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RE: Raising the debt ceiling - 1/10/2011 7:38:23 PM

Musicmystery

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Term, I know facts are irrelevant to your emotional take. But you are focused entirely on cash flow. We also have wealth--vast wealth, in fact--and beyond monetary assets, vast resources. So far, far past your time frames. Especially when it's solvable by simple shifting of priorities--some cuts, some taxes.

quote:

"While you're talking about individuals now instead of government, before issuing credit, and before deciding how much credit, they will look at your income and current financial commitments--essentially, your structural debt. "

OK, you want to use the words that way fine. Then it is all structural debt.

No, it's not all structural debt. Nor is it just words. It's an important distinction. In the "old days," lenders would be careful it didn't exceed 30% of your income. That still allows for a lot of spending, from utilities to cheerios to a stereo on layaway.

(in reply to Termyn8or)

Post #: 41

RE: Raising the debt ceiling - 1/11/2011 4:11:50 AM

Termyn8or

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"But you are focused entirely on cash flow."

Duh. Of course I am because that is the point - precisely. If you think this can be solved by switching from a major to a minor or a fourth, it just won't fly. It take s a whole new chord. We cannot do this indefinitely.

So even if you are right, that thinking is merely deciding which future generation to saddle with the inevitable. Children, grandchildren, greatgrandchildren, greatgreatgrandchildren ? Take your pick. If we had any fucking gonads we would make it better now, suffer now for our progeny. No promulgation of any reasoning like your's can evade that. Make the world better, get out from under the yoke of debt starting now.

People think the concept of debt is imaginary or something, of course because we have been conditioned so. Reality is buried, and it is high time to dig it up. That is my point. Got any kids ? Do you realize that even though the situation does not appear critical at this time that the current ways are not sustainable indefinitely ? If you answer yes to those questions, it is clear that the time to act decisively and effectively is not now, it was about fifty years ago.

Let me put it this way. Those who suffered the first major depression were dickheads. For their own welfare they consigned us into debt service. Are we the new dickheads to follow suit, to contuinue the tradition of fucking over the yet unborn ?

T

(in reply to Musicmystery)

Post #: 42

RE: Raising the debt ceiling - 1/11/2011 4:52:58 AM

DomKen

Posts: 19457
Joined: 7/4/2004
From: Chicago, IL
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quote:

ORIGINAL: BenevolentM

quote:

ORIGINAL: AnimusRex

1. Debt Service 400 Billion
2. Medicare- 600 Billion
3. Social Security- 1 Trillion
4. Defense- 1 Trillion
5. Every other damn thing the Gov't does- 500 Billion
Total= 3.5 Trillion

Income- about 2.1 Trillion (including the 1 Trillion from Social Security payroll tax)

Deficit- 1.4 Trillion

Unfortunately, something doesn't add up here. On the face of it the numbers add up, but divide 1.4 by 2.1. You get 666. The quotient is 66.6% percent. I'm rounding down. Since the Federal government is as large as it is, if the math is right inflation would be dramatically higher than it is. The figures don't add up. Ask a physicist. Do these numbers add up? Perhaps we are siphoning energy from hell's wheel. I don't know the answer. All I can say is that it is dam curious.

We don't print 1.4 trillion in new money to satisfy the deficit. We borrow existing dollars so the effect on inflation is minimal.

(in reply to BenevolentM)

Post #: 43

RE: Raising the debt ceiling - 1/11/2011 5:01:16 AM

Termyn8or

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You are busted Ken. That is my point. The borrowing artificially props up the "value" of the USD. If that hadn't happened this country would be strong, self sufficient and able to sustain it's ways indefinitely. But that's not the way it went.

Stop agreeing with me, it just doesn't seem right.

T

(in reply to DomKen)

Post #: 44

RE: Raising the debt ceiling - 1/11/2011 5:05:32 AM

DarkSteven

Posts: 28072
Joined: 5/2/2008
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quote:

ORIGINAL: Termyn8or

You are busted Ken. That is my point. The borrowing artificially props up the "value" of the USD.

Not exactly. The dollar is worth what people think it's worth, like a stock or any other investment. The fact that there are people willing to loan money on the dollar, indicates confidence in the dollar. If nobody wanted to let the US borrow, the dollar would be worth less. A LOT less.

