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AS DEFICIT EXPLODES, GOP DEMANDS EMERGENCY TAX CUT FOR THE RICH

SimpleDon

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The deficit is a red herring.

But we should be using our capacity to deficit spend, i.e. within the limits of acceptable inflation, for something other than making the obscenely rich more obscenely rich and trying to satisfy the insatiable Military-Industrial Complex.
 

SimpleDon

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This is 100% true.

Name me one job where someone doesn't work for a rich owner.

I will wait patiently for your answer.

0% false. The economy is driven by the demand for goods and services, it isn't constrained by the lack of financial capital, i.e. money to invest.

Why do you think that the opposite is true?

No business is going to invest in new production facilities without some certain belief that they can sell the products produced by the new facilities.
 

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I believe the budget was balanced under Clinton.

The republican hypocrisy is stunning. They have completely abandoned the usual anti democrat position on reckless spending and handing debt down to future generations.

Because it's common knowledge that "the debt" is meaningless. It's a boogeyman. Republicans raise the debt to pay for things, Democrats raise taxes to pay for things. "The savior" Bernie even wants to raise taxes on the middle class and poor!

No one wants taxes raised, that's why the majority of U.S. states are Republican. Republican states also have cheaper cost of living.

It's not a bogeyman, that borrowing has to be repaid at some point. So long as the amount isn't too great politicians can get away with kicking the can, but eventually that doesn't work. See Greece for an example.

And note that while Republican states tend to have a lower cost of living they also tend to have a lower standard of living. A low cost of living is to a large degree an indication that it's not a desirable place to live.

Greece is not a relevant example. Greece was not borrowing in its sovreign currency. The can can be indefinitely kicked down the road.
 

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It's not a bogeyman, that borrowing has to be repaid at some point. So long as the amount isn't too great politicians can get away with kicking the can, but eventually that doesn't work. See Greece for an example.

And note that while Republican states tend to have a lower cost of living they also tend to have a lower standard of living. A low cost of living is to a large degree an indication that it's not a desirable place to live.

Greece is not a relevant example. Greece was not borrowing in its sovreign currency. The can can be indefinitely kicked down the road.

Only by using inflation which harms the economy.
 

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Functioning economy depends on faith of those who trade in and with it. In the case of the US our military might provides confidence to those who treat with us and for us within that protection. On the other hand Greece has no credible military with which to threaten or protect. Russia would collapse if it didn't pose significant threat to others.

Debt doesn't create risk unless others want to recover enough to be willing to challenge us.

IOW it ain't gonna happen any time soon.

While working for navy we devised an algorithm through which F-14 pilots could see tactical advantage in airspeed and altitude. Potential energy is quite the thing.

If nothing else those of us who feel confident recognize the advantage of overwhelming military power. Unfortunately those who don't see that as benefit are against debt and military strength and science for that matter.

One can see where fear arises. It's from the unknown.

Last hominem. Money/debt threatens no one unless there is force behind it.
 
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Horatio Parker

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It's not a bogeyman, that borrowing has to be repaid at some point. So long as the amount isn't too great politicians can get away with kicking the can, but eventually that doesn't work. See Greece for an example.

And note that while Republican states tend to have a lower cost of living they also tend to have a lower standard of living. A low cost of living is to a large degree an indication that it's not a desirable place to live.

Greece is not a relevant example. Greece was not borrowing in its sovreign currency. The can can be indefinitely kicked down the road.

Only by using inflation which harms the economy.

Inflation has nothing to do with it.

The deficit is a residual indicating govt spending not taxed. That we issue debt and pay interest on it is a policy choice.
 

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Disagree--if more people get the skills for better jobs it will raise the pay for the shit jobs also because you won't have as many people available who can't do better.

(And it will cut down on the number of shit jobs as some will be automated.)

Somebody has to serve tables, cook, clean make beds, etc....not everyone can be doctors, lawyers or entrepreneurs. Doing necessary work should pay well.

In a wealthy nation such as America, nobody should be struggling if working full time.

You're completely missing my point. If more people have higher skills there won't be so much competition at the low end and thus wages will go up.

And expect to see automation reduce the demand for some of those jobs, also.

I'm pointing out saturation, that we only need so msny doctors or lawyers or engineers at any given period of time...so that there are those who have done a degree in their chosen field, but cannot find work, finding themselves driving taxis or waiting on tablea instead.
 

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You're completely missing my point. If more people have higher skills there won't be so much competition at the low end and thus wages will go up.

And expect to see automation reduce the demand for some of those jobs, also.

I'm pointing out saturation, that we only need so msny doctors or lawyers or engineers at any given period of time...so that there are those who have done a degree in their chosen field, but cannot find work, finding themselves driving taxis or waiting on tablea instead.

Loren is big on those unrealistic "ifs".
 

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This is 100% true.

Name me one job where someone doesn't work for a rich owner.

I will wait patiently for your answer.

0% false. The economy is driven by the demand for goods and services, it isn't constrained by the lack of financial capital, i.e. money to invest.

Why do you think that the opposite is true?

No business is going to invest in new production facilities without some certain belief that they can sell the products produced by the new facilities.

Nice try, but you can’t fix stupid.
 

skepticalbip

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The deficit is a red herring.

Agreed.

It isn't entirely true that the deficit is a red herring, though it may sometimes be overplayed.

