To all those 'Federal deficits are no problem' Krugmanites/Keynesians:

This is from Janet Yellen - Head of the Federal Reserve - said today.

And remember, she knows a heck of a lot more about this stuff than any Keynesian/Krugmanite on this board.

'She said lawmakers need to work toward achieving "sustainability of this debt path over time," ...

"Let me state in the strongest possible terms that I agree" the U.S. federal debt trend is unsustainable, may hurt productivity, and living standards of Americans.'

Fed Chair Janet Yellen Warns Congress: US Debt Trajectory Is Unsustainable | Zero Hedge

Can you read that?

Stick that in your pipes you mega debt/'no debt is too big' ignoramuses and smoke it.

Only an economic moron of epic proportions actually is SOOOO ignorant to believe that federal debt is no problem...no matter how big it is ('duh...just print more money').


Have a nice day

Tweet your Hero, he knows more than The Generals :2razz:

DA60 said:

This is from Janet Yellen - Head of the Federal Reserve - said today.

And remember, she knows a heck of a lot more about this stuff than any Keynesian/Krugmanite on this board.

'She said lawmakers need to work toward achieving "sustainability of this debt path over time," ...

"Let me state in the strongest possible terms that I agree" the U.S. federal debt trend is unsustainable, may hurt productivity, and living standards of Americans.'

Fed Chair Janet Yellen Warns Congress: US Debt Trajectory Is Unsustainable | Zero Hedge

Can you read that?

Stick that in your pipes you mega debt/'no debt is too big' ignoramuses and smoke it.

Only an economic moron of epic proportions actually is SOOOO ignorant to believe that federal debt is no problem...no matter how big it is ('duh...just print more money').


Have a nice day

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The current debt is no problem it's a problem if we keep running deficits that are bigger than the economic growth.

Cigar said:

Tweet your Hero, he knows more than The Generals :2razz:

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DA is no fan of Trump

Crovax said:

The current debt is no problem it's a problem if we keep running deficits that are bigger than the economic growth.

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From a best practice

The government should run a surplus most years, and deficits during slow downs using said surplus and borrow no money for ongoing operations, except for capital projects

Lord Tammerlain said:

From a best practice

The government should run a surplus most years, and deficits during slow downs using said surplus and borrow no money for ongoing operations, except for capital projects

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The govt should never be running a surplus. All that is money that is being held out of the economy.

Crovax said:

The govt should never be running a surplus. All that is money that is being held out of the economy.

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Exactly!

It's not like your kid's piggy bank! :lamo

Lord Tammerlain said:

DA is no fan of Trump

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No. Maybe not. But he's right about the debt being dangerously high, should anything nasty happen.

Lord Tammerlain said:

DA is no fan of Trump

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How about Economics

Crovax said:

The govt should never be running a surplus. All that is money that is being held out of the economy.

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That money would in fact be available for loans as it would probably be invested in short term deposit instruments. If having money in savings is bad than all people and companies should be discouraged from saving money in banks

Cigar said:

How about Economics

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Very much so and one of the more knowledgeable ones on DP

DA60 said:

Can you read that?

Stick that in your pipes you mega debt/'no debt is too big' ignoramuses and smoke it.

Only an economic moron of epic proportions actually is SOOOO ignorant to believe that federal debt is no problem..

Click to expand...

I'm not sure where you think you saw a Keynesian or liberal say that federal debt is no problem. I've certainly never heard a liberal say such a thing. Simply that it's not a massive problem, we have bigger problems, and that relatively small changes can bring us back in line. Ultimately we can always pay off our debts, and it makes absolutely no sense to be slashing important programs that benefit our overall economy in the name of bringing down short term deficits.

GUNS OR BUTTER?

DA60 said:

Only an economic moron of epic proportions actually is SOOOO ignorant to believe that federal debt is no problem...no matter how big it is ('duh...just print more money')

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So, call me a moron. (But, you know that already - don't you! ;^)

You are making a MOUNTAIN out of a mole-hill. The history of the National Debt, if we go back far enough, looks like this:


Note that post-WW2, the US was able to reduce its debt. But, why. Because Demand picked up an growth rates of the American economy were almost "euphoric". Can that happen again?

Possibly, but it "depends". Upon what? The Information Age. Howzat?

