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would be best
or you could tell china to pay a big tax if they do not forgive the usa debt
(lets not blame parities in this thread both helped create the mess)
How do we default on debts payable in the currency we created?
would be best
or you could tell china to pay a big tax if they do not forgive the usa debt
(lets not blame parities in this thread both helped create the mess)
you're not getting what I'm saying. How can you not afford to pay China in a currency you create?
For example, lets say I issued paper currency with my picture on it. You then loaned me 14 trillion dollars of that currency with my picture on it. how could I not pay you back if I can make more of that paper with my picture on it?
You certainly could, but the risk is that at some point the attempt to inflate away the value of the debt becomes a functional default from the standpoint of the creditor.
so Inflation is what we should be most concerned with?
I dunno what we should be most concerned with. Do you?
See post WWI Germany for the exact scenario you describe
War reparations were payable in a foreign currency and annual payments made up half of GDP.
who's going to come and collect????
collect what?
Point is
Government Spending is NOT constrained by taxes and/or borrowing
Its constrained by INFLATION.
Talks of DEBT AND INSOLVENCY should turn to talks about INFLATION which would lead to the need for FULL EMPLOYMENT.
To put it roughly, our system of payment failed in 2008 -- and we've pawned our future GDP to pay for it. We socialized private risk and we're still propping it up. It's very popular to say that through the bailout we definitively turned the corner on debt-deflation and even worse.
The truth is, we don't know that for sure, and we may even have prepared the ground for worse instability in the future, indeed, for instability in general as trust in the USA continues to erode.
The domestic market is barely growing. Private money is wating prudently on the sidelines for more favorable market conditions. That pretty much leaves an activist government to fill the gap, correct?
not sure what you mean here
The instability and eroding of the US seems to be about a risk of Default, which I hope I've made clear is not possible. The True Risk is INFLATION which can be tamed by full employment.. We socialized private risk and we're still propping it up. It's very popular to say that through the bailout we definitively turned the corner on debt-deflation and even worse.
The truth is, we don't know that for sure, and we may even have prepared the ground for worse instability in the future, indeed, for instability in general as trust in the USA continues to erode.
Were I'm leading is this is the time to talk about getting people good paying jobs today! We need to boost our PRODUCTION otherwise there will be too much money chasing fewer goods.
I agree with the position of eliminating the payroll tax to put money in the hands of people and let them decide what to do with the money.
I'm hardly convinced default is a non-issue for the reason I gave.
The case being that the US market is barely growing right now, it makes very little sense for private money to expand capacity or hire new workers to staff it. Correct?
That leaves an activist government to fill the gap in employment, the lack of which is the proximate danger to our present economic recovery and future ability to pay, according to you.
"We must have full employment"
My question to you is, in a stagnant domestic market who will provide the jobs?
That might be a pretty good idea.
Course you can't call it a stimulus, though that's undeniably what it is, and the revenue costs ought to be offset elsewhere, but that's not gonna happen either.
[QUOTE=Winehole23;4958679]I'm hardly convinced default is a non-issue for the reason I gave.[quote]
define default, because if you're saying we can't pay our bills you're simply wrong.
it's barely growing because Americans have no money to spend. add an extra $500 per month by eliminating the payroll tax and watch the economy start to heat up again.The case being that the US market is barely growing right now, it makes very little sense for private money to expand capacity or hire new workers to staff it. Correct?
That leaves an activist government to fill the gap in employment, the lack of which is the proximate danger to our present economic recovery and future ability to pay, according to you.
"We must have full employment"
My question to you is, in a stagnant domestic market who will provide the jobs?
get money in the hands of people like I described above and watch business hire all sorts of people to help consumers depart of with their money.
Direct government stimulation of the economy in the form of tax breaks. Where have I heard this before?get money in the hands of people like I described above and watch business hire all sorts of people to help consumers depart of with their money.
no need to offset anything since government spending isn't constrained by tax revenues.
only thing we should worry about is inflation since default is a non issue.
don't worry so much about what others say or think. it's about what you say and think.
Ok. So you admit in your own words you're a one note johnny. Only one thing is important, full employment, and the only plausible means to acheive it is massive tax breaks.
How do plan to pay for the breaks, 2cents? Or do we just borrow more money again?
Was that a mischaracterization? By all means, correct it.
Did you envision a role for government too, say infrastructure investment, or something of that sort? I'm not tryin to trip you up. I'm actually interested in what you think, fwiw.
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