The budget for 2019 was $4.45 trillion. Interest and repayment on the debt was about 9% of that budget or better than $400 billion. That means we spent $400 billion servicing the debt that could have gone to either increased services or reducing the budget and so tax burden. For example, that $400 billion is about four times as much as went to education.
 

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The deficit is a red herring.

But we should be using our capacity to deficit spend, i.e. within the limits of acceptable inflation, for something other than making the obscenely rich more obscenely rich and trying to satisfy the insatiable Military-Industrial Complex.

Oh, you don't know the facts.

3% of our budget is military. 10-15% of our budget is government handouts to the poor.

But military spending is the problem?

Might want to rethink what the facts say instead of listening to Democrats lie to you.

The poor don't even live in that bad of conditions anyway. Capitalism has made poor people basically live a life of luxury. Compare the life of a poor person in 1800 vs today. If we could bring those people to life today they'd be saying, "These are poor people??? They have cell phones, cars, indoor stoves, indoor heating/AC! They live like the rich did in our day!"

One of the kings back in the day (I forget which one) used to have 40 meals prepared for him every night for dinner and he would choose the one he wanted to eat. THAT was luxury back then! Now, you can do that by going to a supermarket and choosing anything with a few bucks.
 

skepticalbip

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The deficit is a red herring.

But we should be using our capacity to deficit spend, i.e. within the limits of acceptable inflation, for something other than making the obscenely rich more obscenely rich and trying to satisfy the insatiable Military-Industrial Complex.

Oh, you don't know the facts.

3% of our budget is military. 10-15% of our budget is government handouts to the poor.

But military spending is the problem?

Might want to rethink what the facts say instead of listening to Democrats lie to you.

The poor don't even live in that bad of conditions anyway. Capitalism has made poor people basically live a life of luxury. Compare the life of a poor person in 1800 vs today. If we could bring those people to life today they'd be saying, "These are poor people??? They have cell phones, cars, indoor stoves, indoor heating/AC! They live like the rich did in our day!"

You don't need to go back to 1800 for a comparison of what we call poverty and real poverty. A trip into rural Mexico will do and those Mexican poor do not rate as poor by the World Health Organization because they have too much, but many in Haiti do because they have nothing.
 
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Half-Life

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Oh, you don't know the facts.

3% of our budget is military. 10-15% of our budget is government handouts to the poor.

But military spending is the problem?

Might want to rethink what the facts say instead of listening to Democrats lie to you.

The poor don't even live in that bad of conditions anyway. Capitalism has made poor people basically live a life of luxury. Compare the life of a poor person in 1800 vs today. If we could bring those people to life today they'd be saying, "These are poor people??? They have cell phones, cars, indoor stoves, indoor heating/AC! They live like the rich did in our day!"

You don't need to go back to 1800 for a comparison of what we call poverty and real poverty. A trip into rural Mexico will do and those Mexican poor do not rate as poor by the World Health Organization, but many in Haiti do.

A lot of it is a mental problem. Homeless people want to be homeless because they have some mental block that prevents them from working. Think about it, those bums you see on off ramps begging cars for money, wouldn't their time be better spent walking around town and begging some places to hire them? Of course it would. But, they'd rather get handouts from people. It's easier than working to them.

I still see tons of people hanging outside 711 begging people for change instead of going inside and begging the manager to work the night shift or something. People hate the night shift. If you can find someone willing to do it, they'd be ecstatic!
 

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It's not a bogeyman, that borrowing has to be repaid at some point. So long as the amount isn't too great politicians can get away with kicking the can, but eventually that doesn't work. See Greece for an example.

And note that while Republican states tend to have a lower cost of living they also tend to have a lower standard of living. A low cost of living is to a large degree an indication that it's not a desirable place to live.

Greece is not a relevant example. Greece was not borrowing in its sovreign currency. The can can be indefinitely kicked down the road.

Only by using inflation which harms the economy.
There is no necessary link between the use of gov't debt and inflation. There is no necessary causation between inflation and harm to the economy. Hence your claim is wrong.
 

steve_bank

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If someone offed a credit card with no limit and all you had to do was make a monthly payment would that sound too good to be true.
 

laughing dog

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If someone offed a credit card with no limit and all you had to do was make a monthly payment would that sound too good to be true.
Personal finance is not the same as government finance. People cannot issue currency to pay debts: governments can. People cannot tax others to pay debts: governments can.
 

skepticalbip

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If someone offed a credit card with no limit and all you had to do was make a monthly payment would that sound too good to be true.
Personal finance is not the same as government finance. People cannot issue currency to pay debts: governments can. People cannot tax others to pay debts: governments can.
Unfortunately, some politicians think this way too. It has been tried several times in several different countries and has had disastrous consequences for the citizenry. The latest example is Venezuela... their currency, the Bolivar, is now worthless.
 

SimpleDon

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Poor people don't create jobs for themselves, Keith. They get them from rich people who open businesses..
i gave you three jobs in my family alone.
Identify three rich people who were necessary for those jobs?

Outliers are not the norm, Keith.

Most everyone works a job where they work for a rich owner, which means it's in the worker's best interest to keep the company going so they don't close and lose their jobs.

You can't have it both ways, Keith. You can't blast the rich for creating all these jobs and then turn around and also blast the rich when the company closes. We see how many people complain when the company goes under. They know they need the rich guy's company to survive at that point.

