will require additional spending even if significant reforms are made to control costs. Between these two trends, we will not be able to collect revenues at “normal” levels if we want to have a sustainable budget and a functioning economy.



The four balanced budgets in recent times have come at revenue levels between 19.5 and 20.6 percent of GDP. We will need to at least enter that range if we hope to stabilize the debt, particularly with the demographic tidal wave that inevitably will add a heavy burden to the federal budget.
http://www.bipartisanpolicy.org/blog/2012/02/twelve-takeaways-cbo%E2%80%99s-2012-budget-and-economic-outlook

[Winehole23]

http://www.bipartisanpolicy.org/sites/default/files/CBOnine_1.jpg

[Winehole23]

http://www.bipartisanpolicy.org/sites/default/files/CBOten_1.jpg

[Winehole23]

http://www.bipartisanpolicy.org/sites/default/files/CBOsix_0.jpg

[Winehole23]

http://www.bipartisanpolicy.org/sites/default/files/CBOeleven_1.jpg

[Winehole23]

http://www.bipartisanpolicy.org/sites/default/files/CBO%20Report%20Analysis%207.jpg

[Winehole23]

http://www.bipartisanpolicy.org/sites/default/files/CBOeight.jpg

[Winehole23]

http://www.bipartisanpolicy.org/sites/default/files/CBOone.jpg

[SnakeBoy]

http://www.bipartisanpolicy.org/sites/default/files/CBOten_1.jpg

Should be titled "Wake Up Folks, it's the Old People".

[Wild Cobra]

http://www.bipartisanpolicy.org/sites/default/files/CBOnine_1.jpg
Historical average is something like 18.3%. That cherry picked set of years was unusual growth for this nation.

[Jacob1983]

So in other words, we fucked.

[Wild Cobra]

So in other words, we fucked.
Absolutely, if we believe the lies they tell us.

Here is the historical data graphed out. Please note it is rare that tax revenue exceeds 20% of GDP. It is so rare, that WH's cherry picked data were the only years it did, in more than five decades!

http://i181.photobucket.com/albums/x262/Wild_Cobra/Politics/1934to2010marginal.jpg

[boutons_deux]

The revenue problem is completely due to VRWC/Repug:

unfunded Medicare Part D + Advantage

unfunded Iraq + Afganistan

unfunded tax cuts and tax expenditures for the UCA and 1%.

Repug regs disallowing "govt as single buyer" negotations with BigPharma and BigMedDefices

The rise is Medicare/Medicaid spending is due to the sick care industry charging exorbitant prices and raising prices many percent over inflation, for decades, "because they can" to everybody, not just Baby Boomers.

the annual deficit and national debt are all made worse by the above.

[Winehole23]

Historical average is something like 18.3%. That cherry picked set of years was unusual growth for this nation.Pointed out and contextualized at the link. Do you read anything, WC?

The growth of health care spending and runaway debt make a reversion to the historical norm untenable, the argument goes, roughly.

[cheguevara]

The revenue problem is completely due to VRWC/Repug:

unfunded Medicare Part D + Advantage

unfunded Iraq + Afganistan

unfunded tax cuts and tax expenditures for the UCA and 1%.

Repug regs disallowing "govt as single buyer" negotations with BigPharma and BigMedDefices

The rise is Medicare/Medicaid spending is due to the sick care industry charging exorbitant prices and raising prices many percent over inflation, for decades, "because they can" to everybody, not just Baby Boomers.

the annual deficit and national debt are all made worse by the above.

LOL this is like saying my family's revenue problem is due to us buying the Ferrari last year. Who the fuck told you to buy a Ferrari?

This is what happens when you approve budgets knowing you will have a deficit and not giving a shit about it. None of these expenses (Iraq, medicaid) should have been approved with a responsible government.

[cheguevara]

BTW, Ron Paul is not talking about the recent 10 years or so. he is talking about the recent 60-50 years. He is saying we've had this problem for that long.

In that period we went from a prosperous state to a welfare/warfare state.

[Winehole23]

In that period we went from a prosperous state to a welfare/warfare state.Murray Rothbard, who coined the term, died in 1995.

We've been a warfare-welfare state since WWII, tbh.

[Winehole23]

your grasp of history is notably weak, El Che

[boutons_deux]

"we went from a prosperous state to a welfare/warfare state"

He's full of bullshit. America is extremely wealthy, but the wealth has been aggressively and continuously redistributed from the 99% to the 1%, so that the 99% are much poorer and declining, esp the 70%.

Paul's bullshit policies would do nothing to solve that problem and everything to worsen it (and he knows it).

[cheguevara]

"we went from a prosperous state to a welfare/warfare state"

He's full of bullshit. America is extremely wealthy, but the wealth has been aggressively and continuously redistributed from the 99% to the 1%, so that the 99% are much poorer and decliing, esp the 70%.

Paul's bullshit policies would do nothing to solve that problem and everything to worsen it (and he knows it).

you couldn't be more wrong.

No candidate is better at fighting redistribution of wealth than Ron Paul.

The banker bailouts is the biggest crime committed to the american people in recent years. that is flagrant redistribution of wealth. This would have never happened under Ron Paul's watch. Subsidies to foreign companies. Foreign aid. Wars. All this shit, Ron Paul would end on day 1.

[cheguevara]

[Crony capitalists are the ones] that benefit from contract from government, benefit from the Federal Reserve, benefit from all the bailouts. They don’t deserve compassion. They deserve taxation or they deserve to have all their benefits removed.

But crony capitalism isn’t when someone makes money and they produce a product …. That is very important. We need to distinguish the two. And unfortunately I think some people mix that. - Ron Paul

[cheguevara]

“I do agree that there’s a mal-distribution in wealth in this country,” the Texas congressman told reporters at an event sponsored by the Christian Science Monitor, where he served up some boilerplate libertarian philosophy about reigning in the Federal Reserve, allowing Greece to go bankrupt and making the free market drive down costs on medical care like it has driven down costs on TVs and cellphones.
Paul, who is in the midst of his third and most notable run for the presidency since 1988, said proposals such as president Obama’s to levy new taxes on the wealthy result because Americans don’t understand what causes that “mal-distribution.”
“We’ve consumed our wealth,” he said, pointing to the national debt and adding that the knee-jerk reaction is to “spend more, regulate more, print more money.”
“Entitlements,” he said, “end up going to the rich anyway.”
Paul isn’t even entirely against a little class war. “Some of them should be attacked,” he said of the rich. “The ones who rip us off, the ones who get bailed out.”
And he assailed the suggestion that the government should invest in infrastructure to help end the economic crisis. “The government and the people are supposed to spend more money when the problem is spending too much money,” he said.

http://abcnews.go.com/blogs/politics/2011/09/ron-paul-on-class-warfare-treason-and-secretary-of-state-kucinich/

[TeyshaBlue]

Historical average is something like 18.3%. That cherry picked set of years was unusual growth for this nation.

It's not cherry-picked. He clearly identified it as years with a balanced budget.

lrn2read.

[CosmicCowboy]

Oh, we DEFINITELY have a revenue problem now...

That problem, however, was created by our SPENDING problem.

All the medicare and SS money paid into the "trust fund" was thrown into the general revenue fund and pissed off years ago...

