Debt Limit Thread

Kyle

Beloved Misanthrope
PREMO Member
Well according to the Dems, if we don't, the USA as we know it will cease to exist.
Yeah.

Everything Democrat's don't' like will cause the nation to collapse or the world to end.

Gasoline, Gluten, Whole Milk, Cigarettes, Guns, Manners, Civilized behavior, real women.... It's all apocalyptic.
 

stgislander

Well-Known Member
PREMO Member
Yeah.

Everything Democrat's don't' like will cause the nation to collapse or the world to end.

Gasoline, Gluten, Whole Milk, Cigarettes, Guns, Manners, Civilized behavior, real women.... It's all apocalyptic.
I'd like to think there are negotiations going on somewhere in a back room, but I've lost faith in government.
 
A - B = C

You've set A, or it at least specified how it will get determined without further control from you.

You've set B, or it at least specified how it will get determined without further control from you.

Therefore, you don't get to set C (or, if you prefer, you don't get to set D where C = D minus an already set E).

The debt limit stands for the proposition that you somehow get to set A, B, and C independently.

I think some people in Congress need to take a remedial math class. If you want C to be different you either need to change A or B (or both) or you need to make at least one of them a true variable (i.e. without rules specifying how they'll be determined).


The debt limit is little more than a political dog and pony show prop which either side can use to score political points against the other side. The problem is it has a nuclear warhead attached that can activate if either side doesn't terminate use of this particular prop by the scheduled stop use time.
 

SamSpade

Well-Known Member
PREMO Member
Has any Democrat ever made it their known opinion that they’re for cutting spending (on anything but defense) or for keeping spending down?

Twice in my lifetime two Democrat Presidents have bragged they decreased the deficit or lowered spending but it has each time been RIGHT AFTER colossal emergency spending - Obama after the HUGE spike in spending and it was years before the spending levels approached “normal”. Ditto Biden whose spending levels are atrocious but less than the emergency spending due to COVID.

But basically - they hate to tell the nation they intend to spend responsibly. Just that their evil opponents want to cut their outrageous spending.
 
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Hijinx

Well-Known Member
Has any Democrat ever made it their known opinion that they’re for cutting spending (on anything but defense) or for keeping spending down?

Twice in my lifetime two Democrat Presidents have bragged they decreased the deficit or lowered spending but it has each time been RIGHT AFTER colossal emergency spending - Obama after the HUGE spike in spending and it was years before the spending levels approached “normal”. Ditto Biden whose spending levels are atrocious but less than the emergency spending due to COVID.

But basically - they hate to tell the nation they intend to spend responsibly. Just that their evil opponents want to cut their outrageous spending.

They have to stop printing Confederate money. Money with no worth. And they have to lower spending.
This cannot go on and keep the US sustainable.

All of our credit cards are overdrawn and soon no one will accept our credit.
 

HemiHauler

Well-Known Member
Under MMT (Modern Monetary Theory), debt doesn’t matter.

Money doesn’t have value to government. It can’t, since government are the sole issuer of our currency. The federal government doesn’t need to collect our federal income tax $$ in order to spend it.

Our currency has value solely because of the government’s ability to tax in that currency. Ergo, tax policy is always a reflection of the amount of money that needs to be removed/added from/to the economy, money supply if you will. Maybe the M2 measure if that is still a thing. This is supposed to be a reflection of what the voting public wants. LOL - effing L.

Anyway, that is the sole purpose of income tax at the federal level. All this talk about what “our tax money” is spent on in terms of (ostensibly) society’s will, is just distraction.
 

SamSpade

Well-Known Member
PREMO Member
Under MMT (Modern Monetary Theory), debt doesn’t matter.

Money doesn’t have value to government. It can’t, since government are the sole issuer of our currency. The federal government doesn’t need to collect our federal income tax $$ in order to spend it.

I'm reminded of Samuel Johnson reacting to Bishop Berkeley's theory of immaterialism by kicking a rock and saying "I refute him THUS!". All philosophical arguments aside (because the details are intricate), the point made is, maybe you're right, but it doesn't actually seem to WORK that way.