The huge income inequality that has been created by the sloppy thinking that you indulge in is the single greatest threat to capitalism. It is much greater than the threat of socialism.

By and large, businesses are run by professional managers, not by rich people who invest in the company. These professional managers use retained profits to invest in the company or they borrow the needed money from banks or they issue corporate bonds, they don't raise the required money from the stock market or by soliciting it from rich people.

The now dangerously high-income inequality was created by suppressing wages to increase profits. This was an intentional result of many different ideas perpetuated without any regard for the realities of the economy. The one that you have been victimized by here is that the rich create jobs by investing, usually in the stock market. Once again, jobs are created by businesses making investments because they feel that there exists unmeet demand for the products that will be produced. Your simplistic assertion that the rich create jobs by investing their money is saying that businesses invest because there is money available.

Capitalism doesn't depend on competition in a free market, another of your unrealistic ideas. If it did depend on that we would never have a working market system. The free market is a fantasy. There has never been a free market independent of the government in the entire history of man and his civilizations. Please provide the list of self-regulating free markets that have convinced you that it is possible.
 

SimpleDon

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but you didn't even say 'most' jobs, did you?
You just offered a blanket truth that does not stand up to scrutiny, nor does it answer anything to the OP. Just a conservative talikng point that pretends to be a juddtification for prostitution.
but tgey do not HAVE to.
Not all restaurants are national chains.
Not all businesses must belong to a priviledged few.
Co-ops are quite possible, and thus we do not NEED the parasite rich.

But whst does thus have to do with the national debt and the GOP?

It is about tax cuts for the rich, Keith. I am showing why it's necessary.

The workers can not run the company. They would run it into the ground. This is why we have the smart people running it. Labor is not a reason to pay someone money. Like Ben Shapiro said, "you can spend all day digging 10 foot deep holes in your backyard. No one would deny that it was very hard work and you put a lot of effort into it. But, to go around and demand that someone pay you for doing that is quite stupid. People will laugh at you. Nobody will pay you just because you put in hard work and effort."

Reember why immigrants used to flock here? It was because wages were soaring due to unregulated capitalism. They didn't come here to work for less money, they came here to work for more money. Now we have so many regulations and wages are stagnant. Blame Democrats for this. Republicans hate regulations. They want everyone to get paid handsomely. But, Democrats want regulations out of the ass, Keith. This slows the economy. Trump is undoing regulations that Obama did and the economy is booming again.

I take it that you are ready to take up the long-standing challenge to list the regulations that cost us jobs in the economy. This challenge has stood unanswered for more than five years.

Go ahead.
 

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If someone offed a credit card with no limit and all you had to do was make a monthly payment would that sound too good to be true.
Personal finance is not the same as government finance. People cannot issue currency to pay debts: governments can. People cannot tax others to pay debts: governments can.
Unfortunately, some politicians think this way too. It has been tried several times in several different countries and has had disastrous consequences for the citizenry. The latest example is Venezuela... their currency, the Bolivar, is now worthless.
The currencies of Germany, France, Italy, Japan, and the USA are doing fine.
 

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Unfortunately, some politicians think this way too. It has been tried several times in several different countries and has had disastrous consequences for the citizenry. The latest example is Venezuela... their currency, the Bolivar, is now worthless.
The currencies of Germany, France, Italy, Japan, and the USA are doing fine.
That is because they don't print as much money as they want to cover any debt they want to accrue. Their increase in currency in circulation is tied to their GDP growth. Germany after WWI, Zimbabwe, etc. printed money to cover debt and the citizenry suffered because of it as the currency became worthless. Venezuela didn't learn from their example and, apparently, you didn't either.
 
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laughing dog

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Unfortunately, some politicians think this way too. It has been tried several times in several different countries and has had disastrous consequences for the citizenry. The latest example is Venezuela... their currency, the Bolivar, is now worthless.
The currencies of Germany, France, Italy, Japan, and the USA are doing fine.
That is because they don't print as much money as they want to cover any debt they want to accrue.
Their increase in currency in circulation is tied to their GDP growth.
Right, and it can be used to pay off debt as well without causing inflation or economic harm.
[
Germany after WWI, Zimbabwe, etc. printed money to cover debt and the citizenry suffered because of it as the currency became worthless. Venezuela didn't learn from their example and, apparently, you didn't either.
I pointed out that governments, unlike people, can print currency and tax which makes their financial situation different than that of people. Are you disputing that characterization?

I made no claim about the appropriate or desired policy to pay off gov't debt, so why are you babbling about Germany after WWI (you forgot Hungary and Austria), Zimbabwe and Venezuela?
 

Elixir

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48 percent of all US employees work for small businesses, down from 52 percent in the early 2000s. 18 percent of all US employees work for businesses with fewer than 20 employees. Small businesses accounted for over half of net job creation in 2014. Anyone who calls 48 percent of people "outliers" should be mindful that their Orange Avatar got only 48% in 2016.
 

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48 percent of all US employees work for small businesses, down from 52 percent in the early 2000s. 18 percent of all US employees work for businesses with fewer than 20 employees. Small businesses accounted for over half of net job creation in 2014. Anyone who calls 48 percent of people "outliers" should be mindful that their Orange Avatar got only 48% in 2016.

So you're saying that small busineses run the country, not billionaires and the 1%?