Post-WW2 saw a huge increase in Demand as soldiers returned from war and started looking for jobs. That was "no small thing" because technical innovations that occurred as a result of WW2 were employed generally in the economy. They were many, but just look at air-transportation. The first airline flight of the Labor Force Statistics from the Current Population Survey:


Lonnnnnnnggggg before the arrival of Donald Dork in the White House, the economy has been repairing itself from the fact that the Replicants - when they took control of the HofR in the 2010 midterms - refused all further Stimulus Spending (of the kind Obama and a Dem Congress applied in 2009 to spike the unemployment rate at 10%).

The consequence was that Job Creation stagnated.

So, who is at fault if the American unemployed needed to wait another 4 lonnnggggg years (from 2010 to 2014) for the economy to start creating jobs again? The Replicant HofR, and thus the Replicant Party.

The uptick in the E-to-P ratio will repair the job-situation (as seen in the infographic above) - but two "issues" arise:
*The US must make an effort to change "the conditions". We are NOT GOING BACK to the Industrial Age when manufacturing created jobs. We are going forward into the Information Age, where a higher level of postsecondary qualifications are necessary for Services Sector jobs.
*45% of all secondary-school children today WILL NOT obtain a postsecondary educational degree. Why? Some because they have not been prepared properly for it. But for the most part it is due to the fact that such a degree is too effing expensive for most of them ..
*So? Without free Tertiary Education, the economy will need to look for "talented people" outside of the US. (Is that what we want? Because that has been happening already.)

My point: Any regain in the Employment-to-Population Ratio will assist in paying the National Debt - but only if we reduce drastically the appetite of DoD-spending. We are in a "Guns-or-butter?" situation. We cannot have both a voracious DoD-budget and subsidize the massive effort necessary to educate/train our children for the Information Age (which requires a Post-secondary Degree) ...

Lord Tammerlain said:

Very much so and one of the more knowledgeable ones on DP

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:lol:

DA60 said:

This is from Janet Yellen - Head of the Federal Reserve - said today.

And remember, she knows a heck of a lot more about this stuff than any Keynesian/Krugmanite on this board.

'She said lawmakers need to work toward achieving "sustainability of this debt path over time," ...

"Let me state in the strongest possible terms that I agree" the U.S. federal debt trend is unsustainable, may hurt productivity, and living standards of Americans.'

Fed Chair Janet Yellen Warns Congress: US Debt Trajectory Is Unsustainable | Zero Hedge

Can you read that?

Stick that in your pipes you mega debt/'no debt is too big' ignoramuses and smoke it.

Only an economic moron of epic proportions actually is SOOOO ignorant to believe that federal debt is no problem...no matter how big it is ('duh...just print more money').


Have a nice day

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I fully 100% agree. this path of debt we are on is not sustainable. it is a slow leaking damn that will bust and create major economic havoc for everyone involved.
we have to stop letting just billions of dollars roll out the door in waste.

Carson just did an audit of the HUD department. 500B dollars in book keeping errors.
500b dollars. our current deficit is only 440b.

WTH. We need a full government audit from top to bottom and the entire thing redone.
we probably lost over 1 trillion dollars in government waste.

RICHARD RAHN: U.S. government wastes $1 trillion a year - Washington Times

yet these guys want more of our money.

ludin said:

I fully 100% agree. this path of debt we are on is not sustainable. it is a slow leaking damn that will bust and create major economic havoc for everyone involved.

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Aint necessarily so. If the US were Zimbabwe, maybe. But it isn't.

The Chinese just LUV to buy T-notes and store their dollars in the US. Which means that, for as long as China does not dump the T-notes on the market (that is, sell them), the US need not worry about its "debt". It is in safe hands with the Chinese. Unless, of course, push comes to shove - but that would be kinda-sorta stoopid.

After all, the US is THE MAJOR EXPORT MARKET for China.

Should we be sustaining such a high-debt*. Is there a good reason for it?

There was when we entered the Great Recession and the debt expanded in order for Uncle Sam to support the unemployed. But, if unemployment is down below 5%, the Employment to Population Ratio is not back up to it last high of 63% before the Great Recession was triggered in 2008.

If a country wants to spend 54% of its Discretionary Budget on just the DoD, then there is not much else that makes sense as regards spending. If one looks at the part of the Discretionary Budget (here) that is NOT DoD, what expenditure is of any real consequence?

For most of us, just HealthCare.

The one that should be important is miniscule - that of the Education Budget. As I keep harping, the DoD budget should be cut in half and the money spent funding free Tertiary Education. Which the country needs desperately to assure future jobs.

Or companies will keep filling positions by means of short-term visas importing the talent we should be nurturing in our own country. Which visas have an amazing facility for becoming not only long-term but transformed into citizenship.