Otherwise, the simplest solution to something like reparations would be to simply print out trillions of dollars and pay every family and make them all millionaires - or to fix all mortgage and student debt by printing enormous amounts of money to accommodate them.

I may not be an economic scholar but I know from history that nations that continually printed money ended up impoverishing themselves.
 

HemiHauler

Well-Known Member
I'm reminded of Samuel Johnson reacting to Bishop Berkeley's theory of immaterialism by kicking a rock and saying "I refute him THUS!". All philosophical arguments aside (because the details are intricate), the point made is, maybe you're right, but it doesn't actually seem to WORK that way.

Otherwise, the simplest solution to something like reparations would be to simply print out trillions of dollars and pay every family and make them all millionaires - or to fix all mortgage and student debt by printing enormous amounts of money to accommodate them.

I may not be an economic scholar but I know from history that nations that continually printed money ended up impoverishing themselves.

Sure, but it's (a) a matter of scale insofar as the reparations; and (b) there is a still an ostensible "tie" between the taxes we pay at the federal level and how they are used, and by and large, taxpayers don't really support reparations. So Congress needs the support of the voting public if we're going to pull that much money out of circulation, i.e., make a huge transfer payment. As for student loans and mortgages: in the case of student loans, that money was created the day the loan was made. It doesn't take more fiat to clean that up. Government is also in the mortgage business to some extent, so I'm not sure these are pure examples here.

To expand the point, despite protestations to the contrary, we live in a highly centrally-planned and managed economy. Our central bank's job, as outlined in its dual mandate, is -- to boil out the nuance in the language -- price stability (aka inflation) and maximum employment (also related to inflation). That's it - those are the two levers with which our form of capitalism can be managed -- carefully managed.

But as soon as there is an economic researcher out there who shows how reparations, for example, can mathematically work, we're off to the races. Gets a bit out of this discussion, but look into "Negative Interest Rates" by central banks. It started out as research idea as a tool to further the reach of monetary policy, and it is now policy for at least one or two central banks -- island nation of Cyprus, for one.
 

HemiHauler

Well-Known Member
I'm reminded of Samuel Johnson reacting to Bishop Berkeley's theory of immaterialism by kicking a rock and saying "I refute him THUS!". All philosophical arguments aside (because the details are intricate), the point made is, maybe you're right, but it doesn't actually seem to WORK that way.

Otherwise, the simplest solution to something like reparations would be to simply print out trillions of dollars and pay every family and make them all millionaires - or to fix all mortgage and student debt by printing enormous amounts of money to accommodate them.

I may not be an economic scholar but I know from history that nations that continually printed money ended up impoverishing themselves.

Further, looks at the “features” of Modern Monetary Theory: https://en.wikipedia.org/wiki/Modern_Monetary_Theory?wprov=sfti1

It’s all laid out right there.
 

SamSpade

Well-Known Member
PREMO Member
Further, looks at the “features” of Modern Monetary Theory: https://en.wikipedia.org/wiki/Modern_Monetary_Theory?wprov=sfti1

It’s all laid out right there.
I'll get around to it.

But on the surface of it, it sounds like we could make everyone in the nation outrageously rich simply by printing millions of dollars for everyone, and I know that practically, it's not possible. You can't make a nation full of rich people by putting more currency into supply.


It's one thing to theoretically postulate that currency is largely a nuance of government policy - in small doses it absolutely is.
From what I can grasp, increasing the money supply devaluates the dollar, but it devaluates it EVERYWHERE - every bank, every bit of savings, every debt owed, every dollar held or owed abroad and devaluating another 1 or 2% of every dollar everywhere on the planet doesn't "hurt" much. What movie was that, where they shaved off a fraction of a penny off every transaction, to eke out a fortune?

I also "get" that in an economy with a small but predictable inflation, deficit spending is good management, because you pay off today's debt with tomorrow's lesser valued dollars.

But we have never had a Congress that values responsible and intelligent money management. As a friend once cautioned me about sharing a checking account with a spendthrift - it's not about being responsible, it's about spending it FIRST.
 

stgislander

Well-Known Member
PREMO Member
I'll get around to it.

But on the surface of it, it sounds like we could make everyone in the nation outrageously rich simply by printing millions of dollars for everyone, and I know that practically, it's not possible. You can't make a nation full of rich people by putting more currency into supply.