Are you finally a Republican now?
 

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48 percent of all US employees work for small businesses, down from 52 percent in the early 2000s. 18 percent of all US employees work for businesses with fewer than 20 employees. Small businesses accounted for over half of net job creation in 2014. Anyone who calls 48 percent of people "outliers" should be mindful that their Orange Avatar got only 48% in 2016.

So you're saying that small busineses run the country, not billionaires and the 1%?

Are you finally a Republican now?
And again, there's nothing like that in whst you quoted. Please justify this interpretation of that post.
 

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The deficit is a red herring.

But we should be using our capacity to deficit spend, i.e. within the limits of acceptable inflation, for something other than making the obscenely rich more obscenely rich and trying to satisfy the insatiable Military-Industrial Complex.

Oh, you don't know the facts.

3% of our budget is military. 10-15% of our budget is government handouts to the poor.

But military spending is the problem?

Might want to rethink what the facts say instead of listening to Democrats lie to you.

WTF???
 

Elixir

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48 percent of all US employees work for small businesses, down from 52 percent in the early 2000s. 18 percent of all US employees work for businesses with fewer than 20 employees. Small businesses accounted for over half of net job creation in 2014. Anyone who calls 48 percent of people "outliers" should be mindful that their Orange Avatar got only 48% in 2016.

So you're saying that small busineses run the country, not billionaires and the 1%?

Are you finally a Republican now?
And again, there's nothing like that in whst you quoted. Please justify this interpretation of that post.

Perhaps I should clarify that those facts were presented solely to shed light on the mendacity and lack of forthrightness in HL's contrary assertion. It is not true that the 48% of all working Americans who work for small businesses are "outliers". To assert that they are, is to LIE or to express an ignorance-based belief.
 
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steve_bank

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If someone offed a credit card with no limit and all you had to do was make a monthly payment would that sound too good to be true.
Personal finance is not the same as government finance. People cannot issue currency to pay debts: governments can. People cannot tax others to pay debts: governments can.

But it is. The federal government as the business that it is BORROWS MONEY. You can look up how much we owe China. There has been occasions in modern times when the federal international credit rating dropped. That means the cost to borrow goes up. It is the same with the individual states.

Federal financing is a balancing act. With the Trump tax cuts revenue has dropped and debt accelerating. The key word is DEBT. The borrowed debt at any tine has a principal amount plus interest owed. Just like your auto loan.

What do you think happens if we default to China or China sells the debt?

The U.S. debt to China is $1.07 trillion as of December 2019.    That's 16% of the $6.7 trillion in Treasurybills, notes, and bonds held by foreign countries The rest of the $23 trillion national debt is owned by either the American people or by the U.S. government itself.

If you buy T bills you are loaning money to the government. When it comes time to pay you back with interest where does the money come from?

Of wait I forgot, if the government runs short of money it can just print more, right?
 

steve_bank

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https://en.wikipedia.org/wiki/National_debt_of_the_United_States

The national debt of the United States is the total debt, or unpaid borrowed funds, carried by the federal government of the United States, which is measured as the face value of the currently outstanding Treasury securities that have been issued by the Treasury and other federal government agencies. The terms "national deficit" and "national surplus" usually refer to the federal government budget balance from year to year, not the cumulative amount of debt. A deficit year increases the debt, while a surplus year decreases the debt as more money is received than spent.

There are two components of gross national debt:[1]
"Debt held by the public" – such as Treasury securities held by investors outside the federal government, including those held by individuals, corporations, the Federal Reserve System, and foreign, state and local governments.
"Debt held by government accounts or intragovernmental debt" – are non-marketable Treasury securities held in accounts of programs administered by the federal government, such as the Social Security Trust Fund. Debt held by government accounts represents the cumulative surpluses, including interest earnings, of various government programs that have been invested in Treasury securities.

In general, government debt increases as a result of government spending, and decreases from tax or other receipts, both of which fluctuate during the course of a fiscal year. In practice, Treasury securities are not issued or redeemed on a day-by-day basis,[2] and may also be issued or redeemed as part of the federal government's macroeconomic management operations.

Historically, the US public debt as a share of gross domestic product (GDP) has increased during wars and recessions, and subsequently declined. The ratio of debt to GDP may decrease as a result of a government surplus or due to growth of GDP and inflation. For example, debt held by the public as a share of GDP peaked just after World War II (113% of GDP in 1945), but then fell over the following 35 years. In recent decades, aging demographics and rising healthcare costs have led to concern about the long-term sustainability of the federal government's fiscal policies.[3] The aggregate, gross amount that Treasury can borrow is limited by the United States debt ceiling.[4]

As of February 2020, federal debt held by the public is 17.23 trillion and intragovernmental holdings were $6.02 trillion, for a total national debt of $23.3 trillion.[5] At the end of 2018, debt held by the public was approximately 76.4% of GDP,[6][7] and approximately 29% of the debt held by the public was owned by foreigners.[8] The United States has the largest external debt in the world. In 2017, the US debt-to-GDP ratio was ranked 43rd highest out of 207 countries.[9] The Congressional Budget Office forecast in April 2018 that debt held by the public will rise to nearly 100% of GDP by 2028, perhaps higher if current policies are extended beyond their scheduled expiration date.[10]
 

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But it is. The federal government as the business that it is BORROWS MONEY. You can look up how much we owe China. There has been occasions in modern times when the federal international credit rating dropped. That means the cost to borrow goes up. It is the same with the individual states.
Try to focus. Households, businesses and governments can choose to incur debt. Ehen the debt comes due, all three can choose to either repay the debt or try to refinance it, The difference is that households and businesses sources for repayment are saving, or selling assets. Governments have these options plus the options of taxation and printing money (at the national level). So gov’t finance is not the same as household finance.
 

