Most people don't seem to understand that America's "debt" is only other countries investing in US dollars and is a mathematical necessity of our trade deficit. Is our debt a problem?
I think that is an oversimplification of what our debt is as a country. There are many components, not just any one thing, it can be a problem if certain circumstances happen.
Do you see anyone clamoring for repayment? Because they see it as a good investment.
Exactly my point.
Now, if the government were much smaller...
Wouldn't stop our so-called debt.
Interest on the loans is paid monthly from our tax dollars
True but my point is that it's a mathematical necessity, not a government budgeting problem.
When we trade with another country, the green pieces of cotton we give them can only go either to US goods or to US bonds. If we but more goods than they buy from us, the money will go automatically to US bonds. This is referred to as a debt.
So, I'm not sure, but I think that you're advocating for more US debt. Is that right?
Our "debt" is beyond our control. It depends how many people want to invest in the US dollar by buying bonds. The debate in the floor of congress is if we should use that revenue.
I see. And I realize that a lot of Americans retirement is tied up in US debt. Which would be fine, if I didn't think that the interest on the debt will exceed the tax base before the end of 2040. We'll end up like Greece trying to borrow money to pay our debts with no way to pay it back. I see riots in our future.
And you do realize that all US money is borrowed from the federal reserve. So we can't pay back all the debt or there won't be any more money.
We can only go bankrupt if we owe in currency we can't print. But we can print it. So we will never go bankrupt.
And don't start me on inflation....
I understood. Weimar Republic.
They owed money in other currencies.
They printed so much money that they ran out of paper. They started printing on grocery sacks.
Won't happen to us for three reasons.
1-our debt won't need to be paid all at once.
2-we owe in dollars, so inflation won't increase our debt.
3-inflation is unlikely anyway because our economy is a lot bigger than theirs and can handle a greater influx of money.
Who told you all this? Your professor?
Economics. Do you want specific economists? Paul Krugman is good, as is "The Great Rebalancing" by Michael Pettis.
Are you listening to bankers to tell you about borrowing and the debt? That's like listening to the used car salesman to figure out how much car you can afford.
It's economics. Logic.
Just in case you forgot. Here's a quick recap on the Ponzi scheme they call the federal reserve. youtu.be/0xvUw73pQTI
I'll watch the video one sec
You know that this can't last and it's all going to collapse one day. You can't just go on printing money to pay your debts. It's obvious
Obvious to who? Why?
The video seems all fear mongering with no facts.
Because it's a Ponzi scheme. You can't pay off debt with borrowed money. It never works.
Nothing to do with debt is prosperity. Debt is simply investors investing in US bonds.
Pay off debt with borrowed money? What?
Well. It's not a very good one. It's just a quickie video. But it is scary.
Ooh loud music! And scary pictures! Who cares that facts don't back it up!
When you have more expenses than income, then you have to borrow to pay the bills plus the debt, and that's what we do.
No, people choose to buy bonds. This is income. We spend that income.
Of course. That's how they get money. They print money from thin air and sell them as bonds. The federal government buys bonds with IOUs from the federal reserve, which is just big secret banks. Then the government has to pay back the IOU plus interest on money they never had in the first place. Do you see the never ending cycle that will ultimately get worse and worse?
This is a good explanation youtu.be/iFDe5kUUyT0
Goldz, you are seriously mistaken. China has been the biggest buyer of US debt. They are buying less debt. They want to diversify into other currencies. If there are no buyers, the FED is the lender of last resort to the US government. And printing more and more money makes it worth less.
I've seen the video before. It's simply untrue. The fed lends money to banks, not US government.
@lcamino - "China" = Chinese businessmen who sell goods to the US.
Anyway as I've said we can print money without causing inflation if our economy isn't producing at full capacity. If inflation occurs we can raise interest rates to combat it.
All talking points from the people who bring you big banks and the Ponzi scheme, the federal reserve. They really want you to believe that don't they. Because if you stop, they are finished. Stop drinking the cool aid.
More like basic economics...... But okay
Good luck on raising interest rates.
When I'm chairman of the federal reserve.
The Chinese government has been selling treasuries.
Whose treasuries they've been selling and to whom
Goldz, you're better than that. These big big banks borrow money from the government who borrowed it from the federal reserve at almost zero interest. Then they loan it out and make a huge profit. Gee. I wish I could print money out using a bad check and then make a bunch of interest on it. Great scheme.
That's why we would raise interest rates. So everyone borrows it at higher interest and so that others are more willing to buy our bonds.
Of course you're for all this. You're the chairman. You are Ponzi himself.
Shhhh don't give away my secret identity!
Here's a good one. youtu.be/mII9NZ8MMVM
Not in the mood of watching lol...can you sum it up for me?
In recent times China is not buying US Treasuries at the same rate, and have even sold US Treasuries at times.
Educate yourself and start preparing.