Is that a crime? Nope. But why should we be importing migrants to take the jobs that should go to educated Americans. Of which there aren't enough because we have made a post-secondary degree so damn expensive ... !

Lord Tammerlain said:

US Christian conservatives are the happiest in the US according to studies Do you see a connection?

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Perhaps because they are too simple to ask the right questions?

Why must there be freedom of religious conscience? Because there is no way on earth to prove there is a God.

It is purely religious belief without a shred of historical or scientific fact to support it ...

Americans do not seem to understand that those advanced-degree Visa's are going to people whose tertiary-education was funded by their governments!

It's a good wager for those governments. The people they send to work in the US typically remit to their families back-home large portions of their salaries.

Bingo! Jackpot!

MrWonka said:

I'm not sure where you think you saw a Keynesian or liberal say that federal debt is no problem. I've certainly never heard a liberal say such a thing. Simply that it's not a massive problem, we have bigger problems, and that relatively small changes can bring us back in line. Ultimately we can always pay off our debts, and it makes absolutely no sense to be slashing important programs that benefit our overall economy in the name of bringing down short term deficits.

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There are several on this very board who run around saying exactly that. They push the bogus MMT nonsense.

Lafayette said:

Aint necessarily so. If the US were Zimbabwe, maybe. But it isn't.

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We don't have to be Zimbabwe. All it takes is for people to think we can't collect enough taxes to pay our bills.

The Chinese just LUV to buy T-notes and store their dollars in the US. Which means that, for as long as China does not dump the T-notes on the market (that is, sell them), the US need not worry about its "debt". It is in safe hands with the Chinese. Unless, of course, push comes to shove - but that would be kinda-sorta stoopid.

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You really don't know how this works do you? They have dumped t-notes before. the thing is other people bought them and no harm no foul. what would hurt is if they demand and
cash in those t-notes now and WE have to buy them back. Us handing them a bunch of newly printed dollars won't cut it either.

After all, the US is THE MAJOR EXPORT MARKET for China.

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You say this as if it is relevant. When you money is worthless then it no longer matters. when you can no longer afford to pay your debt nothing matters.
people will no longer want to buy your t-notes or if they do they will want high interest rates.

Should we be sustaining such a high-debt*. Is there a good reason for it?

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Not really.

There was when we entered the Great Recession and the debt expanded in order for Uncle Sam to support the unemployed. But, if unemployment is down below 5%, the Employment to Population Ratio is not back up to it last high of 63% before the Great Recession was triggered in 2008.

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which by all rights did more harm than good. the long term unemployed is still and issue to this day from that mess. I get so sick of this. if you look at the reason it dropped so much one of the biggest factors was people participating in the
job market dropped. IE people stopped looking for work. that is not something good to base your unemployment on.

For most of us, just HealthCare.

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healthcare is available for anyone to purchase or get. stop trying to make others pay for you.

The one that should be important is miniscule - that of the Education Budget. As I keep harping, the DoD budget should be cut in half and the money spent funding free Tertiary Education. Which the country needs desperately to assure future jobs.

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college is available for anyone and everyone that wants to go.

Or companies will keep filling positions by means of short-term visas importing the talent we should be nurturing in our own country. Which visas have an amazing facility for becoming not only long-term but transformed into citizenship.
Is that a crime? Nope. But why should we be importing migrants to take the jobs that should go to educated Americans. Of which there aren't enough because we have made a post-secondary degree so damn expensive ... !

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umm it is cheaper to do that than to hire an American worker? these guys are contracted 99% of the time.
yes the government has bloated the college system which is why it costs so much.

higher demand = more costs. this is the basic formula for everything.
no matter how much money you throw at it the cost will continue to rise.

countryboy said:

There are several on this very board who run around saying exactly that. They push the bogus MMT nonsense.

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MMT does not suggest deficits are NO problem. It tells us exactly what I said. Deficits are not a massive problem, we have bigger problems, and that relatively small changes can bring us back in line. Ultimately we can pay off our debts, and it makes absolutely no sense to be slashing important programs that benefit our overall economy in the name of bringing down short term deficits.

The problem is your inability to grasp what MMT people are saying, not what they're saying. You choose to interpret their arguments in a ridiculous way that bares little resemblance to their actual points because you don't want to have to admit to their merits.

ludin said:

You really don't know how this works do you? They have dumped t-notes before. the thing is other people bought them and no harm no foul. what would hurt is if they demand and
cash in those t-notes now and WE have to buy them back. Us handing them a bunch of newly printed dollars won't cut it either.
.

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And what you know about International Finance would fit a thimble.