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Why go into debt if you can just print as much money as you like, ha, ha....

Sure. Issuing debt is a legacy from the gold standard. Now it functions as a tool to maintain the interbank interest rate.

Or we could issue only three month treasuries.
 

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I think laughing dog has already explained, several times, that there's a difference between government debt and business/personal debt, but there's a couple more differences that bear emphasis.

Firstly, the government is immortal. People retire, businesses mature, but the government can be treated as if it's going to be around forever. it doesn't need to pay down its debt before it's made old or redundant.

Secondly, the economy is (almost) always growing, which means the government is constantly increasing its revenues, which in turn means that it can service increasing amounts of debt over time. No person or business can count on that kind of growth--not even Amazon. The money supply is also increasing constantly, maintaining inflation. As inflation reduces the real value of the US dollar, it also reduces the effective size of the debt over time. If the interest rate on the debt is close to the rate of inflation then the real value of the debt stays fairly constant, and shrinks as a percentage of the government's income.

Basically, the government is constantly increasing its income forever. As long as the country maintains economic growth, the government can go into increasing amounts of debt.

There are limits on how much the government can borrow: If the economy stops growing, the government won't have enough money to pay its debts, and creditors will stop buying government debt at low interest rates. If the government borrows too much it might not be able to service the debt. There's a sensible amount of debt someone between "no debt" and "infinite debt", and that number is constantly changing based on the state of the economy.


steve_bank said:
What do you think happens if we default to China or China sells the debt?

Why would either of those things happen? In order for the US to get to a point where it can't pay its debts to China, the US economy would have to be royally fucked, like total-economic-collapse fucked and China's reaction would be the least of your concerns. And China won't sell the bloody debt; doing so would fuck China just as badly as it would fuck the US.
 

funinspace

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Oh, you don't know the facts.

3% of our budget is military. 10-15% of our budget is government handouts to the poor.

But military spending is the problem?

Might want to rethink what the facts say instead of listening to Democrats lie to you.

WTF???

It's Orange Imaginary Math, its not supposed to have any basis in reality.
 

Horatio Parker

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But it is. The federal government as the business that it is BORROWS MONEY. You can look up how much we owe China. There has been occasions in modern times when the federal international credit rating dropped. That means the cost to borrow goes up. It is the same with the individual states.

Federal financing is a balancing act. With the Trump tax cuts revenue has dropped and debt accelerating. The key word is DEBT. The borrowed debt at any tine has a principal amount plus interest owed. Just like your auto loan.

What do you think happens if we default to China or China sells the debt?

China will be the loser. They are assuming the risk. We get stuff, they get numbers in the Fed computer.

Issuing debt and borrowing are not the same. The govt spends first, then issues debt. Not like a business.
The U.S. debt to China is $1.07 trillion as of December 2019.    That's 16% of the $6.7 trillion in Treasurybills, notes, and bonds held by foreign countries The rest of the $23 trillion national debt is owned by either the American people or by the U.S. government itself.

If you buy T bills you are loaning money to the government. When it comes time to pay you back with interest where does the money come from?

Of wait I forgot, if the government runs short of money it can just print more, right?

Yes. Deficits are a feature, not a bug. If the govt taxed back all of the money it spent every year, no one else would have any. So the debt reflects the money spent into existence and held by either private citizens or trading partners.

Nations running surpluses do so because they ship their resources overseas in exchange for financial promises.
 

SimpleDon

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It makes absolutely no sense to believe that giving the wealthy another tax break will help the economy.
But Halfie isn't even suggesting that.
ALL he wants is to keep The Rich happy.
It's in our interest as workers that The Rich keep providing all these jobs...

Except.
Most non-chain stores suffer from the big box stores. If we RAISE taxes on the Rich, and Halfie thinks they would, what, shut down the money-making business that made them rich (?!), that might be better. If McD's and Burger King and Wendy's closed, business would increase at Big Bad Wolf's BBQ, and Josh-B-Gosh, and Martelli Pizza around town.
And there would be at least seven empty buildings for some new business to open in, already set up with a freezer and a drive-through.

Halfie might be on to something. We should tax the living shit out of the rich, get them to defensively and punitively close the big-box stores and chains. And watch locals take over the vacuum thus created.

Keith, think of the mall. Most people who are on the left see the mall as everything wrong with capitalism. Now, just imagine the whole mall shut down. That's thousands of employees out of work. Is that a good thing, Keith? No way. People need these businesses in order for them to make a living and put food on the table. Calling the mall "a cesspool of capitalism" is spitting on all the workers who make a living there. Why would you rather have people out of work? Makes no sense.

Your understanding of economics is breathtaking in its simplicity.

Of course, people have to have jobs to live. Likewise, capitalism depends on people having jobs to provide the money to buy the products produced by the economy. You wouldn't be wrong to say that in order for people to become rich other people have to have jobs to provide the money that the other people need to buy the products produced by the rich people's businesses.