On top of this, we couldn't stay within our budgets even WITH stealing all the money from the "trust fund" and continued to borrow money from the private sector and abroad and run deficits.

It was great politics and horrible economics. Something for nothing. You never get a hangover if you never quit drinking.

Now that the time is coming to pay those baby boomers real dollars for real benefits all we have to pay these benefits are fucking IOU's we wrote to ourselves and mountains of additional outside debt.

[cheguevara]

exactly what I said. So silly to say we have both, so let's raise taxes and not cut a dime.

It's like me going to my boss and saying, dear boss, my wife has been maxing out my credit card every month for the last few years. So you see, I have a revenue problem. Can I get a raise? :rollin

[Winehole23]

Oh, we DEFINITELY have a revenue problem now...

That problem, however, was created by our SPENDING problem.

All the medicare and SS money paid into the "trust fund" was thrown into the general revenue fund and pissed off years ago...
*cough* Bush/Obama tax cuts *cough*

*cough* off the books funding for wars in Iraq and Afghanistan *cough*

[TeyshaBlue]

healthcare = wife + credit card?

Metaphor fail.

[Winehole23]

the worst recession since the 1930's may also have something to do with the revenue problem

[boutons_deux]

stealing all the money from the "trust fund"

it's not stealing, any more than SS is an entitlement. SS is obligated to loan its cash to the govt, buy bonds, which aren't IOUs, and won't be defaulted on anymore than the US govt will default bonds sold to other bond holders like wealthy Americans and foreign/sovereign govts (like China).

[CosmicCowboy]

stealing all the money from the "trust fund"

it's not stealing, any more than SS is an entitlement. SS is obligated to loan its cash to the govt, buy bonds, which aren't IOUs, and won't be defaulted on anymore than the US govt will default bonds sold to other bond holders like wealthy Americans and foreign/sovereign govts (like China).

Hey dumbass...where does the money have to come from to pay those IOU's? There are only two ways...

REVENUE OR MORE IOU's.

In order to have the revenue to pay the bonds you not only have to eliminate annual deficits but RUN A CURRENT REVENUE SURPLUS...

Fat chance of THAT ever happening...

[cheguevara]

healthcare = wife + credit card?

Metaphor fail.


Today, the Real Economy Project of the Center for Media and Democracy (CMD) released an assessment of the total cost to taxpayers of the Wall Street bailout. CMD concludes that multiple federal agencies have disbursed $4.6 trillion dollars in supporting the financial sector since the meltdown in 2007-2008. Of that, $2 trillion is still outstanding. Our tally shows that the Federal Reserve is the real source of the bailout funds.

http://www.prwatch.org/node/8987

[Winehole23]

So silly to say we have both, so let's raise taxes and not cut a dime. Board realists who say we have both are on record saying we we need to raise taxes and cut services. Raising taxes only addresses the revenue problem.

[boutons_deux]

medicaid/medicare spending increases mirror the increases of all health spending, because the sick-care system is ripping off America with exorbitant prices, the rip-off being much more dominant factor than the Hitler's demographic bump of the baby boomers.

Anybody heard the docs scream blood murder when faced with a 27% cut in reimbursements, which has been postponed for the past several years?

[Wild Cobra]

Pointed out and contextualized at the link. Do you read anything, WC?

The growth of health care spending and runaway debt make a reversion to the historical norm untenable, the argument goes, roughly.

I pointed it out for those who don't. It did say something like the average was below 20%. I forget the exact wording, but the part you quoted would imply to many readers the 20% average was sustainable.

[boutons_deux]

"We dont have a revenue problem, we have spending problem"

babbling nothing but the VRWC/Repug sound bites for his ignorant sheeple bubba fucktards.

[Winehole23]

I pointed it out for those who don't. It did say something like the average was below 20%. I forget the exact wording, but the part you quoted would imply to many readers the 20% average was sustainable.That you jumped to conclusions doesn't make that a plausible inference. I posted the link, why didn't you follow it to see the context of the graph? That's on you, not me.

[Wild Cobra]

That you jumped to conclusions doesn't make that a plausible inference. I posted the link, why didn't you follow it to see the context of the graph? That's on you, not me.
I did follow the link. What is said when read was right in my view. Like I said, the graph without context implies otherwise.
9. Within the decade – if current policies stay in place – revenues will return to their historical levels, but not beyond. Even if the 2001, 2003, and 2010 tax cuts are extended, as they are in the AFS, revenues are projected to rise from 16.1 percent of GDP in 2012 to 18.0 percent in 2017, and then remain roughly at that level for the remainder of the decade. This approximates the average U.S. revenue level in the modern era. [Average of 18.3%]

-----

The four balanced budgets in recent times have come at revenue levels between 19.5 and 20.6 percent of GDP. We will need to at least enter that range if we hope to stabilize the debt, particularly with the demographic tidal wave that inevitably will add a heavy burden to the federal budget.
And maintaining that range is not plausible.

[Winehole23]

why not?

[Wild Cobra]

It's not cherry-picked. He clearly identified it as years with a balanced budget.

lrn2read.
The shifting of paperwork is a lie to the opublic. Each of those years, the national debt increased. If it was balanced, the debt would have maintained even, or been reduced.

No, this was the time of CMP and the Y2K scare driving worldwide industry. Liberals can say all they want it was because of the budget, but it wasn't. Revenues were only so high because the economy was better than normal.

[TeyshaBlue]

"Each of those years, the national debt increased. If it was balanced, the debt would have maintained even, or been reduced."

You can't be serious.

[Wild Cobra]

"Each of those years, the national debt increased. If it was balanced, the debt would have maintained even, or been reduced."

You can't be serious.
If the budget is in balance, how does the debt increase then?

[TeyshaBlue]

*hint* interest for starters.

[ElNono]

The first misconception is that the US economy is anything like a household economy. That fallacy is present at least once in this thread.

The second misconception is that the US is going to "bankrupt" or be unable to pay it's obligations.

As things stands, the only two concerns the US economy has going forward are:

A) Inflation, due to the population having too much money to spend (we're not there)
B) Abusing and losing it's position as the world's reserve currency (doubtful at this stage)

Anything else right now is political pandering. There's no "burden of debt" left to our children :cry, etc.

[ElNono]

You can't be serious.

Oh, he is serious. We had this discussion already, he just doesn't know basic accounting.

[CosmicCowboy]

The first misconception is that the US economy is anything like a household economy. That fallacy is present at least once in this thread.

The second misconception is that the US is going to "bankrupt" or be unable to pay it's obligations.

As things stands, the only two concerns the US economy has going forward are:

A) Inflation, due to the population having too much money to spend (we're not there)
B) Abusing and losing it's position as the world's reserve currency (doubtful at this stage)

Anything else right now is political pandering. There's no "burden of debt" left to our children :cry, etc.

Says the guy with zero credibility.

[Wild Cobra]

*hint* interest for starters.
Oh I see...

Do you not consider interest as part of your monthly household budget?

Do you keep spending, keeping interest off the books?

Wake up and smell reality. Stop being addicted to that Hopium.

Here are the debt numbers from table 7.1:


Year $Billions
1990 3,206,290
1991 3,598,178
1992 4,001,787
1993 4,351,044
1994 4,643,307
1995 4,920,586
1996 5,181,465
1997 5,369,206
1998 5,478,189
1999 5,605,523
2000 5,628,700
2001 5,769,881
2002 6,198,401
2003 6,760,014
2004 7,354,657
2005 7,905,300
2006 8,451,350
2007 8,950,744
2008 9,986,082
2009 11,875,851
2010 13,528,807
2011 14,764,222

[ElNono]

Says the guy with zero credibility.

