U.S. economy grew at 6.4 percent annual rate in first quarter as consumer spending drives robust recovery

[laughing dog]

There is no evidence the US gov't had no intention of paying the loans back when they were made.

It was a hypothetical. You're the one who answered a general comment about intention with a claim about historical performance.

You're the one who wrote "So RVonse: In the event that in the future the government buys something by borrowing with no intention of payback" not me. But thank you for the tacit admission you have no evidence about intention.

Take it up with Wikipedia.

"The terms of the bond included: "The principal and interest hereof are payable in United States gold coin of the present standard of value."...

However, when the US Treasury called the fourth bond on April 15, 1934,[20] it defaulted on this term by refusing to redeem the bond in gold, and neither did it account for the devaluation of the dollar from $20.67 per troy ounce of gold (the 1918 standard of value) to $35 per ounce. The 21 million[1] bond holders therefore lost 139 million troy ounces of gold, or approximately 41% of the bond's principal."​

(Source: Default of the Fourth Liberty Bond )

That is irrelevant to the issue of redemption. The bond holders were paid the face value of the bonds. The fact that those dollars were worth less in terms of what they could purchase is a different issue.

 

[none]

oh my, the land of rape and honey.

 

[Jason Harvestdancer]

But in the government's case it was either taxation (theft) or borrowing (with no intention of payback).

You are mistaken - the US gov't has never defaulted on its borrowing.

Bwahahahahaha!

Good one LD, good one.

 

[Bomb#20]

You're the one who wrote "So RVonse: In the event that in the future the government buys something by borrowing with no intention of payback" not me. But thank you for the tacit admission you have no evidence about intention.

"Admission"? I made no claims about intention, so of course I didn't supply evidence about it. Now when are you going to tacitly admit you have no evidence about Miocene nitric oxide levels?

... (Source: Default of the Fourth Liberty Bond )

That is irrelevant to the issue of redemption. The bond holders were paid the face value of the bonds. The fact that those dollars were worth less in terms of what they could purchase is a different issue.

Why are you still arguing? The U.S. government did the same thing with its WWI war bonds as the commodity trader in my scenario did with his palladium contract, and you already granted that the commodity trader defaulted. The government defaulted in the vernacular, common-usage sense; it defaulted in the economic sense; it defaulted in the ethical, contractual sense of not keeping its promise. So for purposes of the larger dispute -- for establishing whether past government behavior provides reason to think the government is worthy of creditors' trust -- the issue is settled. In order to claim you're technically right you need to insist on legalistic definitions of "default" and "paid the face value" that the untrustworthy party gets to unilaterally change to whatever it finds convenient.

For purposes of persuading anyone else that your view of the situation is correct, you lost the argument the minute you wrote the words "not legally paid back (i.e. default)".

 

[laughing dog]

"Admission"? I made no claims about intention, so of course I didn't supply evidence about it.

Thank you for admitting your response was pointless.

Now when are you going to tacitly admit you have no evidence about Miocene nitric oxide levels?

To be fair, this babble makes as much sense and is as relevant as any of your posts in this discussion.

Why are you still arguing? The U.S. government did the same thing with its WWI war bonds as the commodity trader in my scenario did with his palladium contract, and you already granted that the commodity trader defaulted.

That is untrue.

The government defaulted in the vernacular, common-usage sense; it defaulted in the economic sense; it defaulted in the ethical, contractual sense of not keeping its promise. So for purposes of the larger dispute -- for establishing whether past government behavior provides reason to think the government is worthy of creditors' trust -- the issue is settled. In order to claim you're technically right you need to insist on legalistic definitions of "default" and "paid the face value" that the untrustworthy party gets to unilaterally change to whatever it finds convenient.

Nope. To default on a debt in common use means to not repay its debt.

For purposes of persuading anyone else that your view of the situation is correct, you lost the argument the minute you wrote the words "not legally paid back (i.e. default)".

If that will make you feel better about your incorrect position, who am I to argue?

 

[Bomb#20]

I made no claims about intention, so of course I didn't supply evidence about it.

Thank you for admitting your response was pointless.

Thank you for letting us all know you think claims about intentions are the only ones with a point.

Why are you still arguing? The U.S. government did the same thing with its WWI war bonds as the commodity trader in my scenario did with his palladium contract, and you already granted that the commodity trader defaulted.

That is untrue.