Rather than an absolute, your understanding that the rich provide the jobs, it is more of a needed balance to maintain the health of the economy. The question then becomes where is it best for the economy to set the balance?

There is a way to determine this too if you care to listen. I suspect that your view of the economy is based on who you hear something from based on your dependence on the right/left, good/bad arguments that seem to be the sum of your reasoning on the economy.

I think that I can explain it to you. It is really quite simple but it does require effort on your part.

Also, tax the rich to high Heaven and they will take their companies to another country with lower tax rates and all the jobs will really be gone. Nobody would be laughing then, Keith.

This is pretty much what has happened over the last forty years or so. Apparently our politicians decided that we should undertake the largest foreign aid project in the history of the world to benefit Communist China, our ideological and geopolitical opponent. Why this was done certainly is pertinent to our discussions here.

The rich aren't as motivated by taxes as they are by profits. Profits go almost exclusively to the rich and after all, they have to earn profits before they have to worry about taxes.

Profits are a necessary part of capitalism. They provide the needed incentives and the needed funds to invest. As noted above they are also what makes the already rich even richer.

The absolute genius of capitalism is that it channels what otherwise is an undesirable human characteristic, greed, into a socially desirable purpose, providing sustenance for a nation's population. But unchanneled greed is still undesirable even in a capitalistic economy. And it is unchanneled greed on the part of the rich combined with their complete control of one of the two political parties and partial control of the other that produced these threats to our capitalistic economy.

Profits are what a business has left after they have paid all of the bills. For most businesses, one of the largest bills that they have is their employees' wages. The fastest route to higher profits is to suppress their employees' wages. There is no more effective way to do this than to put your employees in competition with the workers in a low wage country like communist China. Even the threat of moving to the PRC has the effect of lowering wage demands from their current employees.

However, suppressing wages provides less money in the hands of the workers, money to purchase the products of the rich peoples' businesses. And no,

  • The economy is not put back in balance by the lower cost of the Chinese products allowing US workers to buy more with their suppressed wages.
  • The businesses are not interested in reducing the cost of the products to the consumers, they are after the increased profits guaranteeing that the consumers' price will not reflect the savings in the wages.
  • The other results of the already rich's control of the government, the increases in the real estate valuations increasing housing costs and the increases in college tuition bought about by the rich's aversion to taxes and the fidelity to which state governments bend to it, completely wipe out any benefit from the lower cost.
 
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Elixir

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It makes absolutely no sense to believe that giving the wealthy another tax break will help the economy.
But Halfie isn't even suggesting that.
ALL he wants is to keep The Rich happy.
It's in our interest as workers that The Rich keep providing all these jobs...

Except.
Most non-chain stores suffer from the big box stores. If we RAISE taxes on the Rich, and Halfie thinks they would, what, shut down the money-making business that made them rich (?!), that might be better. If McD's and Burger King and Wendy's closed, business would increase at Big Bad Wolf's BBQ, and Josh-B-Gosh, and Martelli Pizza around town.
And there would be at least seven empty buildings for some new business to open in, already set up with a freezer and a drive-through.

Halfie might be on to something. We should tax the living shit out of the rich, get them to defensively and punitively close the big-box stores and chains. And watch locals take over the vacuum thus created.

Interesting...
When we moved here from Boulder in 1996 there was McDonalds, Wendy's, Sonic, Burger King, KFC ... and not a decent restaurant in town. Then every one of them except McDonalds went out of business. Now there are small upscale dining places and a good number of decent mid-priced options. Much better IMHO, though I do occasionally miss KFC. :(
 

Canard DuJour

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Wikipedia said:
In a monetarily sovereign country such as the United States of America, the United Kingdom and most other countries, government debt held in the home currency are merely savings accounts held at the central bank. In this way this "debt" has a very different meaning to the debt acquired by households who are restricted by their income. Monetarily sovereign governments issue their own currencies and do not need this income to finance spending.

A central government with its own currency can pay for its nominal spending by creating money ex novo,[3] although typical arrangements leave money creation to central banks. In this instance, a government issues securities to the public not to raise funds, but instead to remove excess bank reserves (caused by government spending that is higher than tax receipts) and '...create a shortage of reserves in the market so that the system as a whole must come to the [central] Bank for liquidity.'

https://en.wikipedia.org/wiki/Government_debt

Govt "borrowing" is not like a borrower taking out a bank loan; more like a bank receiving a saver's deposit and paying a bit of interest on it.

Isn’t it Time to Stop Calling it “The National Debt”?

Fourteen. Trillion. Dollars. That’s how much the U.S. government “owes.” You hear that massive number all the time, right? And people are forever telling you that you and your family are on the hook to pay off that scary huge number. There are 125 million U.S. households. You do the arithmetic. The horror.

What those scare-mongers don’t tell you, and generally don’t even understand: it actually makes almost no sense to call that figure “the national debt.” And no, you’re not on the hook to pay it back.

..article continues
 

ZiprHead

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Oh, you don't know the facts.

3% of our budget is military. 10-15% of our budget is government handouts to the poor.

But military spending is the problem?

Might want to rethink what the facts say instead of listening to Democrats lie to you.

WTF???

It's Orange Imaginary Math, its not supposed to have any basis in reality.

Makes you wonder where he come up with such pure, unadulterated BS.
 

