What's $17,211,558,177,668.77?

[ElNono]

If the US can grow at a post-world war II rate, then the deficit can probably be easily obliterated... the problem is, well, there's no such worldwide event going on at this time...

[boutons_deux]

If the US can grow at a post-world war II rate, then the deficit can probably be easily obliterated... the problem is, well, there's no such worldwide event going on at this time...

return on capital was lower and income taxes were way over 50% top brackets, so private money went into real investments, and there was plenty of public money for infrastructure and GI Bill to pay for colleges and home loans. unions were strong and were the salary pacesetters that non-unionized employers had to match.

the VRWC HATED that situation and started Taking THEIR power back in the 1970s, leading to the horrible inequality now and the high return on capital (money games, not Real Economy)

[Nbadan]

The debt can be eliminated...but not by not spending on funded projects like unemployment insurance...but by merely slowing the growth in government spending that is already occurring..that's already happening with the sequester and we've seen annual deficit spending fall to over half the level it was when Bush left the US on the fiscal cliff...

[spursncowboys]

So, nothing wrong? Okay.

Dan, you're missing the entire context of what you're saying. It's easy to throw around "the US dollar is the global currency" lightly without understanding the reason for that was the Bretton Woods system that followed WWII, when the rest of the world was pretty much in shambles. The US took advantage of that and put itself in a cozy situation, being able to, for example, lend money under it's own rules (ie: you can't ask for your money back, you have to spend it). They also ran an negative balance sheet to pump US dollars to all those countries that needed to rebuild thus creating the dependency and strengthening the position of the dollar as a global currency. Once the US moved to a fiat currency (and the system effectively ended), it only allowed it to move even more money around.

Now, I'm fairly pragmatic, and I have no problem with "to the winner go the spoils". But pretending that the US doesn't have it's economic enemies that would like to see such advantages eroded and potentially replaced is extremely naive.

Although I agree with most of what you've been stating, especially the ponzi scheme theory. But "took advantage"? We were the only game in town. We rebuilt Europe, which allowed these countries the ability to provide higher social programs (healthcare). Also the alternative Countries were alot worse.

[boutons_deux]

[ElNono]

Although I agree with most of what you've been stating, especially the ponzi scheme theory. But "took advantage"? We were the only game in town. We rebuilt Europe, which allowed these countries the ability to provide higher social programs (healthcare). Also the alternative Countries were alot worse.

I wasn't stating that in the "preying" sense, but in the sense of seizing the opportunity to establish it's power. Things like the Marshal plan were integral in establishing the US dollar as a global currency. Post World-War II the US was so far ahead technologically that almost every country wanted to import our stuff, to the point that there just weren't enough dollars around for countries to do so. So we tossed money at them and created the dependency. I agree the US was the only game in town, and that's exactly why the US set what the rules were going to be.

[The Reckoning]

i remember my macro prof saying something along the lines that the debt is self sustaining because it creates its own foreign and domestic markets

[Warlord23]

Question for the political forum posters: What would happen if everyone (government, corporations, individuals) paid back all their debts at a particular point of time? What would need to happen for such a scenario to occur under the current monetary framework?

Answering this correctly will give you a perspective that will help in analyzing the question of government debt in the modern economy.

[spursncowboys]

I wasn't stating that in the "preying" sense, but in the sense of seizing the opportunity to establish it's power. Things like the Marshal plan were integral in establishing the US dollar as a global currency. Post World-War II the US was so far ahead technologically that almost every country wanted to import our stuff, to the point that there just weren't enough dollars around for countries to do so. So we tossed money at them and created the dependency. I agree the US was the only game in town, and that's exactly why the US set what the rules were going to be.

[boutons_deux]

Although I agree with most of what you've been stating, especially the ponzi scheme theory. But "took advantage"? We were the only game in town. We rebuilt Europe, which allowed these countries the ability to provide higher social programs (healthcare). Also the alternative Countries were alot worse.

America's Marshall Plan gave Europe $15B to rebuild (aka Keynesian stimulus, counter-cyclical spending) and to become a market for US products.

"The ECA's official mission statement was to give a boost to the European economy: to promote European production, to bolster European currency, and to facilitate international trade, especially with the United States, whose economic interest required Europe to become wealthy enough to import U.S. goods.

Another unofficial goal of ECA (and of the Marshall Plan) was the containment of growing Soviet influence in Europe, evident especially in the growing strength of communist parties in Czechoslovakia, France, and Italy."

http://en.wikipedia.org/wiki/Marshal...Implementation

iow, Europe getting rebuilt was in America's financial and Cold War interest. It wasn't philanthropy or altruism.

The creation of Western Europe's social welfare/safety net had nothing to do with America.

[ElNono]

Question for the political forum posters: What would happen if everyone (government, corporations, individuals) paid back all their debts at a particular point of time? What would need to happen for such a scenario to occur under the current monetary framework?

Answering this correctly will give you a perspective that will help in analyzing the question of government debt in the modern economy.

I'm not sure I dare going through all the scenarios, but, for one, that would require excess liquidity...

[Winehole23]

The time to make decisions about your credit card debt is before the card is used. Once it is used, you'd damn well better pay the bill or they come and collect your goodies…and you are known to the world as a deadbeat.

Budgets are worth arguing over…debt ceilings are nothing more than accounting contrivances.

Yep.

[Nbadan]

Being creative...I think all that would be required is a freeze on all interest on all debt for a few years.....consumers, the markets and even the FED could then pay off the balance on the debt instead of interest....the bad thing is that since government owns most of the debt the debt could actually get much worse in the short run..

[angrydude]

i remember my macro prof saying something along the lines that the debt is self sustaining because it creates its own foreign and domestic markets

I remember my macro prof telling me "I don't know much, but I know monetary policy works!"

[angrydude]

I also had another one say, "Of course I want a one world government. It'd be great!"

[boutons_deux]

"freeze on all interest on all debt for a few years"

illegal contractually

[Spanklin]

We've known for 50 years under the Washington Concensus that debt doesn't matter. 50 years now. Debt don't matter. For 50 years. How many more decades before we educate the rest of America in this simple, true fact?

Debt doesn't matter.

[Spanklin]

Question for the political forum posters: What would happen if everyone (government, corporations, individuals) paid back all their debts at a particular point of time? What would need to happen for such a scenario to occur under the current monetary framework?

Answering this correctly will give you a perspective that will help in analyzing the question of government debt in the modern economy.

It would cause crash of course, which is precisely what Ron Paul wants and why he's pushing for gold standard to crash us again. He's Russia's , a commie spy, and needs the USA to collapse for his precious Aryan handlers.

[Nbadan]

We've known for 50 years under the Washington Concensus that debt doesn't matter. 50 years now. Debt don't matter. For 50 years. How many more decades before we educate the rest of America in this simple, true fact?

Debt doesn't matter.

Well.....it matters if the Debt doesn't lead the US economy and tax receipts to grow enough to monetize the debt....

[Spanklin]

Well.....it matters if the Debt doesn't lead the US economy and tax receipts to grow enough to monetize the debt....

Tax receipts at the Treasury have to grow for the Federal Reserve to ease? I don't know if you meant what you wrote, but if you did then you don't know wtf you're talking about.

[Nbadan]

Tax receipts at the Treasury have to grow for the Federal Reserve to ease? I don't know if you meant what you wrote, but if you did then you don't know wtf you're talking about.

..and you aren't familiar with history...

[Spanklin]

..and you aren't familiar with history...

How so?