Who is that guy?

No comment on the economics side?

[ElNono]

Oh I see...

No, you really don't see. We already had this discussion and you got schooled on it.

Feel free to bump that thread.

[CosmicCowboy]

Who is that guy?

No comment on the economics side?

Dude, I have a lot of comments but you are so delusional that I don't feel like wasting my time on you. We can't continue to have a geometric expansion of debt with a relatively flat GDP. The ONLY choice will be to monetize the debt and you honestly don't think that will blow the dollar and create inflation? Like I said, delusional.

[Wild Cobra]

No, you really don't see. We already had this discussion and you got schooled on it.

Feel free to bump that thread.
If you want to hide behind a second set of books like criminals, be my guest. I was not schooled on it though. Facts are facts. the debt increased under president Clinton, so any claim he had a balanced budget is a fraud. You always consider future liabilities. The only way to actually spend less is to manipulate all the debt to be due outside a given window, yet you then blame the debt under president Bush on him.

Table 1.1 indicates two years of spending very slightly less than revenues. Only $88 billion. The four years claimed ore from borrowing from SS excesses those years. you can manipulate your interest however you want, but that all it is. manipulation. It doesn't change the facts.

[cheguevara]

The first misconception is that the US economy is anything like a household economy. That fallacy is present at least once in this thread.



Aparently some posters present in this thread have never heard of or don't know the definition of a hyperbole. :downspin:

Furthermore, some ppl are oblivious to the fact that we are under the worst economic situation since the great depression. We have never had such a large disparity in distribution of wealth, and are on a clear path to bankrupcy. The country has no industry and college graduates are doomed. Some ppl think just printing more money and bailing corporations out will miraculously take us out of this mess.

Probably these are the same ppl that thought real estate value was going to keep on going up, and up and up. :rolleyes

[ElNono]

Dude, I have a lot of comments but you are so delusional that I don't feel like wasting my time on you. We can't continue to have a geometric expansion of debt with a relatively flat GDP. The ONLY choice will be to monetize the debt and you honestly don't think that will blow the dollar and create inflation? Like I said, delusional.

Why would the US need to monetize the debt?

[ElNono]

If you want to hide

I'm here. And the thread you got schooled on is still there.

[Wild Cobra]

ElNono...

Are you going to hold on to the misconception that "off budget" items are included in "budget items" to balance it?

Now think about where you are going without the debt increase. You are now agreeing the the Clinton administration shifted their spending into the Bush administration.

[ElNono]

Aparently some posters present in this thread have never heard of or don't know the definition of a hyperbole. :downspin:

Furthermore, some ppl are oblivious to the fact that we are under the worst economic situation since the great depression. We have never had such a large disparity in distribution of wealth, and are on a clear path to bankrupcy. The country has no industry and college graduates are doomed. Some ppl think just printing more money and bailing corporations out will miraculously take us out of this mess.

Probably these are the same ppl that thought real estate value was going to keep on going up, and up and up. :rolleyes

So you agree that the government is nothing like a household economy?

[cheguevara]

So you agree that the government is nothing like a household economy?

http://cache.ohinternet.com/images/thumb/7/73/JeanLucPicardFacepalm.jpg/618px-JeanLucPicardFacepalm.jpg

[ElNono]

ElNono...

Are you going to hold on to ...

I'm not holding on to anything. Even your Bush Jr accepted the fact the received a budget surplus. And the fact is that public debt did indeed go down.

[ElNono]

:cry :cry I got schooled again :cry :cry

So we agree the government is nothing like a household economy...

[cheguevara]

So we agree the government is nothing like a household economy...

:rolleyes quoting someone with made up responses = very infantile. El Che is glad to have a serious discussion when you stop reaching for straws. Cheers. :toast

[ElNono]

quoting someone with made up responses = very infantile. El Che is glad to have a serious discussion when you stop reaching for straws. Cheers. :toast

:lol this from the guy that post face palm responses instead of actually addressing the question.

The government can "create" and "destroy" money whenever it wishes and it doesn't have to "print" it either.

lol Ferraris

[Wild Cobra]

I'm not holding on to anything. Even your Bush Jr accepted the fact the received a budget surplus. And the fact is that public debt did indeed go down.
If the Clinton administration actually spend less money than revenues received, because the debt increased, he gave the debt to Bush.

[cheguevara]

:lol this from the guy that post face palm responses instead of actually addressing the question.

The government can "create" and "destroy" money whenever it wishes and it doesn't have to "print" it either.

lol Ferraris

I posted that because you are going on a tangent about the government being a household and not knowing the definition of hyperbole :lmao

stick to the topic. Do we have a revenue issue or spending or both?

try to stick to the topic and try not to go on silly tangents due to your misunderstanding of the english language. Just a piece of advice from your friend El Che. Cheers buddy

[ElNono]

LOL this is like saying my family's revenue problem is due to us buying the Ferrari last year. Who the fuck told you to buy a Ferrari?


stick to the topic. Do we have a revenue issue or spending or both?

[cheguevara]

BTW, that silly statement that people say "US cannot go bankrupt"

Depends of what definition of bankrupt you mean. Do you mean bankrupt like failing to pay your bill or bankrupt like you will never be able to pay off your debts. Obviously we know US can just keep printing IOUs to their heart's content. SO they would never FAIL to pay a bill, but will they ever pay off their debt? Not if we keep this course.

[ElNono]

If the Clinton administration actually spend less money than revenues received, because the debt increased, he gave the debt to Bush.

No. This was already thoroughly explained in the other thread and I'm not going to repeat myself. I'm simply going to point out you were wrong then, and you still wrong now. If you want to know why and revisit the conversation, go re-read that thread.

[cheguevara]

.

http://images1.wikia.nocookie.net/__cb20110530235956/bakugan/images/1/1b/Double_facepalm_lg.jpg

[mavs>spurs]

I sat down and spent a lot of time thinking about this the other day...someone pointed out that it's the healthcare spending thats going up, and they're right. In years past, we didn't have all these life extending technologies and things. Rather than spend millions treating someone for cancer or an organ transplant, they just died. Now days we are spending more and more money keeping people alive longer and longer. I don't think it's something that can easily be solved without throwing morals out the window and just saying fuck the sick and the old. They are what's driving up healthcare costs, but you can't just throw people under the bus at the same time. Tough dilemma, honestly. I think it would help if we as a country became a lot healthier. It's the smokers, drug addicts, alcoholics, and obese that are fucking us.

[Wild Cobra]

ElNono...

Argue all you want, but you are accepting the use of "off budget" numbers to balance a "budget."