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steve_bank

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But it is. The federal government as the business that it is BORROWS MONEY. You can look up how much we owe China. There has been occasions in modern times when the federal international credit rating dropped. That means the cost to borrow goes up. It is the same with the individual states.
Try to focus. Households, businesses and governments can choose to incur debt. Ehen the debt comes due, all three can choose to either repay the debt or try to refinance it, The difference is that households and businesses sources for repayment are saving, or selling assets. Governments have these options plus the options of taxation and printing money (at the national level). So gov’t finance is not the same as household finance.

Six of one half a dozen of the other. Incurred debt is debt regardless, which is owed and on which interest accrues.

Debt, deficit, and inflation are structural parts of the system which is based on growth. In a healthy economy there is a balance between debt, wage growth, inflation, and GDP growth.

Trumps bossiness history has all been maximize short term profit ignoring debt and revenue, managing to escape with cash while it falls apart. That is how he views stoking the economy hot with large tax cuts ignoring debt which have the effect of high short term gains for the wealthy.

You buy a T bill assuming the economy and government revenue will grow in the future such that you will get your money back plus interest. Trump is messing with that with his tax cuts.

If we default to China then it goes to international courts like any bankruptcy.

I'd have to look it up, I believe in the 90s a state was close to or went bankrupt.

When a business needs to fund a project and is short of cash it borrows or issues stock.

The federal government is a business. It has employees, revenue, and delivers goods and services. To finance project like roads or a war it must raise cash. T bills as a form of stock, or loans.

Local, state, and federal governments issue bonds to raise cash. American bonds and T bills have always been consider low return but safe investments. Take that away that faith by projections of becoming unable to sustain debt and problems occur.

It is all based on future revenue business or government.
 

Horatio Parker

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But it is. The federal government as the business that it is BORROWS MONEY. You can look up how much we owe China. There has been occasions in modern times when the federal international credit rating dropped. That means the cost to borrow goes up. It is the same with the individual states.
Try to focus. Households, businesses and governments can choose to incur debt. Ehen the debt comes due, all three can choose to either repay the debt or try to refinance it, The difference is that households and businesses sources for repayment are saving, or selling assets. Governments have these options plus the options of taxation and printing money (at the national level). So gov’t finance is not the same as household finance.

Six of one half a dozen of the other. Incurred debt is debt regardless, which is owed and on which interest accrues.

Debt, deficit, and inflation are structural parts of the system which is based on growth. In a healthy economy there is a balance between debt, wage growth, inflation, and GDP growth.

Trumps bossiness history has all been maximize short term profit ignoring debt and revenue, managing to escape with cash while it falls apart. That is how he views stoking the economy hot with large tax cuts ignoring debt which have the effect of high short term gains for the wealthy.

You buy a T bill assuming the economy and government revenue will grow in the future such that you will get your money back plus interest. Trump is messing with that with his tax cuts.

If we default to China then it goes to international courts like any bankruptcy.

I'd have to look it up, I believe in the 90s a state was close to or went bankrupt.

When a business needs to fund a project and is short of cash it borrows or issues stock.

The federal government is a business. It has employees, revenue, and delivers goods and services. To finance project like roads or a war it must raise cash. T bills as a form of stock, or loans.

Local, state, and federal governments issue bonds to raise cash. American bonds and T bills have always been consider low return but safe investments. Take that away that faith by projections of becoming unable to sustain debt and problems occur.

It is all based on future revenue business or government.

You're wrong, plain and simple. What business can issue currency to retire its own debt? None. Govts can and do. If it's in the national interest to keep bond rates low, the Treasury can direct the Fed to buy the debt issues. Show me a business that can do that.

Put simply, govts with a sovereign currency are not revenue constrained. Period.
 

SimpleDon

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<<massive snip>>​

<<massive snip>>​

That is an interesting list. However, there are many questions about these businesses.

If an employee joins, do they immediately get the same ownership of the company as people who have been there since the beginning?

How did they get a business loan?

If someone quits, are they out of all their shares and become broke?

Who is liable for the risk and losses if the company tanks? All employees become broke as a joke?

I can help. I am a professional engineer and have been involved in two employee-owned engineering companies, one that I worked for and one that we set up for my wife who is also a professional engineer. I also was involved in turning a shop that we had owned into an employee-owned business, unsuccessfully as it turned out.

You may not know that our economy depends not just on a market model were goods and services are offered for sale under some degree of competition. It also depends on a professional model where licensed professionals have to answer to a higher standard than profit. The examples are many; doctors, lawyers, pharmacists, teachers, architects, the military, policemen, and my profession, engineering. All of the professions have a higher calling to society than making a profit.

My engineering profession has a duty to provide society with safe and functional products and industrial installations. I would include the government workers in the list of professionals, in spite of their not being licensed because they have a higher obligation to society than making a profit.


Question: If an employee joins, do they immediately get the same ownership of the company as people who have been there since the beginning?

Answer: Everyone has to buy the stock in the company, both legacy employees and the new hires. Most do it with some kind of installment plan. A regular deduction from their paycheck. The money from the stock sales is financial capital for the company.

To buy the stock in the company you have to be an employee. In the professional engineering firms that I was associated with engineers with their PE certificates had five years to buy their own stock in the company if they were available. This was a requirement from our errors and omissions underwriters. If they hadn't bought a sufficient amount of stock after five years.