What is untrue? Are you saying you didn't grant that the commodity trader defaulted, or are you saying the U.S. government didn't do the same thing as the commodity trader?

Nope. To default on a debt in common use means to not repay its debt.

And in common usage, "repay" means to pay back 100%, not to pay back 59%. And in common usage, "its debt" means the amount owed. And in common usage, the amount "owed" means the amount promised. In common usage, passing a law making what you're doing no longer count legally as defaulting is irrelevant to whether you're defaulting.

 

[laughing dog]

Thank you for letting us all know you think claims about intentions are the only ones with a point.

Doubling down on your obtuseness is an interesting strategy. You are the one who wrote"So RVonse: In the event that in the future the government buys something by borrowing with no intention of payback...." which tacitly acknowledges the notion that the government borrows with no intention of payback, especially you did not address the "no intention of paying back" part. There is enough economic ignorance and outright stupidity about economics and about gov't finance in this forum without such tacit encouragement. So, either you

What is untrue? Are you saying you didn't grant that the commodity trader defaulted, or are you saying the U.S. government didn't do the same thing as the commodity trader?

It is untrue that the US gov't defaulted on tis debt.

And in common usage, "repay" means to pay back 100%, not to pay back 59%. And in common usage, "its debt" means the amount owed.

And the amount owed in dollars was repaid in the correct amount of dollars.

Using your reasoning, anytime the US gov't repays a loan when there is inflation over its length, it is defaulting, since the dollar loses some of its value. That is a misuse of the term default.

 

[Swammerdami]

Doubling down on your obtuseness is an interesting strategy....

This sub-debate mystifies me. The bond contract clearly stipulated repayment in gold. Each $10,000 obligation was an obligation to pay 483.79 troy ounces of gold coin. There is no doubt about this. Do you need a Google Image showing the bond contract?

The Supreme Court of the United States ruled that the Government had defaulted, but by a 5-4 vote declined to order any restitution. (Any reversal of FDR's Emergency Banking acts and orders would have caused chaos and "unjustified enrichment." FDR's attorney-general suggested packing the Court before these cases were heard.)

Using your reasoning, anytime the US gov't repays a loan when there is inflation over its length, it is defaulting, since the dollar loses some of its value. That is a misuse of the term default.

No. Using Mr. Bomb's reasoning, any entity which explicitly promises to pay 40 troy pounds of gold, has made an explicit promise to pay 40 troy pounds of gold. It isn't complicated.

 

[Derec]

This sub-debate mystifies me.

I have a suspicion that the Hound is sometimes contrarian just for the sake of being contrarian. Like John Cleese's character in "The Argument Clinic" ...

 

[laughing dog]

Doubling down on your obtuseness is an interesting strategy....

This sub-debate mystifies me. The bond contract clearly stipulated repayment in gold. Each $10,000 obligation was an obligation to pay 483.79 troy ounces of gold coin. There is no doubt about this. Do you need a Google Image showing the bond contract?

The Supreme Court of the United States ruled that the Government had defaulted, but by a 5-4 vote declined to order any restitution. (Any reversal of FDR's Emergency Banking acts and orders would have caused chaos and "unjustified enrichment." FDR's attorney-general suggested packing the Court before these cases were heard.)

It was much more complicated than what you describe. The court found that if they had repaid in gold, the gold owners would have been damaged because they would have been forced by law to resell the gold back at a lower price.

There is no consensus on whether the US gov't defaulted on the Liberty Bonds.

No. Using Mr. Bomb's reasoning, any entity which explicitly promises to pay 40 troy pounds of gold, has made an explicit promise to pay 40 troy pounds of gold. It isn't complicated.

Mr. Bomb is the one using the fall in value as an argument, not me.

However, upon doing some research, there is consensus that the US gov't did default in 1814. I don't know how to link to a paper from the Congressional Research Service that describes 3 episodes of alleged default (1814, Liberty Bonds and 1979) entitled "Has the US Government ever Defaulted".

 

[Gospel]

Not to defend the wealthy but that zero is one hell of a placeholder.

There are a lot of zeros to choose from.

 

[Jason Harvestdancer]

This sub-debate mystifies me.

I have a suspicion that the Hound is sometimes contrarian just for the sake of being contrarian. Like John Cleese's character in "The Argument Clinic" ...

That, and saying the government did anything bad is heresy to him. He has a low tolerance for heresy.