What I'm trying to say is that the borrowing props up the dollar's value, but it's not artificial, any more than a stock price is.

_____________________________

"You women....

The small-breasted ones want larger breasts. The large-breasted ones want smaller ones. The straight-haired ones curl their hair, and the curly-haired ones straighten theirs...

Quit fretting. We men love you."

(in reply to Termyn8or)

Post #: 45

RE: Raising the debt ceiling - 1/11/2011 5:37:57 AM

Termyn8or

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"any more than a stock price is. "

Ummm HELLO !

Thanks for the agreement.

T

(in reply to DarkSteven)

Post #: 46

RE: Raising the debt ceiling - 1/11/2011 2:26:05 PM

Musicmystery

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Dismissal isn't the same as an argument. When people disagree with you, they give reasons. You respond with unsupported emotion and, in Steven's case, just deciding you're right a priori.

But Steven is correct. Imagine a share in a business--say, the corner store. The value of buying into that business depends on a number of factors--the inventory, sure, but also people's assessment of business' prospects and management, the industry's trends, local development, economic factors, and so forth. Would you so readily dismiss that valuation?

Because that's what a stock is.

(in reply to Termyn8or)

Post #: 47

RE: Raising the debt ceiling - 1/11/2011 11:32:16 PM

Termyn8or

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Maybe I wrote that wrong. I understand the concept of people's "faith" in the medium of exchange affecting it's value. That faith also serves as a self fulfilling prophesy in a way, just as it does when applied to stock in a company. For a publicly traded company's stock, ISO9002 (or whatever version now) compliance, among other things, help to accurately assess the value of the company's assets. Does such a standard exist for the government ? I don't know much about it but I doubt they comply with anything that doesn't suit them, as such I would not invest in them. That is my opinion and really, doesn't require agreement or disagreement. The government is so mismanaged it's pitiful. But in a way that's beside the point.

One of the major avenues for borrowing money is of course bonds, which the government sells. While stocks may be traded at will, I don't believe that the issuer has any obligation to ever buy them back. However bonds eventually mature. There is still faith in the USD, of that there is no doubt. However I'm quite sure that it is not as strong as it once was, due to simple facts. Interest accrued is eaten up by the devaluation of the dollar to some extent. So if country X holds $3 trillion worth, when they mature country X might say well, maybe we'll just go $2 trillion this time around.

Assuming competent money management, this could quite easily happen. And I've learned, or been made aware of a few things here at CM, one of which is I hadn't considered the fact the the US actually holds some other foreign debt. For them to do this, obviously they have faith in the issuer, and if their currency is not pegged to the USD, faith in the strength of their currency. I would imagine that they pay more interest as well. In that sense the government is acting as a bank, borrow low and loan high.

Because of the interdependence of national economies of course things are a bit different. However just how long can this go on ? It's not emotional to observe these conditions and conclude that our overspending can't go on indefinitely. It's not emotional to assert that no entity can continue forever spending more money than it takes in. That's why I assert that it is better to let the shit hit the fan before the pile of shit grows to levels that will bury us.

T

(in reply to Musicmystery)

Post #: 48

RE: Raising the debt ceiling - 1/12/2011 6:19:38 AM

Musicmystery

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Joined: 3/14/2005
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quote:

That's why I assert that it is better to let the shit hit the fan before the pile of shit grows to levels that will bury us.

To do so would destroy both our economy and the world economy. You would long for today's "good old days."

(in reply to Termyn8or)

Post #: 49

RE: Raising the debt ceiling - 1/12/2011 8:18:14 AM

BenevolentM

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quote:

ORIGINAL: DomKen
We don't print 1.4 trillion in new money to satisfy the deficit. We borrow existing dollars so the effect on inflation is minimal.

I am not as knowledgeable in the field of economics at present as I would like. I have encountered this explanation before, but as many people will attest such arguments on the face of it do not make sense. Typically, it seems people either go along with the rhetoric or they challenge it and arrive at alarmist conclusions.

I do not see how borrowing changes anything because there isn't enough money in the world unless the Federal government is smaller than we are led to believe. My conclusion is that deficit spending creates the illusion that government is enormous and out of control when in fact it isn't. The problem is the alarmist arguments are valid, but unsound. There is a subtle distinction in logic between a valid and a sound argument. A valid argument is one where the structure of the argument is sound, but there may be something wrong with the underlying assumptions.

