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US debt jumps a record $328 Billion

Deuce said:
5 months of accounting tricks doesn't make 5 months of bills disappear.
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Not paying bills for two weeks doesn't create more debt.
 
apdst said:
Not paying bills for two weeks doesn't create more debt.
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It was 5 months, really. But you're oversimplifying things. Apparently you don't understand what these "extraordinary measures" actually entailed.
 
fmw said:
So it is like magic, huh? There is no limit to what the government can borrow and spend? Why not borrow enough to give every American $1 million? What you know, I'm afraid is nonsense.
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The money in your bank account and in your wallet, is federal debt. In the first stages of the flow of money, the government sells its treasury bonds to The Fed for cash. This cash is spent through government programs and government spending. Which means that government spending is an opening nozzle of the overall money supply. But it also means that the money in the economy started as government spending, and that the money circulating through the economy is the money eventually owed on those bonds sold to The Fed. Therefore, the money supply is debt to the central bank. Therefore if we were to pay our entire national deficit there would be no money. The money supply has to expand at a certain rate. If the supply of money itself becomes too low, at some point prices are going to have to increase (inflation). When you learn more about the economy, you will learn that there are risks of inflation everywhere. The only thing that I can think of that actually drops prices is the drop of demand. Obviously, if there is too much inflation (hyperinflation) the confidence of the currency will be completely lost; it will collapse.

What constricts this rate of inflation (there is always inflation) are interest rates. That is why I think it is so dangerous to be buying mass treasury bonds at such a low interest rate. If I am correct on this, I think at some point the interest rate on these bonds was 0% (or close to it)! That means that commercial banks, when they lend money, will have crazy low interest rates. And this basically means there is less suckage of money into the banking sector with smaller interest rates. More money remains in the economy so the tendency is for prices to increase.

Printing everyone 1 million dollars and then increasing interest rates is undoable for different reasons. It would initially work, but then everyone wouldn't work the jobs required to have the life that we live. If people lose the incentive to work and there is no production, that is a collapsed economy.
 
sookster said:
The money in your bank account and in your wallet, is federal debt. In the first stages of the flow of money, the government sells its treasury bonds to The Fed for cash. This cash is spent through government programs and government spending. Which means that government spending is an opening nozzle of the overall money supply. But it also means that the money in the economy started as government spending, and that the money circulating through the economy is the money eventually owed on those bonds sold to The Fed. Therefore, the money supply is debt to the central bank. Therefore if we were to pay our entire national deficit there would be no money. The money supply has to expand at a certain rate. If the supply of money itself becomes too low, at some point prices are going to have to increase (inflation). When you learn more about the economy, you will learn that there are risks of inflation everywhere. The only thing that I can think of that actually drops prices is the drop of demand. Obviously, if there is too much inflation (hyperinflation) the confidence of the currency will be completely lost; it will collapse.

What constricts this rate of inflation (there is always inflation) are interest rates. That is why I think it is so dangerous to be buying mass treasury bonds at such a low interest rate. If I am correct on this, I think at some point the interest rate on these bonds was 0% (or close to it)! That means that commercial banks, when they lend money, will have crazy low interest rates. And this basically means there is less suckage of money into the banking sector with smaller interest rates. More money remains in the economy so the tendency is for prices to increase.

Printing everyone 1 million dollars and then increasing interest rates is undoable for different reasons. It would initially work, but then everyone wouldn't work the jobs required to have the life that we live. If people lose the incentive to work and there is no production, that is a collapsed economy.
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I think, perhaps, the main issue we have with the economy is that very few people have even the slightest understanding of how it works, and even those few cannot predict everything that happens.

Edit: For example, I have no idea...I read your post and it only confused me more.
 
The Mark said:
I think, perhaps, the main issue we have with the economy is that very few people have even the slightest understanding of how it works, and even those few cannot predict everything that happens.

Edit: For example, I have no idea...I read your post and it only confused me more.
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Sounds like an apt description of the situation.
 
ItAin'tFree said:
U.S. debt jumped a record $328 billion on Thursday, the first day the federal government was able to borrow money under the deal President Obama and Congress sealed this week.

The debt now equals $17.075 trillion, according to figures the Treasury Department posted online on Friday.


Read more: U.S. debt jumps a record $328 billion
Follow us: @washtimes on Twitter



LOL. This is what Obama and the Dems were holding out for. Nothing they did will make it any better either, only worse. But the people that are sick of this kind of nonsense are "Stupid", "Lunatics", "hostage takers" and a host of other silly terms designed to hide the problems the government is in. LOL.
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I always like this one to keep an eye on the National Debt. http://www.usdebtclock.org/

It might feel a little scary at first. But one rapidly understands that here hides a clear and present danger.
 