[Winehole23]

I sat down and spent a lot of time thinking about this the other day...someone pointed out that it's the healthcare spending thats going up, and they're right. In years past, we didn't have all these life extending technologies and things. Rather than spend millions treating someone for cancer or an organ transplant, they just died. Now days we are spending more and more money keeping people alive longer and longer. I don't think it's something that can easily be solved without throwing morals out the window and just saying fuck the sick and the old. They are what's driving up healthcare costs, but you can't just throw people under the bus at the same time. Tough dilemma, honestly. I think it would help if we as a country became a lot healthier. It's the smokers, drug addicts, alcoholics, and obese that are fucking us.
lots of people have catastrophic health issues in the final years of life that have little to do with lifestyle and everything to do with being old and in the hospital

[mavs>spurs]

lots of people have catastrophic health issues in the final years of life that have little to do with lifestyle and everything to do with being old and in the hospital

and in years past, they just died. now days, we have more expensive and creative ways of prolonging the inevitable.

also, just as many people also have catastrophic health issues because of the choices they made for 70 years.

[Winehole23]

sure. didn't dispute that, just that poor health is elective.

[cheguevara]

lots of people have catastrophic health issues in the final years of life that have little to do with lifestyle and everything to do with being old and in the hospital

yup. The baby boomers are getting old, and them getting their 401ks wiped out does not help.

[Winehole23]

we're all gettin old

[ElNono]

BTW, that silly statement that people say "US cannot go bankrupt"

Depends of what definition of bankrupt you mean. Do you mean bankrupt like failing to pay your bill or bankrupt like you will never be able to pay off your debts. Obviously we know US can just keep printing IOUs to their heart's content. SO they would never FAIL to pay a bill, but will they ever pay off their debt? Not if we keep this course.

The US debt is in US Dollars. All of it.

What we owe China? Sitting in the Fed in US Dollars.
What we owe France? Sitting in the Fed in US Dollars.

They can't pull that money out other than spending it in US goods or services (which are paid in US dollars).


lol Ferraris

[mavs>spurs]

sure. didn't dispute that, just that poor health is elective.

old people are going to have health problems. i think we all understand that. but there are also a lot of people who are unhealthy because of lifestyle choices. my neighbor just passed away after a long bout with heart attacks and heart trouble. he was only in his 60s, and was a smoker all his life. he probably cost the state millions, and it was because he wouldn't stop smoking and eating unhealthy.

his heart troubles started in his early 40's btw.

[cheguevara]

:lol sitting in the Fed

[ElNono]

I sat down and spent a lot of time thinking about this the other day...someone pointed out that it's the healthcare spending thats going up, and they're right. In years past, we didn't have all these life extending technologies and things. Rather than spend millions treating someone for cancer or an organ transplant, they just died. Now days we are spending more and more money keeping people alive longer and longer. I don't think it's something that can easily be solved without throwing morals out the window and just saying fuck the sick and the old. They are what's driving up healthcare costs, but you can't just throw people under the bus at the same time. Tough dilemma, honestly. I think it would help if we as a country became a lot healthier. It's the smokers, drug addicts, alcoholics, and obese that are fucking us.

I agree this needs to be addressed. Unfortunately, there's a lot of middle men, even for basic care, that shouldn't be there, IMO. I can understand the high cost of catastrophic health issues. But even getting an Xray and a fracture treated can run you into the thousands of dollars. It's crazy, and it never costs that much anywhere else in the world.

[CosmicCowboy]

I sat down and spent a lot of time thinking about this the other day...someone pointed out that it's the healthcare spending thats going up, and they're right. In years past, we didn't have all these life extending technologies and things. Rather than spend millions treating someone for cancer or an organ transplant, they just died. Now days we are spending more and more money keeping people alive longer and longer. I don't think it's something that can easily be solved without throwing morals out the window and just saying fuck the sick and the old. They are what's driving up healthcare costs, but you can't just throw people under the bus at the same time. Tough dilemma, honestly. I think it would help if we as a country became a lot healthier. It's the smokers, drug addicts, alcoholics, and obese that are fucking us.

It's the healthy fuckers that just won't die that are the REAL problem. I mean who wants to pass on all the fun stuff in life just so they can outlive their sinful friends and their money and just sit there with their wrinkly old man smelling bodies in their rocking chairs doing nothing?

[ElNono]

Argue all you want

I'm not arguing.

[mavs>spurs]

if this country were to become more health conscious, i still think it would help a lot. we are a morbidly obese, unhealthy country. cancer rates are skyrocketing.

[ElNono]

:lol sitting in the Fed

Where do you think it is?

/facepalm

[mavs>spurs]

It's the healthy fuckers that just won't die that are the REAL problem. I mean who wants to pass on all the fun stuff in life just so they can outlive their sinful friends and their money and just sit there with their wrinkly old man smelling bodies in their rocking chairs doing nothing?

that's crazy man, i don't fault people for being healthy. life should be appreciated, and if i'm 80 years old just spending time with my grandkids or fishing from time to time then i don't consider it sitting around doing nothing at all. life should never be taken for granted.

[Wild Cobra]

that's crazy man, i don't fault people for being healthy. life should be appreciated, and if i'm 80 years old just spending time with my grandkids or fishing from time to time then i don't consider it sitting around doing nothing at all. life should never be taken for granted.
I see his argument as meaning that because people are living longer, Social Security and Medicare is being exhausted quicker and quicker. This would apply to any other subsidies the elderly may receive. It is a real concern. I'm not trying to tangent off this, but if we then have Obamacare requiring more insurance, it would keep the elderly alive and costing us money even more. Another net revenue shortfall.

[cheguevara]

Where do you think it is?

/facepalm

How can something that does not exists be sitting anywhere?

[mavs>spurs]

I see his argument as meaning that because people are living longer, Social Security and Medicare is being exhausted quicker and quicker. This would apply to any other subsidies the elderly may receive. It is a real concern. I'm not trying to tangent off this, but if we then have Obamacare requiring more insurance, it would keep the elderly alive and costing us money even more. Another net revenue shortfall.

sorry but i want to keep my grandparents alive, and you and i will be saying the same thing when were that age. there is a solution to all this, and it's going to require a new leaner healthcare system, leaner government, and less wasteful spending across a variety of areas.

[Wild Cobra]

How can something that does not exists be sitting anywhere?
Give hem a break. He's addicted to Hope-ium.

[Wild Cobra]

sorry but i want to keep my grandparents alive, and you and i will be saying the same thing when were that age. there is a solution to all this, and it's going to require a new leaner healthcare system, leaner government, and less wasteful spending across a variety of areas.
I'm not saying it's a bad thing. It's reality. Now I would advocate not having government paid life extending procedures just because they are available. There comes a time when the individual or family needs to bear the cost, or let the person pass on. It should be the tax payers.

[boutons_deux]

"It's the healthy fuckers that just won't die that are the REAL problem"

no, it's the 150M Americans inflicting themselves with lifestyle diseases of hi BP, CVD, diabetes, stroke, smoking (400K smoking deaths/year), dementia, osteoarthritis, etc.

they're eating shitty corporate food-like substances and no exercise, mental or physical.

Also, BigPharma has hypnotized everybody into thinking that taking their shitty, dangerous drugs is necessary, bringing happiness, hard dicks, and giving health, just a swallow away (for the rest of your life).

[mavs>spurs]

If we have to choose between policing the entire world and taking care of our own people, i'm going with taking care of our own 10 times out of 10. no reason why we should spend almost a trillion per year on defense budget then bitch that we can't take care of our sick. government is too big and out of control, and government spending is never efficient spending. the government knows it will always get its revenue (taxes) and can't fail like a business, so therefore they aren't thrifty with their money. So much money gets wasted it's mind boggling.

