[Steve_American]

No, I did not say we (the US Gov.) would go bankrupt. You changed my statement from "lose the status as the world's reserve currency" to "we (the US Gov.) will go bankrupt".

This because of the, as you call it, the magic money tree.
Banks also have had access to this magic money tree, and no MainStream economist cares a whit about that. They just care about the Gov. using it to help the people.

Why is that? IMHO, it's because the rich benefit from the banks they own getting free money to lend out, but if the Gov. uses the tree to help the people they think this hurts them (the rich) somehow. The rich also don't care if the Gov. uses the tree to pay for military spending, because the money goes to the corps owned by the rich. Because the rich don't care about that neither do economists or Repuds and corp Dems in Congress.

I thank you, QatzelOk, for "liking" this reply to your reply to me.

I assume it is mostly for the last part about how the rich own Congress and also most MainStream economists (and now also the media) so that if the rich benefit from banks getting free money from the money tree to make their loans and from the Gov. spending on the military; the economists, media, and Congress people don't care about those uses of the magic money tree.

[Steve_American]

Personally, I can't wait.

Can't wait for what, exactly?

[QatzelOk]

...the magic money tree...

The expression "magic money tree" has been deployed in this thread in order to capture the naive belief that the unlimited printing of money will have no negative consquences.

This has lead to major economic tragedies in so many other countries... that there is no need to really explain.

A population that believes in magic money trees... has been watching too much commercial propaganda. They probably think praying will pay off their credit cards, and that bombing Arabs will convince God to pay off all their debts to their God-connected creditors.

[Steve_American]

The expression "magic money tree" has been deployed in this thread in order to capture the naive belief that the unlimited printing of money will have no negative consquences.

This has lead to major economic tragedies in so many other countries... that there is no need to really explain.

A population that believes in magic money trees... has been watching too much commercial propaganda. They probably think praying will pay off their credit cards, and that bombing Arabs will convince God to pay off all their debts to their God-connected creditors.

Whatever other people may believe, I'm not one of those people. I know that too much use of the tree will cause inflation. I have explained what economic conditions will result in inflation. Most people here seem to agree with Mainstrem economists on this.

One here posted that the "quantitative money theory of inflation" is "intuitive".

My reply to that is that Newton's view on space and time is intuitive, but Einstein's view on space and time is very much counterintuitive. However, all measurements, observations, and experiments confirm that Einstein is more right than Newton is. So, intuitiveness does not always conform to truth. This seems to be true for money supply and inflation. My MMT source says that he has looked at the relationship between the money supply and inflation and could not find one that works. I do not remember him saying how often one works. wats0n here has said that the data seems to show that it is only recent deficit spending that sometimes leads to high inflation. It is an empirical regularity is the term he used IIRC.

[QatzelOk]

Doug Casey On The Imminent Bankruptcy Of The US Government

...Everyone knows that the US government has been bankrupt for many years. But we thought it might be instructive to see its current cash-flow situation.

The US government’s budget is the biggest in the history of the world and is growing at an uncontrollable rate.

Below is a chart of the budget for the most recent fiscal year, which had a deficit of nearly $1.7 trillion...



There’s little doubt in my mind that the government’s expenses are going way up as people demand more. While receipts go down as the Greater Depression deepens. Which it will, as the economy is burdened by evermore taxes, regulations, and currency debasement. That’s on top of the gigantic debt the government and country are buried under.

The government reminds me of a poker player on tilt, betting more and more crazily in hope of magic or luck to bail him out. It always ends badly.

We’ve watched this progression accelerate since at least the 1960’s—a slow motion train wreck. But the inevitable has finally turned into the imminent...

Just this year, the federal deficit is about $11,000 per taxpayer. For this year alone, every American taxpayer has put $11,000 onto his already-overdrawn government credit card.

Luckily, there are several ongoing wars going on with which to blow up the world with...

[QatzelOk]

It's amazing how many "mature adults" don't care about the debt they will leave the next generations.

Here is some of this year's news about debt slavery in Canada:

Debt payments per person in Canada: $ 2,000.00 per person (this could easily double or triple with rising interest rates)

Percent of government revenue going to interest on debt: 6.8%

the provinces and federal government are expected to spend $68.6 billion on interest payments in 2022/23.

The federal government will spend $34.7 billion on debt servicing charges in 2022/23, which is more than what the government expects to spend on child care benefits ($29.4 billion) and employment insurance benefits ($24.8 billion).