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sookster said:
Bah. The treasury can just print money. It doesn't borrow.
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Yes. This is how government money works. That method doesn't work good and hyperinflation happens too soon. Governments all over the world now use something similar to our Federal Reserve. By law the United States government cannot print it's own money. The Federal Reserve Act of 1913 requires us to borrow needed funds from the Federal Reserve. The Federal Reserve treats the government as an actual customer sitting down to apply for a loan. The Federal Reserve makes the determination of whether the U.S. government would be capable of paying back that loan or not. I'm sure there is more to it than what I know.

I just wanted to clarify that the U.S. Government can't just print money to pay it's bills. Ron Paul is an advocate of abolishing the federal reserve. Once that happens then our government can go back to printing it's own money but we haven't done that in exactly 100 years.

blah blah blah so on and so forth. If this post gets too long nobody will read it.

vasuderatorrent
 
vasuderatorrent said:
Yes. This is how government money works. That method doesn't work good and hyperinflation happens too soon. Governments all over the world now use something similar to our Federal Reserve. By law the United States government cannot print it's own money. The Federal Reserve Act of 1913 requires us to borrow needed funds from the Federal Reserve. The Federal Reserve treats the government as an actual customer sitting down to apply for a loan. The Federal Reserve makes the determination of whether the U.S. government would be capable of paying back that loan or not. I'm sure there is more to it than what I know.

I just wanted to clarify that the U.S. Government can't just print money to pay it's bills. Ron Paul is an advocate of abolishing the federal reserve. Once that happens then our government can go back to printing it's own money but we haven't done that in exactly 100 years.

blah blah blah so on and so forth. If this post gets too long nobody will read it.

vasuderatorrent
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Good post. What I am also trying to say is you can print money to pay your bills (the system is sustainable based on factors), but history has shown that it eventually leads to collapse. It isn't just the recent turn of events. Ancient China was credited for the first modern economy, meaning, fiat currency. They were so sophisticated it wasn't even funny. Knowing about chromium processes in metal work, to creating a computer that calculates the position of the stars relative to our own. And, they made a printing press. And, they printed their own money. They were grand. They have created the eighth wonder of the world. And we know that the empire collapsed internally. Something tells me with how things have been working recently as well as the lessons from ancient china, that it is just a matter of time.
 
Cruz and the baggers made their choice to be destructive and so now it shouldn't be hard to blame this on them. Along with the Dems, the mainstream GOP and big business will be onboard with that blaming.

For extremists, what goes around comes around!
 
Michael66 said:
Cruz and the baggers made their choice to be destructive and so now it shouldn't be hard to blame this on them. Along with the Dems, the mainstream GOP and big business will be onboard with that blaming.

For extremists, what goes around comes around!
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Debt issues far predate both Obama and whoever it is you're referring to.
 
Michael66 said:
Cruz and the baggers made their choice to be destructive and so now it shouldn't
be hard to blame this on them. Along with the Dems, the mainstream GOP and big business will be onboard with that blaming.

For extremists, what goes around comes around!
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Only low information partisan hacks blame the shut down on the Tea Party and/or blame the suppposed "damage" done by the shut down on the Tea Party.
 
The Mark said:
Debt issues far predate both Obama and whoever it is you're referring to.
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Yeah. It's been going on for thousands of years yet the earth still turns and the sun still rises.

vasuderatorrent
 
Fenton said:
Only low information partisan hacks blame the shut down on the Tea Party and/or blame the suppposed "damage" done by the shut down on the Tea Party.
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Let me guess, you're one of those people who thinks Obama personally determined every effect of the shutdown. :)
 
Fenton said:
Only low information partisan hacks blame the shut down on the Tea Party and/or blame the suppposed "damage" done by the shut down on the Tea Party.
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I'm not aware of any damage caused by the shutdown.

vasuderatorrent
 
Deuce said:
No, seriously, this is what happens when you have 15 days of payments to make in one day. Did you think all those bills that came up after we hit the debt limit just ****ing went away?
Click to expand...

Incorrect. This was to pay off the last 5 months of borrowing under the table, or did you not notice that the total reported debt didn't increase since May? Hell, AP reported that it was an estimated 415 billion that would need to be paid day 1, and it had absolutely nothing to do with the shutdown.
 