My conclusion is the government is smaller than we are led to believe; thus, it has a smaller adverse effect on the economy, small enough for the numbers to make sense. The logic is two-faced. We apparently achieve small government by deluding the citizenry into thinking that we have big government. In other words we employ deception. While the citizenry is deluded those in the know, know it is nonsense and government keeps on doing what appears to the citizen as insane. The citizen rises up to then do the biding of the bankers and big business who want small government.

Though I feel my argument to be persuasive I have to honestly admit that I haven't spent enough time on the problem to truly be certain that I know what I'm talking about. I have to admit, what I've formulated is elegant, however; it is an elegant explanation. The elegance of a theory/explanation is a correctness barometer. On the face of it, what I wrote appears to be correct.

(in reply to DomKen)

Post #: 50

RE: Raising the debt ceiling - 1/12/2011 9:56:33 AM

Termyn8or

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Joined: 11/12/2005
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"You would long for today's "good old days"

Agreed. So let's just let the next generation deal with it. Get our's while the getiins' good. Seems to be the traditional way.

I'm not being sarcastic, I'm trying to say that it has to stop sooner or later. In that light I ask this; Do you think that we are going to build this country to the point where we can pay our damn bills and start paying down the debt, to provide for future generations ? How would we accomplish that ?

T

(in reply to Musicmystery)

Post #: 51

RE: Raising the debt ceiling - 1/12/2011 10:03:32 AM

BenevolentM

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Joined: 11/15/2006
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I would not be surprised that 66.6 or as I've pointed out 666 is a magic number of sorts, that the portions were deliberately worked out, according to an occult theory, so that the proportion came to this number. Stated in another "more scientific" way, 66.6 is obviously a bias point of some sort due to its symmetry. The number is much too symmetric to be mere coincidence, that is the result of random influences.

(in reply to BenevolentM)

Post #: 52

RE: Raising the debt ceiling - 1/12/2011 10:05:56 AM

willbeurdaddy

Posts: 11894
Joined: 4/8/2006
Status: offline

quote:

ORIGINAL: BenevolentM

quote:

ORIGINAL: DomKen
We don't print 1.4 trillion in new money to satisfy the deficit. We borrow existing dollars so the effect on inflation is minimal.

I am not as knowledgeable in the field of economics at present as I would like. I have encountered this explanation before, but as many people will attest such arguments on the face of it do not make sense. Typically, it seems people either go along with the rhetoric or they challenge it and arrive at alarmist conclusions.

I do not see how borrowing changes anything because there isn't enough money in the world unless the Federal government is smaller than we are led to believe. My conclusion is that deficit spending creates the illusion that government is enormous and out of control when in fact it isn't. The problem is the alarmist arguments are valid, but unsound. There is a subtle distinction in logic between a valid and a sound argument. A valid argument is one where the structure of the argument is sound, but there may be something wrong with the underlying assumptions.

My conclusion is the government is smaller than we are led to believe; thus, it has a smaller adverse effect on the economy, small enough for the numbers to make sense. The logic is two-faced. We apparently achieve small government by deluding the citizenry into thinking that we have big government. In other words we employ deception. While the citizenry is deluded those in the know, know it is nonsense and government keeps on doing what appears to the citizen as insane. The citizen rises up to then do the biding of the bankers and big business who want small government.

Though I feel my argument to be persuasive I have to honestly admit that I haven't spent enough time on the problem to truly be certain that I know what I'm talking about. I have to admit, what I've formulated is elegant, however; it is an elegant explanation. The elegance of a theory/explanation is a correctness barometer. On the face of it, what I wrote appears to be correct.

Elegance fails you here.

Borrowing doesnt make government any more or less "big" than it appears to be. Spending is exactly what it appears to be and is the judge of size. The fact that spending may outpace the ability to pay and that a government may someday default on its loans doesnt mean a thing wrt to size.

_____________________________

Hear the lark
and harken
to the barking of the dogfox,
gone to ground.

(in reply to BenevolentM)

Post #: 53

RE: Raising the debt ceiling - 1/12/2011 10:10:22 AM

Musicmystery

Posts: 30259
Joined: 3/14/2005
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quote:

So let's just let the next generation deal with it.

