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Rubio's plan to "pay off" our "horrible" "debt."

David_N

David_N

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I have just found Rubio's web page where he talks about the debt. Let's have fun reading this disaster together. :cool:
https://marcorubio.com/issues/debt/
After it was suspended for more than a year, the debt ceiling went back into effect on Sunday, leaving leaders in Washington scrambling to ensure America can meet her most basic financial obligations.
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First of all, Rubio, leaders in washington don't have to "scramble" to meet any obligations, not operationally.
This means that Congress will soon be asked once again to raise the debt limit, and President Obama and congressional Democrats will once again resist Republican efforts to reduce spending.
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Rubio and other republicans actually believe we can get by without raising the debt limit.. Rubio and other republicans want to "reduce spending" while reducing tax revenue, they don't care about "paying off the debt" and why should they? The debt is hardly even a "debt."
They will send the American people the same message they have sent for the past six years: that our rate of debt accrual is harmless and necessary.
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Obama has been reducing deficits. A mistake on his part, but goes against Rubio's talking point.
And our $18.1 trillion debt is not just a problem for government; it is a problem for the American people. It will encumber our economy today and shackle future generations tomorrow.
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Yeah, the debt from world war 2 is going to shackle us any day now. Take notes, Rubio, the debt is not a problem. We're a fiat regime and we can create dollars from nothing. We're nowhere near full output either.
Our $18 trillion debt amounts to almost $150,000 per household. Our families and our children are on the hook for this.
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This tells you all you need to know about the economic knowledge Rubio has. None.
Perhaps most frightening of all, it will cost us in safety and national security. As former secretary of defense Robert Gates said: “At some point, financial insolvency at home will turn into strategic insolvency abroad.” And as former chairman of the Joint Chiefs of Staff Mike Mullen warned: “The single biggest threat to our national security is our debt.”
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Why doesn't rubio get the opinion of actual economists?

First, we need to reduce spending.
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Yeah, you want a balanced budget amendment to do it. Tell me Rubio, why do you hate the private sector? You socialist.
If left unreformed, these programs will be bankrupt by the time my generation retires, and they will bankrupt our nation in the process.
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Not operationally. In fact, these programs can't go "bankrupt" at all.
Everyone, this will give you a good laugh:
To reduce spending, we’ll also need a balanced-budget amendment to compel Washington to live within its means, as well as smaller-scale solutions such as the REFUND Act, a bill I am reintroducing today that will give states the ability to return unused federal funds for the specific purpose of paying down the debt.
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What does Rubio actually think the debt is? He has absolutely no idea what he's talking about.
The second solution to our national debt is vibrant economic growth. A growing economy will create more jobs, more taxpayers, and more prosperity. It is the only way to get the tax revenue we need to begin chipping away at the $18.1 trillion we owe.
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Oh, so he believes he can collect tax revenue years after balancing the budget every year, not adding dollars to the economy. Rubio believes we don't need deficit spending at a time when more and more money is getting trapped at the top not being spent. In fact, rubio wants to lower taxes on the rich, for some strange reason. His donors, hint hint..
have proposed a number of reforms to create growth. The most recent is a comprehensive tax-reform plan in partnership with Senator Mike Lee. The Tax Foundation found that our plan, over the next decade, would increase GDP by 15 percent, boost wages by 12.5 percent, and create almost 2.7 million full-time jobs. One expert wrote that it would do “more to encourage growth than any [tax code] the U.S. has had since the 1920s.”
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Absolute lunacy. There's no way this will happen if Rubio "balances the budget" and guts deficit spending.


Another gem from rubio:
our debt will halt private-sector investment
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I now know that Rubio knows nothing about deficits and the reality that deficits benefit the private sector.
 
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Honestly, this is all the same **** on a different day. The politics of selling these ideas are continually trying to remove economics from the debate. It is nothing more than capitalizing on buzzwords in an effort to gain support, what makes it sad is we have a healthy percentage of the nation that buys into the rhetoric. It all sounds plausible until you look under the hood and realize the economics and even prior political positions that got us to today's numbers.
 
OrphanSlug said:
Honestly, this is all the same **** on a different day. The politics of selling these ideas are continually trying to remove economics from the debate. It is nothing more than capitalizing on buzzwords in an effort to gain support, what makes it sad is we have a healthy percentage of the nation that buys into the rhetoric. It all sounds plausible until you look under the hood and realize the economics and even prior political positions that got us to today's numbers.
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The debt is a nice political tool, but for people who understand the necessity of deficits and government bonds.. it's a different story.
 
Easy way to get rid of the debt.. print print print Dollars and make inflation go nuts! Granted that has some other consequences... but hey!
 
PeteEU said:
Easy way to get rid of the debt.. print print print Dollars and make inflation go nuts! Granted that has some other consequences... but hey!
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Who is suggesting that?
 