[Wild Cobra]

Oh.... My.... God....

Everyone, mark this day...

I agree with boutons.

[mavs>spurs]

"It's the healthy fuckers that just won't die that are the REAL problem"

no, it's the 150M Americans inflicting themselves with lifestyle diseases of hi BP, CVD, diabetes, stroke, smoking (400K smoking deaths/year), dementia, osteoarthritis, etc.

they're eating shitty corporate food-like substances and no exercise, mental or physical.

Also, BigPharma has hypnotized everybody into thinking that taking their shitty, dangerous drugs is necessary, bringing happiness, hard dicks, and giving health, just a swallow away (for the rest of your life).

well yeah you're pretty much right here, natural news says that prescription drugs kill 16,400 times more people annually than terrorists do. they give you something that only causes something else to go wrong then you need another medicine for that and so on. hell, it's funny you mention hard dicks, it's no coincidence that were the only country outside the middle east who circumcises and then all our dicks won't get hard after 40. we spend way more on viagra than other countries, just another example of being scammed. then the foreskins are turned into a several hundred billion a year industry as they are used in pharmaceutical industry and cosmetics. we're being scammed by big pharma big time.

[ElNono]

How can something that does not exists be sitting anywhere?

Accounting. The spreadsheet that holds the number is sitting there.

[ElNono]

Give hem a break. He's addicted to Hope-ium.

lol cheerleader pointing fingers

[cheguevara]

Accounting. The spreadsheet that holds the number is sitting there.

what spreadsheet?

[ElNono]

what spreadsheet?

The one that says how many US dollars are on China's account at the Fed.

[cheguevara]

so it's not US dollars sitting in the Fed.

Ok thanks :tu


The US debt is in US Dollars. All of it.

What we owe China? Sitting in the Fed in US Dollars.
What we owe France? Sitting in the Fed in US Dollars.

[ElNono]

so it's not US dollars sitting in the Fed.

Ok thanks :tu

You're correct. :tu

It's denominated in US Dollars. And it's only convertible to US goods and services.

[mavs>spurs]

And it's only convertible to US goods and services.

i dont think so. i think technically you can withdraw your money like at any other bank...

[Wild Cobra]

You're correct. :tu

It's denominated in US Dollars. And it's only convertible to US goods and services.
I wonder what would happen if we placed an expiration date on debt. Convert the debt obligation, or lose it...

[CosmicCowboy]

The US debt is in US Dollars. All of it.

What we owe China? Sitting in the Fed in US Dollars.
What we owe France? Sitting in the Fed in US Dollars.



Well, technically it's not sitting there yet.

http://www.creditwritedowns.com/wp-content/uploads/2010/05/printing-money.jpg

[cheguevara]

Truth is we are living on borrowed money. An unsustainable path to economic doom.

[ElNono]

Well, technically it's not sitting there yet.

http://www.creditwritedowns.com/wp-content/uploads/2010/05/printing-money.jpg

And likely never will be. AFAIK, it's not redeemable directly from the Fed.

[ElNono]

i dont think so. i think technically you can withdraw your money like at any other bank...

I don't think so. I think part of the deal is that you cannot.
Obviously, you can use the money to purchase goods then resell them.

[CosmicCowboy]

I don't think so. I think part of the deal is that you cannot.
Obviously, you can use the money to purchase goods then resell them.

:lmao

fucking clueless...

[cheguevara]

I don't think so. I think part of the deal is that you cannot.
Obviously, you can use the money to purchase goods then resell them.

:lol what "deal" are you talking about?

[cheguevara]

:lmao nothing is stopping China from dumping US securities. That is why we cannot really enact any protectionist measures against them or even intervene in the Taiwan-China relations.

:lol ElNono read some more. you got homework tonight :lmao

[cheguevara]

Debt with China is not even the issue


We have already seen that when the United States runs a current account deficit, there must be net capital inflows (i.e., a capital account, or more precisely financial account, surplus) to fund the gap between domestic savings and investment. The United States needs to increase private domestic saving and cut the size of the budget deficit, preferably by slowing the growth of government spending rather than increasing taxes. Cutting marginal tax rates on saving and investment, meanwhile, would help promote U.S. growth. Downsizing government and tax reform would reduce the growth of U.S. public debt relative to GDP, and increase the standard of living for future consumers.

Limited government, strong private property rights, and open markets were the hallmarks of the U.S. economy during the first wave of globalization in the nineteenth and early twentieth centuries. Economic growth was strong and the United States ran persistent trade deficits financed by foreign investment and borrowed from foreigners for private investment—not to fund government deficits. Limiting government growth would help strengthen property rights, and adhering to free trade in goods and capital would encourage foreign investment in the U.S. private sector. Running a trade deficit under those conditions would not be a problem.

http://www.cato.org/pubs/articles/dorn_bjwa_142.pdf

[boutons_deux]

Cato, VRWC funded stink tank.

[mavs>spurs]

:lmao nothing is stopping China from dumping US securities

Yes there is, us being the biggest buyer of all their crap being why. China destroying the US economy would be just as destructive to their own economy.

[CosmicCowboy]

Well, it doesn't benefit China to dump right now but they are damn sure considering their options. We are too deep into them and their position is too big. They would just screw themselves. They ARE making new buys for shorter terms and letting their longer positions age out. When they are ready, they will move. One day we will have a treasury auction and nobody will buy and we will be well and truly fucked.

[CosmicCowboy]

BTW, they are dumping HUGE amounts of money into South America and commodities in general as they diversify. We AREN'T the only game in town.

[ElNono]

:lmao

fucking clueless...

:lmao

fucking clueless...

this is too easy

[ElNono]

:lol what "deal" are you talking about?

The "deal" that establishes that China's money will be kept in US Dollars, and that China can't convert that money in anything else other than spending such dollars.

Why China isn't asking for their money in gold right now? It can't. It agreed not to.


:lmao nothing is stopping China from dumping US securities. That is why we cannot really enact any protectionist measures against them or even intervene in the Taiwan-China relations.

:lol ElNono read some more. you got homework tonight :lmao

:lol they can't dump US securities if they want to keep their currency pegged to the US dollar and remain competitive... and that's exactly why they don't do it.

:lol cheguebeaner needs to read some more...

lol Ferraris

[ElNono]

Well, it doesn't benefit China to dump right now but they are damn sure considering their options. We are too deep into them and their position is too big. They would just screw themselves. They ARE making new buys for shorter terms and letting their longer positions age out. When they are ready, they will move. One day we will have a treasury auction and nobody will buy and we will be well and truly fucked.

What is it this catastrophic thing that's going to happen if the US offers bonds/treasuries/securities and nobody wants to buy them?


BTW, they are dumping HUGE amounts of money into South America and commodities in general as they diversify. We AREN'T the only game in town.

Except that South America has a track record of not paying back.

[cheguevara]

The "deal" that establishes that China's money will be kept in US Dollars, and that China can't convert that money in anything else other than spending such dollars.

Why China isn't asking for their money in gold right now? It can't. It agreed not to.



:lol they can't dump US securities if they want to keep their currency pegged to the US dollar and remain competitive... and that's exactly why they don't do it.

:lol cheguebeaner needs to read some more...

lol Ferraris

:lol oh please I wanna hear more about this "deal"

do you have any links? with an explanation of this deal preferably from someone who actually knows what they are talking about? :rollin

[ChumpDumper]

Nobody has explained why China would want to dump the dollar when it is owed so many of them.