All countries are doing it - that is, increasing their expenditures thus indebting the nation, but selling that debt to creditor-nations. Such as the oil-rich countries or China.

And these creditor-nations are quite happy to "buy" the debt that they help create. Afterall, what should they do with all that money anyway? Until recently, they could not even spend it. Because, until recently, Saudia Arabia (for instance) had no trouble spending it and did so willy-nilly.

But, the wheel has turned. (It always does.) So, the Royal Family has decided on some very strict measures in budget-maintenance in order to maintain their own opulence. It'll work but when in 20/30 years the world finally gets unhooked from the combustion-engine, then the fit-will-hit-the-shan as regards oil-sales dependency of revenues for some Middle-east countries.

We shall then see what happens.

Till then, the rest of the world will still muddle through. Key to who is better off is the size of the market in which market-economies generate revenues - which means "the larger the overall market-volume the better off a nation remains". (And the opposite is also true.)

Which in turn means predominantly the US and the EU - and China not far behind ...

PS: I am not saying anything remarkably new in the above. Europe has known for a long time that it needed to "get together" in order to carve out a mutually beneficial economic destiny.

Lafayette said:

And what you know about International Finance would fit a thimble.

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yet you don't know how t-notes work.

All countries are doing it - that is, increasing their expenditures thus indebting the nation, but selling that debt to creditor-nations. Such as the oil-rich countries or China.

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just because everyone else jumps off the bridge doesn't make it a good idea. the government is supposed to be fiscally responsible. it isn't when it is racking up more debt than it can pay for.

And these creditor-nations are quite happy to "buy" the debt that they help create. Afterall, what should they do with all that money anyway. Until recently, they could not even spend it. Because, until recently, Saudia Arabia (for instance) had no trouble spending it and did so willy-nilly.

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a debtor is always slave to the creditor. it is not a good position to be in. you have no leverage when you are in debt so much. while the majority of the money is owed to the government itself it is still not fiscally responsible.If we are still around, that is ... and until

then I doubt seriously that we'll have any substantial changes in the way debt is managed. Because there is simply no alternative.

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That is because people don't want it to change. people want all their free stuff. the problem is that it isn't free.

Well one - someone could start a nuclear war and that'll put a quick damper on world-trade. You "up" for that?
Thought not ...

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typical nonsense that comes from you. we are talking about government debt not nuclear war.
this is why no one takes you seriously.

MrWonka said:

MMT does not suggest deficits are NO problem. It tells us exactly what I said. Deficits are not a massive problem, we have bigger problems, and that relatively small changes can bring us back in line. Ultimately we can pay off our debts, and it makes absolutely no sense to be slashing important programs that benefit our overall economy in the name of bringing down short term deficits.

The problem is your inability to grasp what MMT people are saying, not what they're saying. You choose to interpret their arguments in a ridiculous way that bares little resemblance to their actual points because you don't want to have to admit to their merits.

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Yeah no.

The key insight of MMT is that "monetarily sovereign government is the monopoly supplier of its currency and can issue currency of any denomination in physical or non-physical forms. As such the government has an unlimited capacity to pay for the things it wishes to purchase and to fulfill promised future payments, and has an unlimited ability to provide funds to the other sectors

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https://en.m.wikipedia.org/wiki/Modern_Monetary_Theory

MrWonka said:

MMT does not suggest deficits are NO problem. It tells us exactly what I said. Deficits are not a massive problem, we have bigger problems, and that relatively small changes can bring us back in line. Ultimately we can pay off our debts, and it makes absolutely no sense to be slashing important programs that benefit our overall economy in the name of bringing down short term deficits.

The problem is your inability to grasp what MMT people are saying, not what they're saying. You choose to interpret their arguments in a ridiculous way that bares little resemblance to their actual points because you don't want to have to admit to their merits.

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no we know what MMT'ers say and every economic model out there says it doesn't work.

sure the US government can issue as much currency as it wants to, but doing so has consequences.
this has been brought to light by other countries that attempted to do this.

they tanked their currency and their economy.

the dollar has value based on the US government ability to be responsible and act in good faith.
If MMT was true then there would be no need for taxes or debt at all.

we just print our 4 trillion + dollar budget every year. yet we don't do this.
no country does.

if mmt was true we could just print 16 trillion dollars to pay off the national debt and the outstanding money owed to the federal government
but we don't do this. no the question is why do MMT'ers never acknowledge this.

one of the main arguments against MMT is the fact that it in and of itself ignores currency devaluation and inflation as a risk.