PeteEU said:
Easy way to get rid of the debt.. print print print Dollars and make inflation go nuts! Granted that has some other consequences... but hey!
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We can all be as rich as Zimbabweans!!!
 
cpwill said:
We can all be as rich as Zimbabweans!!!
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When people talk about Zimbabwe, they really have no idea what they're talking about:
Imagine your agricultural sector is completely destroyed, your infrastructure destroyed, high tariffs.. A clueless government that never even tried to reduce unemployment.
 
PeteEU said:
Naw that is out of control inflation.. I am talking 5-10 maybe 15% inflation over a short period :)
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The U.S. National debt is $19 Trillion. M1 supply is $3 Trillion. In no plausible universe do we create $19 Trillion worth of M1 supply over a handful of years, and then see only 5-10% inflation.

Regardless, I am not willing to accept that result. We need to reform the entitlements, not destroy our currency.
 
cpwill said:
The U.S. National debt is $19 Trillion. M1 supply is $3 Trillion. In no plausible universe do we create $19 Trillion worth of M1 supply over a handful of years, and then see only 5-10% inflation.
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Dont need to create 16 trillion in dollars. All you need to create is the 5-10% inflation and that 19 trillion will slowly disappear.. well on paper.

Regardless, I am not willing to accept that result. We need to reform the entitlements, not destroy our currency.
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So basically throw old people on the street, and kill off the poor population? How about stopping all the money going to corporations in subsidies? Or military spending? You gonna touch that too?
 
cpwill said:
The U.S. National debt is $19 Trillion. M1 supply is $3 Trillion. In no plausible universe do we create $19 Trillion worth of M1 supply over a handful of years, and then see only 5-10% inflation.

Regardless, I am not willing to accept that result. We need to reform the entitlements, not destroy our currency.
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The debt isn't a problem. We don't need to "reform" entitlements. Austerity isn't a solution, just ask everyone who has tried it.
 
PeteEU said:
Dont need to create 16 trillion in dollars. All you need to create is the 5-10% inflation and that 19 trillion will slowly disappear.. well on paper.
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So now you switch from "a short period" to "slowly". Still, the answer is no.

1. Our deficit spending is going to dramatically increase in the next few years, under our current budgetary structure. Our old-age programs (Medicare especially, but also Social Security) are set to explode in cost. So even if we try to print our way out slowly, the debt will continue to rise faster than we print.
2. The third item that is going to explode in cost over the next few years is the cost of debt-servicing. That's assuming that we maintain low interest rates. If we deliberately raise our inflation rates, our interest rates will rise in kind, meaning that we are chasing our own tail.
2. Because the US Dollar has been the international currency for so long, large portions of our M1 supply are stored overseas. Deliberately choosing (and then pursuing) an inflation strategy means that overseas holders of dollars will dump them, causing them all to come home at the same time, spiking inflation even higher.

In short, we not only wouldn't pay down the debt, the debt would rise. All we would get would be a destroyed currency, destroyed savings, wrecked retirements for our elderly, and a sky-high misery index. No thanks.

So basically throw old people on the street, and kill off the poor population? How about stopping all the money going to corporations in subsidies? Or military spending? You gonna touch that too?
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Oh hey, look! Demagogic Strawmen with no connection to reality!

We need a complete structural overhaul of our social welfare state. DOD spending provides a global security guarantee (that has sharply degraded in the last handful of years), upon which our economy depends. The world collapsing into regionalism means the US economy collapses with it. Like trying to print our way out of paying off our debt, you lose more than you gain by deep cuts to operational capability, though I have consistently argued that we need to reform our pension and retiree healthcare system to a 21st Century model, which would reduce expenditures (and which we are starting to do).

Every person retiring today is (on average) currently scheduled to outlive their benefits. Let that sink in for a minute.

The only way to avoid having to make Greece-Like decisions, where we simply pick which seniors we are going to tell Too-Bad-So-Sad to is to reform these programs now to make them sustainable.
 
cpwill said:
So now you switch from "a short period" to "slowly". Still, the answer is no.

1. Our deficit spending is going to dramatically increase in the next few years, under our current budgetary structure. Our old-age programs (Medicare especially, but also Social Security) are set to explode in cost.
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And what would you do about it? Let me guess.. privatize it? Well, why is Medicare going up? More old people sure, but mostly because it is very closely linked to the private healthcare system in the US, which is totally out of control cost wise.

2. The third item that is going to explode in cost over the next few years is the cost of debt-servicing. That's assuming that we maintain low interest rates. If we deliberately raise our inflation rates, our interest rates will rise in kind, meaning that we are chasing our own tail.
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Not really.

2. Because the US Dollar has been the international currency for so long, large portions of our M1 supply are stored overseas. Deliberately choosing (and then pursuing) an inflation strategy means that overseas holders of dollars will dump them, causing them all to come home at the same time, spiking inflation even higher.
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Never said it was perfect. Yea your trading partners would get pissed that is for sure..