As I read through this thread, and the nonchalant attitude of those making excuses for the idiots in DC continuing to just argue to spend more and more on an ever increasing credit card I was struck on this film last night on Stossel. It's a couple of years old, (and that is another problem for another thread that we just keep traveling down the road not doing anything about this) but it puts this I think in understandable terms...Watch....

 
sookster said:
The money in your bank account and in your wallet, is federal debt. In the first stages of the flow of money, the government sells its treasury bonds to The Fed for cash. This cash is spent through government programs and government spending. Which means that government spending is an opening nozzle of the overall money supply. But it also means that the money in the economy started as government spending, and that the money circulating through the economy is the money eventually owed on those bonds sold to The Fed. Therefore, the money supply is debt to the central bank. Therefore if we were to pay our entire national deficit there would be no money. The money supply has to expand at a certain rate. If the supply of money itself becomes too low, at some point prices are going to have to increase (inflation). When you learn more about the economy, you will learn that there are risks of inflation everywhere. The only thing that I can think of that actually drops prices is the drop of demand. Obviously, if there is too much inflation (hyperinflation) the confidence of the currency will be completely lost; it will collapse.

What constricts this rate of inflation (there is always inflation) are interest rates. That is why I think it is so dangerous to be buying mass treasury bonds at such a low interest rate. If I am correct on this, I think at some point the interest rate on these bonds was 0% (or close to it)! That means that commercial banks, when they lend money, will have crazy low interest rates. And this basically means there is less suckage of money into the banking sector with smaller interest rates. More money remains in the economy so the tendency is for prices to increase.

Printing everyone 1 million dollars and then increasing interest rates is undoable for different reasons. It would initially work, but then everyone wouldn't work the jobs required to have the life that we live. If people lose the incentive to work and there is no production, that is a collapsed economy.
Click to expand...

What you write makes no sense to me. It is counterintuitive. It sounds like some crazy economic theory and I view most economic theories as opinion and nonsense. Sorry, I just don't buy it.
 
Samhain said:
Incorrect. This was to pay off the last 5 months of borrowing under the table, or did you not notice that the total reported debt didn't increase since May? Hell, AP reported that it was an estimated 415 billion that would need to be paid day 1, and it had absolutely nothing to do with the shutdown.
Click to expand...

Already addressed.
 
fmw said:
What you write makes no sense to me. It is counterintuitive. It sounds like some crazy economic theory and I view most economic theories as opinion and nonsense. Sorry, I just don't buy it.
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Sorry. Basically think of the money supply continually expanding because it has to. Interest rates slows the expansion rate of the money supply, that is it. So no matter what you do, there is inflation. You just have to keep the inflation in check so the system doesn't completely collapse.
 
sookster said:
Sorry. Basically think of the money supply continually expanding because it has to. Interest rates slows the expansion rate of the money supply, that is it. So no matter what you do, there is inflation. You just have to keep the inflation in check so the system doesn't completely collapse.
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Didn't they try that already in Weimar?
 
Here is a cool website.

History of Deficits and Surpluses In The United States

It looks like our country does best with a Democrat in the White House, Republican control of the Senate and Republican control of the House. Republican presidents like to fight conflicts which is very expensive. Republican presidents are also more likely to cave to congress which can be very expensive especially if it's R-R-R. Democratic presidents like to give away goodies but they can't do it if the Congress and Senate are Republican.

The D-R-R combo is very rare in our recent history. We could probably see a surplus by the end of FY-2017 (September 30, 2018) if Republicans take the Senate in the 2014 election.

vasuderatorrent
 
Deuce said:
No, seriously, this is what happens when you have 15 days of payments to make in one day. Did you think all those bills that came up after we hit the debt limit just ****ing went away?
Click to expand...

THats not what happened. The Treasury was paying bills during the entire shutdown, 200 billion worth. Agencies were actually prevented from making new spending bills because of the lapse in funding. If the ww2 memorial is shut down, theres no payment for landscaping to be made. Which doesnt mean they didnt save their spending for the moment they got funding.
 
vasuderatorrent said:
Here is a cool website.

History of Deficits and Surpluses In The United States

It looks like our country does best with a Democrat in the White House, Republican control of the Senate and Republican control of the House. Republican presidents like to fight conflicts which is very expensive. Republican presidents are also more likely to cave to congress which can be very expensive especially if it's R-R-R. Democratic presidents like to give away goodies but they can't do it if the Congress and Senate are Republican.

The D-R-R combo is very rare in our recent history. We could probably see a surplus by the end of FY-2017 (September 30, 2018) if Republicans take the Senate in the 2014 election.

vasuderatorrent
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We almost had a balanced budget in 2007 with a Republican President, and Democrat House/Split Senate.. The deficit had dropped to 160bn and was likely to balance in fy2008, had the recession not hit.
 
jonny5 said:
THats not what happened. The Treasury was paying bills during the entire shutdown, 200 billion worth. Agencies were actually prevented from making new spending bills because of the lapse in funding. If the ww2 memorial is shut down, theres no payment for landscaping to be made. Which doesnt mean they didnt save their spending for the moment they got funding.
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The treasury was paying its bills by borrowing from funds already allocated for other future projects, and deferring payments where able. They'd been doing so for five months.

Now they have to replenish those borrowed funds because those other projects are still happening.
 
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