A world with no US federal government debt

[ksen]

Sound like Utopia?

What would happen after the disappearance of the bond market?

The US doesn't have to have any debt. We can print the money we need to fund government out of thin air. But we don't do that.

Why? Is it because of the thirst for US debt?

 

[Trausti]

Sound like Utopia?

What would happen after the disappearance of the bond market?

The US doesn't have to have any debt. We can print the money we need to fund government out of thin air. But we don't do that.

Why? Is it because of the thirst for US debt?

Ya really don't know why we avoid doing that?

 

[ksen]

lol at the hyperinflationist boogie man.

 

[Tom Sawyer]

Sure, you can print enough money to wipe out the debt, but paying $1 million for a loaf of bread and having the Chinese-led trade embargo bar any of your products from ever leaving your borders again would make it somewhat of a phyrric victory.

 

[Trausti]

lol at the hyperinflationist boogie man.

lololololololololol

 

[dismal]

Sound like Utopia?

What would happen after the disappearance of the bond market?

The US doesn't have to have any debt. We can print the money we need to fund government out of thin air. But we don't do that.

Why? Is it because of the thirst for US debt?

Ya really don't know why we avoid doing that?

He's only on Chapter three of economics as of 1776.

 

[ksen]

Sure, you can print enough money to wipe out the debt, but paying $1 million for a loaf of bread and having the Chinese-led trade embargo bar any of your products from ever leaving your borders again would make it somewhat of a phyrric victory.

Who said anything about printing enough money to wipe out the debt immediately?

America is not Wermacht Germany.

 

[dismal]

The good news about there being no inflation boogie man is we can stop collecting taxes and just print the money we need.

And then once there are no more taxes in ksentopia we can get down to the serious business of printing enough money to buy us all unicorns.

 

[ksen]

The good news about there being no inflation boogie man is we can stop collecting taxes and just print the money we need.

hyperinflation =/= inflation

hth

And then once there are no more taxes in ksentopia we can get down to the serious business of printing enough money to buy us all unicorns.

Collect taxes and the difference between expenditures and tax receipts is printed to make up the difference. If there gets to be too much cash in the economy raise taxes to take some out of circulation.

But my main question in the thread is what would happen without a US bond market should the conservatives get their way and pay off the debt?

 

[Sarpedon]

There would be no reliable way to save money. With inflation destroying the value of bills overnight, and no bond market, people would be back to hoarding precious metal. And that of course only benefits those who have the metal. As usual, the poor get screwed. People would stop using the dollar, and move to safer currencies. You'd crash your economy, and have nothing to show for it, as no one would accept your paper any more. So that basically wrecks your idea of printing money to cover deficits. You'd quickly need an infinite amount of currency to cover your debts, because no one would accept your money. They'd demand payment in some other currency.

Also, must I point out that money in the form of currency bills is an insignificant proportion of actual 'money' in existence? Most money never leaves the banks, and therefore never needs to be printed, except on a ledger.

 

[dismal]

It's not true that there would be no bond market without US government debt.

 

[ksen]

It's not true that there would be no bond market without US government debt.

How would that work since a bond is a debt instrument?

 

[dismal]

It's not true that there would be no bond market without US government debt.

How would that work since a bond is a debt instrument?

Huh?

There are other entities that issue bonds besides the US govt.

 

[ksen]

How would that work since a bond is a debt instrument?

Huh?

There are other entities that issue bonds besides the US govt.

Ah, I didn't read your post closely enough and assumed your were staying on topic about the US government bond market instead of talking about the bond market as a whole.

I'll rephrase:

But my main question in the thread is what would happen without a US Treasury bond market should the conservatives get their way and pay off the debt?

 

[Loren Pechtel]

Sound like Utopia?

What would happen after the disappearance of the bond market?

The US doesn't have to have any debt. We can print the money we need to fund government out of thin air. But we don't do that.

Why? Is it because of the thirst for US debt?

Fixing the deficit with the printing press just leads to hyperinflation. The "cure" is worse than the disease.

 

[arkirk]

hyperinflation =/= inflation

hth

And then once there are no more taxes in ksentopia we can get down to the serious business of printing enough money to buy us all unicorns.

Collect taxes and the difference between expenditures and tax receipts is printed to make up the difference. If there gets to be too much cash in the economy raise taxes to take some out of circulation.

But my main question in the thread is what would happen without a US bond market should the conservatives get their way and pay off the debt?

Then...everything would be at the pleasure of those who collected the debt....mostly those who hold it today. Our current financial system is sort of a fiction the rich maintain that they are responsible for everything in everybody's life. Everything GOOD that is. The BAD stuff all comes from the lazy poor who need the leadership of the rich. Henry Ford thought at one time utopia would be everybody driving around in one of his Model T's.

 

[ksen]

Sound like Utopia?

What would happen after the disappearance of the bond market?

The US doesn't have to have any debt. We can print the money we need to fund government out of thin air. But we don't do that.

Why? Is it because of the thirst for US debt?

Fixing the deficit with the printing press just leads to hyperinflation. The "cure" is worse than the disease.

not necessarily

 

[Jayjay]

hyperinflation =/= inflation

One the the widely accepted definitions of hyperinflation is that it exceeds 100% over period of three years. US government spending in 2014 was about $3.5 trillion, and total US money supply is about $10.5 trillion. That amounts to about 33% annual inflation which in turn is about 137% over three years, which qualifies as hyperinflation.

Regardless of the academic definition, I'm curious why you think that this is would not be a problem. What would you do, if your salary was paid in a currency that you would know would lose at least one quarter of its value within a year?

 

[arkirk]

Sound like Utopia?

What would happen after the disappearance of the bond market?

The US doesn't have to have any debt. We can print the money we need to fund government out of thin air. But we don't do that.

Why? Is it because of the thirst for US debt?

Fixing the deficit with the printing press just leads to hyperinflation. The "cure" is worse than the disease.

How about fixing the onerous debt which the people don't actually owe with laws? We used to have laws against gambling because there are people who are capable of guaranteeing the average guy will lose his money at a fixed casino. You seem to think outfits like Goldman Sachs, Chase, Citi, and BofA are all legitimate. You seem to think they are operating just fine? These outfits loan out billions at two digit interest rates and pay on their account something like 1/10th of a percent.
When we look at our debt, most of it has been accrued by war mongers, resource thieves, and crooked banksters.

Dealing with these issues would not require a printing press so much as a fairer set of laws based on egalitarian needs.

 

[Harry Bosch]

There's no federal debt from the Tarp program. Tarp made money.