Question: If someone quits, are they out of all their shares and become broke?

Answer: Employees who leave the company have to sell their stock either to any one of the employees who want it or back to the corporation, usually at a discount.

Question: How did they get a business loan?

Answer: They call the bank and apply. If they have a good business use for the loan, the bank will approve it. Like any other businesses employee-owned corporations own assets and make profits.
 

steve_bank

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Six of one half a dozen of the other. Incurred debt is debt regardless, which is owed and on which interest accrues.

Debt, deficit, and inflation are structural parts of the system which is based on growth. In a healthy economy there is a balance between debt, wage growth, inflation, and GDP growth.

Trumps bossiness history has all been maximize short term profit ignoring debt and revenue, managing to escape with cash while it falls apart. That is how he views stoking the economy hot with large tax cuts ignoring debt which have the effect of high short term gains for the wealthy.

You buy a T bill assuming the economy and government revenue will grow in the future such that you will get your money back plus interest. Trump is messing with that with his tax cuts.

If we default to China then it goes to international courts like any bankruptcy.

I'd have to look it up, I believe in the 90s a state was close to or went bankrupt.

When a business needs to fund a project and is short of cash it borrows or issues stock.

The federal government is a business. It has employees, revenue, and delivers goods and services. To finance project like roads or a war it must raise cash. T bills as a form of stock, or loans.

Local, state, and federal governments issue bonds to raise cash. American bonds and T bills have always been consider low return but safe investments. Take that away that faith by projections of becoming unable to sustain debt and problems occur.

It is all based on future revenue business or government.

You're wrong, plain and simple. What business can issue currency to retire its own debt? None. Govts can and do. If it's in the national interest to keep bond rates low, the Treasury can direct the Fed to buy the debt issues. Show me a business that can do that.

Put simply, govts with a sovereign currency are not revenue constrained. Period.

Maybe the analogy is not perfect, but owed debt is owed debt. In business it has to be covered by sales, in government it has to be covered by taxes and other govt revenues. Functionally no difference.

Borrowing to an unattainable level is what it is regardless.

Continuing deficit spending is a a like a business trying to expand beyond its revenue capacity to support debt. Eventually the business fails.

Are you arguing increasing debt and deficit spending without bounds is not a problem?
 

Loren Pechtel

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Only by using inflation which harms the economy.

Inflation has nothing to do with it.

The deficit is a residual indicating govt spending not taxed. That we issue debt and pay interest on it is a policy choice.

If you don't issue debt to fund it you're driving up the money supply. The usual result is a currency that becomes basically worthless and huge damage to the economy.
 

Horatio Parker

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Six of one half a dozen of the other. Incurred debt is debt regardless, which is owed and on which interest accrues.

Debt, deficit, and inflation are structural parts of the system which is based on growth. In a healthy economy there is a balance between debt, wage growth, inflation, and GDP growth.

Trumps bossiness history has all been maximize short term profit ignoring debt and revenue, managing to escape with cash while it falls apart. That is how he views stoking the economy hot with large tax cuts ignoring debt which have the effect of high short term gains for the wealthy.

You buy a T bill assuming the economy and government revenue will grow in the future such that you will get your money back plus interest. Trump is messing with that with his tax cuts.

If we default to China then it goes to international courts like any bankruptcy.

I'd have to look it up, I believe in the 90s a state was close to or went bankrupt.

When a business needs to fund a project and is short of cash it borrows or issues stock.

The federal government is a business. It has employees, revenue, and delivers goods and services. To finance project like roads or a war it must raise cash. T bills as a form of stock, or loans.

Local, state, and federal governments issue bonds to raise cash. American bonds and T bills have always been consider low return but safe investments. Take that away that faith by projections of becoming unable to sustain debt and problems occur.

It is all based on future revenue business or government.

You're wrong, plain and simple. What business can issue currency to retire its own debt? None. Govts can and do. If it's in the national interest to keep bond rates low, the Treasury can direct the Fed to buy the debt issues. Show me a business that can do that.

Put simply, govts with a sovereign currency are not revenue constrained. Period.

Maybe the analogy is not perfect, but owed debt is owed debt. In business it has to be covered by sales, in government it has to be covered by taxes and other govt revenues. Functionally no difference.

Borrowing to an unattainable level is what it is regardless.

Continuing deficit spending is a a like a business trying to expand beyond its revenue capacity to support debt. Eventually the business fails.

Are you arguing increasing debt and deficit spending without bounds is not a problem?

Operationally, there's no problem. You don't appear to understand that. You still think national govts are businesses.

If spending outpaces production, that's bad. If OTOH there are enough goods and services to absorb the spending, then it's ok.

Greece is a currency user, not an issuer. Borrowing in foreign currency is how countries get into trouble. A sovereign currency issuer can always pay debts denominated in its own currency.

State and local govts are revenue constrained.
 

Loren Pechtel

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The deficit is a red herring.

Agreed.

It isn't entirely true that the deficit is a red herring, though it may sometimes be overplayed.

The budget for 2019 was $4.45 trillion. Interest and repayment on the debt was about 9% of that budget or better than $400 billion. That means we spent $400 billion servicing the debt that could have gone to either increased services or reducing the budget and so tax burden. For example, that $400 billion is about four times as much as went to education.

And note that that is with very low interest rates. Look at what happens if the interest rates go up.
 
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