[ElNono]

:lol oh please I wanna hear more about this "deal"

do you have any links? with an explanation of this deal preferably from someone who actually knows what they are talking about? :rollin

:lol Why do you think it's called fiat currency? The only thing backing it is the word of the federal government. Convertibility ended in 1971.

But if you want to hear it from an actual economist, suit yourself (http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf)

BTW, there's no Ferraris in that small book. :lmao

[CosmicCowboy]

[QUOTE=ElNono;5649088]What is it this catastrophic thing that's going to happen if the US offers bonds/treasuries/securities and nobody wants to buy them?

Damn...do you live under a rock? The day that we can't continue to roll debt into the future is the day the musical chairs stops.[/COLOR]



Except that South America has a track record of not paying back.

They aren't buying bonds...they are buying land and companies connected to commodities...seriously...who the fuck are you? Are you some high school punk that doesn't get it because you are just ignorant? (I'm not calling you stupid yet...)

[ElNono]

Damn...do you live under a rock? The day that we can't continue to roll debt into the future is the day the musical chairs stops.

Why? What is it this catastrophic thing that's going to happen if the US offers bonds/treasuries/securities and nobody wants to buy them?

Is the country going "bankrupt"? :lmao

Are you going to answer the question or keep on spinning tires?

BTW, there's a reason not to do that, and but it has everything to do with inflation, as I pointed out earlier.


They aren't buying bonds...they are buying land and companies connected to commodities...seriously...who the fuck are you? Are you some high school punk that doesn't get it because you are just ignorant? (I'm not calling you stupid yet...)

Like what? Investments in South America from the Chinese since 2005 amount to a meager $75 billion (http://www.aljazeera.com/indepth/features/2011/12/20111212162113350425.html). Big money for South America, but a drop in the bucket for the Chinese (who made nearly $300 billion in trade with the US last year alone).

This isn't about me and I'm not going into name calling. If this is so easy and so clear, you shouldn't have a problem making your point in the first place.

[mavs>spurs]

Nobody has explained why China would want to dump the dollar when it is owed so many of them.

china doesn't want that immediately, it buys us time to get shit moving in the right direction before they pull the rug out from under us. sure, they're making moves to ween themselves off of the dollar and prepare for that day, but it won't be anytime soon.

[ElNono]

china doesn't want that immediately, it buys us time to get shit moving in the right direction before they pull the rug out from under us. sure, they're making moves to ween themselves off of the dollar and prepare for that day, but it won't be anytime soon.

Frankly, if China would start spending those dollars in the US, there are some positive byproducts to that:

1) They would become less competitive (their currency would stop being artificially pegged as low, since they wouldn't have the dollars to back it up)
2) Their investments would result putting money in people's pockets, which would work as an stimulus to our economy.
3) Depending on the volume of transactions, there could be some inflation creep, but it should also coincide with GDP growth and should be controllable through interest rates/taxing.

[Wild Cobra]

:lmao nothing is stopping China from dumping US securities. That is why we cannot really enact any protectionist measures against them or even intervene in the Taiwan-China relations.

:lol ElNono read some more. you got homework tonight :lmao
China can't just drop the securities. As soon as they start unloading, the value of our dollar will drop, making them worth less than they loaned us. Then, it will cost us more money to buy their goods, and they will sell less to us. I wish China would unload them. In the long run, I think it would be good for us.

[mavs>spurs]

^the value of the dollar wouldn't change much i dont think...thats totally determined by supply and demand in the world currency markets. it would jack up our interest rates next time we issued bonds to borrow money though.

[mavs>spurs]

i'm just not really grasping how china dumping securities would lower the value of hte dollar...demand for the dollar is responsible for its value, and people would still need to dollar to do business with the U.S. and buy oil...correct me if i'm wrong someone but I don't think this would devalue the dollar at all. it would just raise the interest rate on any new debt.

[ElNono]

^the value of the dollar wouldn't change much i dont think...thats totally determined by supply and demand in the world currency markets. it would jack up our interest rates next time we issued bonds to borrow money though.

Correct. US Treasuries would just change hands. US Treasuries are not part of the currency markets (until they mature, at which point they stop being Treasuries).

[mavs>spurs]

Correct. US Treasuries would just change hands. US Treasuries are not part of the currency markets (until they mature, at which point they stop being Treasuries).

didn't think so..just wanted to be sure. i'm not a master of finance or anything, just trying to wrap up my bba :P

[ElNono]

i'm just not really grasping how china dumping securities would lower the value of hte dollar...

It won't.

[mavs>spurs]

already answered my question :toast

[ElNono]

didn't think so..just wanted to be sure. i'm not a master of finance or anything, just trying to wrap up my bba :P

As pointed out earlier, the specific reason for China not to drop it's US Dollar backing has everything to do both with how they conduct trade and how they peg their currency to remain competitive.

[mavs>spurs]

their currency is undervalued as shit right now, if you index it to where it should be according to prices in that country. we were looking at this the other day. it's just a cheap way for them to dump all their shit on us. china's "strong" economy is somewhat of a hoax, its actually pretty fragile and heavily dependent on ours. china feeds off our dicks basically.

[CosmicCowboy]

http://www.bloomberg.com/news/2012-02-15/china-trims-holdings-of-treasuries-to-lowest-level-since-2010.html

China, the largest foreign lender to the U.S., reduced its holdings of Treasuries in December to the least since June 2010 amid efforts to assist Europe in addressing its debt crisis.
The world’s second-largest economy decreased its U.S. debt securities by $31.9 billion from November, or 2.8 percent, to $1.11 trillion, according to Treasury Department data released yesterday. Its position in longer-term notes and bonds also fell $32.5 billion, or 2.8 percent, to $1.1 trillion, the least since June 2010. Japan, the second biggest buyer, increased its holding by $3.5 billion to $1.04 trillion.
“We continue to see Chinese Treasury holdings trending lower as they are acting on their desire for diversification and as they may get more involved in the situation in Europe,” said Ian Lyngen, a government bond strategist at CRT Capital Group LLC in Stamford, Connecticut.
China’s policy makers have advocated diversification of the nation’s foreign exchange reserves away from U.S. assets. China may support Europe through channels such as the International Monetary Fund, the European Financial Stability Facility and the European Stability Mechanism, said People’s Bank of China Governor Zhou Xiaochuan.
European Assets
“China will always adhere to the principle of holding assets of EU sovereign debt,” Zhou said in Beijing yesterday. “We would participate in resolving the euro debt crisis,” he said.
Chinese Officials, including central bank adviser Li Daokui, have urged diversification of the nation’s foreign exchange reserves. The Asian nation will “seek diversification in the management of reserve assets, strengthen risk management, and minimize the negative impacts of the fluctuations in the international financial market on the Chinese economy,” Zhou said in August.
Foreign investors held 47.6 percent of outstanding public Treasury debt as of December, the smallest proportion since October 2006, Treasury data show.
Net buying of long-term equities, notes and bonds totaled $17.9 billion during the month compared with net purchases of $61.3 billion the previous month, the Treasury Department said. Including short-term securities such as stock swaps, foreigners bought a net $87.1 billion in December compared with net buying of $42.9 billion the previous month.
China increased its position in shorter-term bills by $600 million to $2.9 billion. The U.S. updated data on Feb. 28, 2011 to show China’s Treasury investments in October 2010 were a record $1.18 trillion, 30 percent more than the initial estimate of $906.8 billion.
“Overall flows were weak for the U.S. and the Chinese tactical selling reflected that as Treasuries were giving back very little,” said Aaron Kohli, an interest-rate strategist BNP Paribas SA in New York, one of 21 primary dealers that trade directly with the Federal Reserve. “As yields rise, look for China to buy Treasuries again.”
Treasuries have lost 0.1 percent this year after returning 9.8 percent last year, according to a Bank of America Merrill Lynch index.
To contact the reporter on this story: Cordell Eddings in New York at [email protected]; Daniel Kruger in New York at [email protected]

[cheguevara]

China would not dump its securities. But they could and nothing could stop them.