In short, we not only wouldn't pay down the debt, the debt would rise. All we would get would be a destroyed currency, destroyed savings, wrecked retirements for our elderly, and a sky-high misery index. No thanks.
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But you already want to wreck retirements and savings so why not go this way? At least the non retired will get something out of it!
 
PeteEU said:
And what would you do about it? Let me guess.. privatize it?
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In part. Slowly, over time, while maintaining the guaranteed benefit and flattening the benefit in order to give more to our poor and less to our wealthy. I have run the numbers rather ad nauseum.

For Medicare, I like Paul Ryan's plan, and would merge it with my proposal here in order to drive costs down over time, while maintaining access and increasing qualitative provision of care.

Well, why is Medicare going up? More old people sure, but mostly because it is very closely linked to the private healthcare system in the US, which is totally out of control cost wise.
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Actually no. Medicare is government-managed healthcare. Nor do we have a private healthcare system (in general) in the United States. We have one with socialized costs, but individual benefits, which is a major driver of the cost-increases.

The third item that is going to explode in cost over the next few years is the cost of debt-servicing
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Not really.
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Yeah, really. Especially under the "let's just knock interest rates back up to 5-10%" plan.

Never said it was perfect. Yea your trading partners would get pissed that is for sure.
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It's not perfect. It's disastrous.

But you already want to wreck retirements and savings so why not go this way? At least the non retired will get something out of it!
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:roll: Inflation wrecks retirements and savings, and is your prescription here, not mine.
 
cpwill said:
The U.S. National debt is $19 Trillion. M1 supply is $3 Trillion. In no plausible universe do we create $19 Trillion worth of M1 supply over a handful of years, and then see only 5-10% inflation.
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This is something I often wonder about. Would it really lead to inflation?

Bondholders hold bonds because they are a safe place to park dollars. They weren't going to spend or invest those dollars, or they would have done so already; that tiny bit of interest isn't stopping anybody from doing anything with their money. So if your remove bonds and replace them with dollars, why does anybody think those dollars would go looking for some other investment? Why wouldn't they just sit there - the safest option after bonds?
 
cpwill said:
For Medicare, I like Paul Ryan's plan, and would merge it with my proposal here in order to drive costs down over time, while maintaining access and increasing qualitative provision of care.
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Only way to drive down costs is to regulate the market so that the private sector does not exploit the market for too much profit. This happens when there is actual competition. Hence no barriers for insurance companies, and links between the insurance companies and the healthcare providers. Right now, most Americans cant choose what hospital they want to go to.. because their insurance company has a "deal" with specific hospitals and a deal on what to charge (often far more than needed).

Actually no. Medicare is government-managed healthcare.
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yes but costs on drugs, doctors and so on are all driven by the private healthcare system which is out of control.

Nor do we have a private healthcare system (in general) in the United States. We have one with socialized costs, but individual benefits, which is a major driver of the cost-increases.
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Horse****. Your whole system is built up around private for profit system... a system that is totally unregulated and allowed to create monopolies and worse in geographic areas that drive up prices even more. On top of that the insurance industry is in cahoots with the medical industry and the one getting screwed is the consumer.

:roll: Inflation wrecks retirements and savings, and is your prescription here, not mine.
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Of course it does, but it also kills debt.. which is what this discussion is about :)
 
JohnfrmClevelan said:
This is something I often wonder about. Would it really lead to inflation?

Bondholders hold bonds because they are a safe place to park dollars. They weren't going to spend or invest those dollars, or they would have done so already; that tiny bit of interest isn't stopping anybody from doing anything with their money. So if your remove bonds and replace them with dollars, why does anybody think those dollars would go looking for some other investment? Why wouldn't they just sit there - the safest option after bonds?
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1. Bonds are an investment.
2. The bonds are replaced with dollars over time anyway. What is happening under this idea is that we are simply dramatically increasing the M1 supply, while continuing to issue more bonds.
3. In an inflationary environment, holding on to cash is taking a deliberate loss.


You can't sectuple the monetary supply in a handful of years without inflation, any more than we could cut the monetary supply to 1/6th of it's current amount without deflation.
 
cpwill said:
1. Bonds are an investment.
2. The bonds are replaced with dollars over time anyway. What is happening under this idea is that we are simply dramatically increasing the M1 supply, while continuing to issue more bonds.
3. In an inflationary environment, holding on to cash is taking a deliberate loss.


You can't sectuple the monetary supply in a handful of years without inflation, any more than we could cut the monetary supply to 1/6th of it's current amount without deflation.
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2.) And that's bad because...?
3.) Yeah, in your environment.
 
cpwill said:
You can't sectuple the monetary supply in a handful of years without inflation, any more than we could cut the monetary supply to 1/6th of it's current amount without deflation.
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You can increase the money supply by 66% in 8 years and only get 12% inflation! There is no linear relationship between the money supply and the price level; you must also consider output and velocity.
 
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