Not what I said, is it.

quote:

Do you think that we are going to build this country to the point where we can pay our damn bills and start paying down the debt, to provide for future generations ? How would we accomplish that ?

Of course. And no mystery there--we were already doing it in the 90s, but decided on tax cuts instead. And then Bush/Congress cut them further and unnecessarily created long term structural deficits.

We will have to trim social security a bit. We will have to complete Medicaid reform (national health care is a first step) and address costs--including incentives to doctors. We will have to trim defense spending (we buy things the Pentagon doesn't even want). And we will have to reform taxes--the proposal to eliminate many deductions and lower the rates a bit is a start. Realistically, though, we will have to set aside tax dollars--spending cuts and economic growth alone are not going to resolve the matter long term, given that economic downturns will happen periodically. Continuing to build our exports is also very helpful. Saving for rainy days instead of spending or cutting taxes during growth periods would also be healthy.

So vote for people who recognize this. And when Congress offers you "free" money, in benefits or tax cuts, write to ask them whether this is really a good idea, and how they're going to pay for it.

(in reply to Termyn8or)

Post #: 54

RE: Raising the debt ceiling - 1/12/2011 10:19:25 AM

Edwynn

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quote:

ORIGINAL: truckinslave

"The schools" should not be supported by federak money. Period.

Just typical liberal deflection from Ed

I didn't realize that not wanting to be a third world country but rather fund education with national revenues like every other developed economy does was "typical liberal deflection."

Thanks for bringing that to my attention.

(in reply to truckinslave)

Post #: 55

RE: Raising the debt ceiling - 1/12/2011 10:21:51 AM

BenevolentM

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Joined: 11/15/2006
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quote:

ORIGINAL: willbeurdaddy
Spending is exactly what it appears to be and is the judge of size.

Size is inherently relativistic. It is like saying a trillion yen is a lot of money.

(in reply to willbeurdaddy)

Post #: 56

RE: Raising the debt ceiling - 1/12/2011 10:22:35 AM

mnottertail

Posts: 60698
Joined: 11/3/2004
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quote:

ORIGINAL: Edwynn

quote:

ORIGINAL: truckinslave

"The schools" should not be supported by federak money. Period.

Just typical liberal deflection from Ed

I didn't realize that not wanting to be a third world country but rather fund education with national revenues like every other developed economy does was "typical liberal deflection."

Thanks for bringing that to my attention.

If you notice his spelling and his lack of real reason, you might say that he is a shining example that the system has failed him.

Shadrach, Meshach, and Abednego (the fedrak triplets)

_____________________________

Have they not divided the prey; to every man a damsel or two? Judges 5:30

(in reply to Edwynn)

Post #: 57

RE: Raising the debt ceiling - 1/12/2011 10:23:06 AM

willbeurdaddy

Posts: 11894
Joined: 4/8/2006
Status: offline

quote:

ORIGINAL: Edwynn

quote:

ORIGINAL: truckinslave

"The schools" should not be supported by federak money. Period.

Just typical liberal deflection from Ed

I didn't realize that not wanting to be a third world country but rather fund education with national revenues like every other developed economy does was "typical liberal deflection."

Thanks for bringing that to my attention.

More likely that we would become a 3rd world country BECAUSE of misspent money than because we dont fund education. Federal funding on education has been counter-productive and a total waste of time and money, and is arguably unconstitutional. Education is a family and local government issue, in that order.

_____________________________

Hear the lark
and harken
to the barking of the dogfox,
gone to ground.

(in reply to Edwynn)

Post #: 58

RE: Raising the debt ceiling - 1/12/2011 10:27:31 AM

mnottertail

Posts: 60698
Joined: 11/3/2004
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I suspect that the intelligent design will make enough people stupid at the nutsucker homeschools that we will find that all we really need is lower taxes and tort reform to become a player in the global economy again.

_____________________________

Have they not divided the prey; to every man a damsel or two? Judges 5:30

(in reply to willbeurdaddy)

Post #: 59

RE: Raising the debt ceiling - 1/12/2011 10:28:59 AM

Musicmystery

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Joined: 3/14/2005
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(in reply to mnottertail)

Post #: 60

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