What we should reallly be worried about is if China stops buying our securities. Who's going to finance our debt then? That is exactly why some people call China our banker and why if we strain relations with them, we are in some deep sh...

[mercos]

I believe China owns about 8% of our debt. Though it has been moving up since 2000, some on this board are grossly overestimating how much we rely on China in terms of financing our debt.

[cheguevara]

I believe China owns about 8% of our debt. Though it has been moving up since 2000, some on this board are grossly overestimating how much we rely on China in terms of financing our debt.

thought it was 20%+ but I agree.

this thread is about revenue vs. spending.

[ElNono]

What is it this catastrophic thing that's going to happen if the US offers bonds/treasuries/securities and nobody wants to buy them?

No takers?

[CosmicCowboy]

Pretty simple math. With a total debt of 15.4 trillion and China holding 1.18 trillion the percentage is 7.66%

[ElNono]

China would not dump its securities. But they could and nothing could stop them.

Then somebody else would own the securities. So, instead of owing China, we would owe somebody else. So what's the problem?

[cheguevara]

What is it this catastrophic thing that's going to happen if the US offers bonds/treasuries/securities and nobody wants to buy them?

No takers?

Every country where you have runaway inflation, there's no middle class. Mexico, there's no middle class, you have a huge poor class, and a lot of wealthy people. Today we have a growing poor class, and we have more billionaires than ever before. So we're moving into third world status...

[CosmicCowboy]

What is it this catastrophic thing that's going to happen if the US offers bonds/treasuries/securities and nobody wants to buy them?

No takers?

The interest rate on 15 trillion of debt goes from relatively cheap to economy and budget crushing expensive. Again pretty simple math. If we had to pay a 10% coupon on debt (pretty realistic) our debt interest every year would be 1.5 TRILLION dollars.

[coyotes_geek]

I believe China owns about 8% of our debt. Though it has been moving up since 2000, some on this board are grossly overestimating how much we rely on China in terms of financing our debt.


thought it was 20%+ but I agree.

this thread is about revenue vs. spending.

You're both right in a way. China's only holding about 8% of our total debt, but since 2000 they've been buying about 20% of the new debt we've issued.

[cheguevara]

Then somebody else would own the securities. So, instead of owing China, we would owe somebody else. So what's the problem?


Currently, U.S. citizens comprise less than 5% of world population, but account for more than 25% of global GDP. Given our debts and weakening economy, this disproportionate advantage should narrow. Yet the U.S. is asking much poorer foreign nations to maintain the status quo, and incredibly, they are complying. At least for now.

You can't blame the Obama administration for choosing to go down this path. If these other nations are giving, it becomes very easy to take. However, given his supposedly post-ideological pragmatic gifts, one would hope that Mr. Obama can see that, just like all other bubbles in world history, the U.S. debt bubble will end badly. Taking on more debt to maintain spending is neither sacrificial nor beneficial.

http://online.wsj.com/article/SB123266988914308217.html

[ElNono]

The interest rate on 15 trillion of debt goes from relatively cheap to economy and budget crushing expensive. Again pretty simple math. If we had to pay a 10% coupon on debt (pretty realistic) our debt interest every year would be 1.5 TRILLION dollars.

Define "economy and budget crushing"?

We control the money supply, no matter how much we owe, as long as we owe in US dollars. Furthermore, as long as that borrowed money is a treasury, it's not part of the currency market, thus does not puts pressure on the value of the dollar.

That said, due to inflationary concerns, it should always be a good idea to try to get the economy going and the GDP growing again.

[ElNono]

Currently, U.S. citizens comprise less than 5% of world population, but account for more than 25% of global GDP. Given our debts and weakening economy, this disproportionate advantage should narrow. Yet the U.S. is asking much poorer foreign nations to maintain the status quo, and incredibly, they are complying. At least for now.

You can't blame the Obama administration for choosing to go down this path. If these other nations are giving, it becomes very easy to take. However, given his supposedly post-ideological pragmatic gifts, one would hope that Mr. Obama can see that, just like all other bubbles in world history, the U.S. debt bubble will end badly. Taking on more debt to maintain spending is neither sacrificial nor beneficial.

http://online.wsj.com/article/SB123266988914308217.html


Then somebody else would own the securities. So, instead of owing China, we would owe somebody else. So what's the problem?

[ElNono]

Every country where you have runaway inflation, there's no middle class. Mexico, there's no middle class, you have a huge poor class, and a lot of wealthy people. Today we have a growing poor class, and we have more billionaires than ever before. So we're moving into third world status...

We don't have runaway inflation, and we're actually fighting off deflation at this point. No signs of inflation right now, much less runaway inflation.

Income disparity has nothing to do with how much we spend or owe. It's strictly a matter of policy.

[cheguevara]

We don't have runaway inflation, and we're actually fighting off deflation at this point. No signs of inflation right now, much less runaway inflation.

Income disparity has nothing to do with how much we spend or owe. It's strictly a matter of policy.

If countries stop lending in near future nothing can stop worldwide inflation down the line.

Income disparity is a result from inflation. Do the math.


Every country where you have runaway inflation, there's no middle class. Mexico, there's no middle class, you have a huge poor class, and a lot of wealthy people. Today we have a growing poor class, and we have more billionaires than ever before. So we're moving into third world status...

you don't think US joining 3rd world is a catastrophe?

[CosmicCowboy]

Define "economy and budget crushing"?

We control the money supply, no matter how much we owe, as long as we owe in US dollars. Furthermore, as long as that borrowed money is a treasury, it's not part of the currency market, thus does not puts pressure on the value of the dollar.

That said, due to inflationary concerns, it should always be a good idea to try to get the economy going and the GDP growing again.

Keep drinking that koolaid. We can't run these huge deficits forever. When we start monetizing debt outsiders will quit buying it. It's really pretty simple. To say that we can just print new money to pay our debts forever is total madness.

[cheguevara]

Income disparity has nothing to do with how much we spend or owe. It's strictly a matter of policy.

:lmao ElNono

"The last decade has seen a burgeoning surge in economics literature investigating the link between inflation and income inequality. Regardless of the mechanisms proposed, these papers came to the inevitable conclusion that the greater the inflation, the greater the income disparity...

Scholars have extensively demonstrated the link between inflation and income inequality. Ideally, governments should be striving towards low inflation, but that would depend very much on how it plans its budget, i.e. poor budget planning leads to deficits and financing such through printing and increasing money supply, and its monetary policies."

http://newasiarepublic.com/?p=29706

[Winehole23]

if there's a straight up correlation, should be easy to show how they line up, at least for the USA. I'm not holding my breath.