It's one thing to theoretically postulate that currency is largely a nuance of government policy - in small doses it absolutely is.
From what I can grasp, increasing the money supply devaluates the dollar, but it devaluates it EVERYWHERE - every bank, every bit of savings, every debt owed, every dollar held or owed abroad and devaluating another 1 or 2% of every dollar everywhere on the planet doesn't "hurt" much. What movie was that, where they shaved off a fraction of a penny off every transaction, to eke out a fortune?

I also "get" that in an economy with a small but predictable inflation, deficit spending is good management, because you pay off today's debt with tomorrow's lesser valued dollars.

But we have never had a Congress that values responsible and intelligent money management. As a friend once cautioned me about sharing a checking account with a spendthrift - it's not about being responsible, it's about spending it FIRST.
Office Space?
 

HemiHauler

Well-Known Member
I'll get around to it.

But on the surface of it, it sounds like we could make everyone in the nation outrageously rich simply by printing millions of dollars for everyone, and I know that practically, it's not possible. You can't make a nation full of rich people by putting more currency into supply.


It's one thing to theoretically postulate that currency is largely a nuance of government policy - in small doses it absolutely is.
From what I can grasp, increasing the money supply devaluates the dollar, but it devaluates it EVERYWHERE - every bank, every bit of savings, every debt owed, every dollar held or owed abroad and devaluating another 1 or 2% of every dollar everywhere on the planet doesn't "hurt" much. What movie was that, where they shaved off a fraction of a penny off every transaction, to eke out a fortune?

I also "get" that in an economy with a small but predictable inflation, deficit spending is good management, because you pay off today's debt with tomorrow's lesser valued dollars.

But we have never had a Congress that values responsible and intelligent money management. As a friend once cautioned me about sharing a checking account with a spendthrift - it's not about being responsible, it's about spending it FIRST.

I mean … I’m not saying any of this is desirable or a good idea, but understanding our economic reality is a required starting point.

What you describe are the challenges of a centrally planned economy.

Even Alan Greenspan recognized this back in the 50s when he and Ayn Rand were drinking partners. He wrote in her publication _The Objectivist_ about the fact that the gold standard by definition prevents deficit spending. And you see where he ended up, career-wise.

Obviously there are fairly extreme outcomes of this method of economic planning, but many will suggest that this is the reason for the huge middle class in the US, for better or worse.
 

SamSpade

Well-Known Member
PREMO Member
Obviously there are fairly extreme outcomes of this method of economic planning, but many will suggest that this is the reason for the huge middle class in the US, for better or worse.
As a side note, question - do you see a huge middle class as a desirable trait?

I ask, because the moment I read this, I went over charts of nations with good GINI coefficients, large population of middle class, large defined middle class, and overall wealth of middle class - and then of course, the size and GROWTH of our own middle class.

While I saw much that said what I intuitively believed - a large middle class is a good thing - I didn't find it all that helpful as a measure of anything useful, except knowing it has a large one means, a nation doesn't have massive poverty and is mostly overseen by an extremely wealthy ruling class. For example, using the GINI index to me says nothing, because while it tells me which nations are poor, a low GINI can just mean that everyone is EQUALLY poor, such as Belarus, which is possibly the poorest nation in Europe.

What I did find a bit disturbing is - our own middle class is shrinking - a bit. And the only way for that to happen is for there to be migration from the middle class to BOTH upper and lower classes. It's not huge, but it was surprising.
 

HemiHauler

Well-Known Member
As a side note, question - do you see a huge middle class as a desirable trait?

I suppose like almost anything, it’s a matter of scale. Given that our economy is built on consumption, a large middle class is necessary to keep the engine going. Maybe a word better than “large” would be “robust” after some thought.

If you understand that federal income tax policy is a reflection of how the government wants to control the economy, it makes sense that governments want a large (in number) middle class which can be taxed to help achieve fiscal goals.

I don’t follow the GINI index. Will look at it more in-depth.
 

vraiblonde

Board Mommy
PREMO Member
Patron
The federal government is like that woman with a fancy manicure, a new cellphone, and a heroin addiction whining that she can't afford to feed and shelter her children.
 
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