[cheguevara]

if there's a straight up correlation, should be easy to show how they line up, at least for the USA. I'm not holding my breath.

http://newasiarepublic.com/wp-content/uploads/image002.gif

[Winehole23]

where did you get this graph and what does it mean?

[ElNono]

If countries stop lending in near future nothing can stop worldwide inflation down the line.
Income disparity is a result from inflation. Do the math.

There's no signs of "worldwide inflation" and frankly we're in the middle of a recession, basically trying to starve off deflation.


you don't think US joining 3rd world is a catastrophe?

False premise. The US isn't joining the 3rd world period.


:lmao ElNono

"The last decade has seen a burgeoning surge in economics literature investigating the link between inflation and income inequality. Regardless of the mechanisms proposed, these papers came to the inevitable conclusion that the greater the inflation, the greater the income disparity...

Scholars have extensively demonstrated the link between inflation and income inequality. Ideally, governments should be striving towards low inflation, but that would depend very much on how it plans its budget, i.e. poor budget planning leads to deficits and financing such through printing and increasing money supply, and its monetary policies."

http://newasiarepublic.com/?p=29706

You're still oblivious to the fact that the US isn't just any other country, nor that it has full control of it's currency, and more importantly the denomination of it's debt.

In the US, where inflation has been mild at best (and you always want to have some small amount of inflation), the income disparity is pretty egregious. It obviously wasn't caused by inflation, but simply policies.

You could start "balancing" income disparity in the US tomorrow if you were to pass legislation that "redistributes" (for example, through taxing) from the top to the bottom. In the case of the US it's strictly a matter of politics/policy.

[ElNono]

http://newasiarepublic.com/wp-content/uploads/image002.gif

http://www.thedigeratilife.com/images/historicalinflationrates.jpg

I guess the US has been reducing it's income disparity in the last 15 years or so... :rolleyes

[CosmicCowboy]

How did this fucking commie get citizenship?

[cheguevara]

:lmao wow

[Winehole23]

El Che's crypto-leftism is puzzling, but it's the faux libertarianism that really grates, tbh.

[ElNono]

Keep drinking that koolaid. We can't run these huge deficits forever. When we start monetizing debt outsiders will quit buying it. It's really pretty simple. To say that we can just print new money to pay our debts forever is total madness.

So that's the answer? "Keep drinking that koolaid". No "economy and budget crushing" event?

Look, I'm no fan on what we're spending this money on. I think we should take the advantageous position we have right now and use it to get our economy going again... Increasing economic output should be a priority.

[ElNono]

How did this fucking commie get citizenship?

:lol

[cheguevara]

You're still oblivious to the fact that the US isn't just any other country, nor that it has full control of it's currency, and more importantly the denomination of it's debt.

In the US, where inflation has been mild at best (and you always want to have some small amount of inflation), the income disparity is pretty egregious. It obviously wasn't caused by inflation, but simply policies.

Never said the current US disparity is due to inflation or that there are no other factors that affect it. Saying the inflation that is coming will exponentially increase that disparity.



You could start "balancing" income disparity in the US tomorrow if you were to pass legislation that "redistributes" (for example, through taxing) from the top to the bottom. In the case of the US it's strictly a matter of politics/policy.

that is completely the wrong approach once inflation hits. That practice is futile if the transfer-receiving outsiders(regular folk) greatly exceeds the taxed insiders(unions workers, etc). Across-the-board taxes are even worse and compound the problems on top of the low purchasing power of the outsiders.

[Winehole23]

Never said the current US disparity is due to inflationso what was your graph supposed to illustrate?

[cheguevara]

the greater the inflation, the greater the income disparity...

[Winehole23]

correlation or cause, in your opinion?

[ElNono]

Never said the current US disparity is due to inflation or that there are no other factors that affect it. Saying the inflation that is coming will exponentially increase that disparity.

When is this inflation coming? Inflation hasn't been a factor in the past 15 years, yet income disparity has increased in the same period. Strictly on policy decisions.

We're talking strictly about the US.


that is completely the wrong approach once inflation hits. That practice is futile if the transfer-receiving outsiders(regular folk) greatly exceeds the taxed insiders(unions workers, etc). Across-the-board taxes are even worse and compound the problems on top of the low purchasing power of the outsiders.

But it's a false premise, because inflation didn't "hit". Right now, where we're actually fighting deflation, that's exactly how you would tackle that. Obviously, that's provided you want to tackle that at all.

[Winehole23]

@ El Che: why do you except the US from your generalization?

[cheguevara]

When is this inflation coming?

already beat that horse in this thread.

[cheguevara]

@ El Che: why do you except the US from your generalization?

not sure what you mean

[Winehole23]

Never said the current US disparity is due to inflation...http://www.spurstalk.com/forums/showpost.php?p=5651312&postcount=171

[Winehole23]

was the correlation/cause question unclear for you too?

[ElNono]

already beat that horse in this thread.

Where? I distinctly remember you bringing up a Ferrari though... :lol

[cheguevara]

was the correlation/cause question unclear for you too?

I would not say it causes it, but increases it.

[cheguevara]

Where?

I'm not surprised. :toast

[Winehole23]

distinction without a difference, unless you're willing to say a little more about it. you essentially seem to be saying a factor that causes a change in the rate of change isn't a cause.

[ChumpDumper]

I'm not surprised. :toastI'm not surprised you aren't elaborating, cuz it ain't there. :toast

[ElNono]

I'm not surprised. :toast

:lol so where is it? lol running away

[cheguevara]

If countries stop lending in near future nothing can stop worldwide inflation down the line.

http://images1.wikia.nocookie.net/__cb20110530235956/bakugan/images/1/1b/Double_facepalm_lg.jpg

[Winehole23]

fortune cookie poster sees the future and trumps us all

[ChumpDumper]

So something that will never happen will cause inflation.

[cheguevara]

fortune cookie poster sees into the future and trumps us all

KONpt9a6HrI

[ChumpDumper]

KONpt9a6HrIWhen did Paul say all countries will stop lending in the future?

[ElNono]

If

:lmao :lmao :lmao

[cheguevara]

When did Paul say all countries will stop lending in the future?

In February of 2009 Ron Paul warned of a US Dollar collapse when China stops buying out debt in this video. There are many good points that Mr. Paul points out in the video but none were more prophetic then calling for the dollar bubble to burst. When the video was recorded the US Dollar index was around 86. Today the US Dollar Index is currently at 75.5.

Another ironic fact about this video is that shortly after this video was recorded President Obama went on 60 Minutes and made the statement that http://www.subprimeblogger.com/2009/03/22/obama-the-dollar-is-still-strong-march-22nd the dollar is still strong<.” Unfortunately the dollar was not strong and we have seen that as a 10% drop has happened since the president’s statement. For those of you wondering why the value of the dollar continues to decline it is truly supply and demand.

1grSrasToHI

[ChumpDumper]

In February of 2009 Ron Paul warned of a US Dollar collapse when China stops buying out debt

1grSrasToHIThey haven't stopped.

[Winehole23]

I'm not surprised you aren't elaborating, cuz it ain't there. :toastlol running away from his own words