And here is a lovely graph showing how previous generations of not-interested-in-politics suburbanites allowed their children to be sold into deft slavery after 1974:

...“In 1974, at the behest of the Bank for International Settlements, the Rothschilds, and foreign banking interests (1), without debate in Parliament Pierre Trudeau ordered the Bank of Canada (2) (in some incarnations the myth claims the BoC was sold to the former interests) to stop lending interest-free to the government for public works and to start borrowing at compound interest exclusively from private banks (3), and because of that you can clearly see our public debt skyrocket on a chart (4). This history has been covered up by the government, as they also ordered the media not to cover the Bank of Canada lawsuit by COMER. (5)”....

This "myth" would transpired in 1974. Look at what happens to government deficits immediately after 1974. They explode. Canada starts running up deficits... even in good years of a booming economy.

Once private banks have a scheme to enslave future generations with debt, this is exactly what they do.... seems to be the lesson that no one has learned yet...

soundtrack

[Steve_American]

It's amazing how many "mature adults" don't care about the debt they will leave the next generations.

Here is some of this year's news about debt slavery in Canada:

Debt payments per person in Canada: $ 2,000.00 per person (this could easily double or triple with rising interest rates)

Percent of government revenue going to interest on debt: 6.8%





And here is a lovely graph showing how previous generations of not-interested-in-politics suburbanites allowed their children to be sold into deft slavery after 1974:





This "myth" would transpired in 1974. Look at what happens to government deficits immediately after 1974. They explode. Canada starts running up deficits... even in good years of a booming economy.

Once private banks have a scheme to enslave future generations with debt, this is exactly what they do.... seems to be the lesson that no one has learned yet...

soundtrack

I said that I'm not one who doesn't care. I just see things different than you do. This is because I know that Canada and the US issue their own currencies, and their national debts have been too large to pay off (in the only way that MS Econ. would approve of, i.e. with a surplus) since 1990. They can always be paid as the bonds come due with newly created electronic dollars. The interest can always be paid in the same way.

Dr. Mosler, the co-founder of MMT, asserts that bonds are currently a UBI for rich people.

This could be stopped by making bonds pay much less interest unless they are held by insurance comp. and pension plan planners. In the same way the SS Trust Fund can be made solvent by selling it special bonds that pay much more interest.

I also have pointed out that in the US, the party that claims to be more fiscally responsible was responsible for the increase in the national debt from 1981 to 1990, when the debt went from $1T to over $5T. It was the Repub Party that made it impossible to pay off the debt.

The Repub. Party also has kept cutting taxes since 1980 on the rich, which is the cause of most of the growth in the national debt.

The rich in the US are under taxed. This is the problem. The problem is not that spending is too high. IMO, spending is too low.

MTers assert that one purpose of taxes is to create unemployment. These unemployed are then available to the Gov. to hire to work for the Gov. So, currently the Gov. could reduce unemployment by spending more or by hiring them all to work for the Gov. in the National Job Guarantee Program that MMT proposes as its sole policy directive.

.
.

[QatzelOk]

...I know that Canada and the US issue their own currencies, and their national debts have been too large to pay off...

Imagine looking at your credit card debt every month, and saying "this is too big to pay off." How long can you play that game before losing your card? (one year?)

The rich in the US are under taxed. This is the problem...

You call it "the problem."

But for the rich, this is "win-win." They pay less taxes to the state, the state goes bankrupt from interest payments, and then - once the state is bankrupt - these same rich people buy up state assets for pennies.

Meanwhile, the masses are bankrupt, lose all their social programs, lose all the public infrastructure, and are slowly poisoned by poverty and repressive measures.

Your "the problem is the rich don't pay taxes" makes it sound like you think this is just an oversight of someone. "Oops... we forgot to tax the rich enough."

Meanwhile, the rich laugh at the way you protect them with your wording.


- "OMG Jeremy, look! Someone on the Internet just said that we may have forgotten to pay enough taxes. Ah ha ha ha ha..."

[late]

Imagine looking at your credit card debt every month, and saying "this is too big to pay off."

Macroeconomics is different from microeconomics.

[Potemkin]

Imagine looking at your credit card debt every month, and saying "this is too big to pay off." How long can you play that game before losing your card? (one year?)

As the saying has it, if you owe your bank $100 thousand dollars, then you’re in trouble. But if you owe your bank $100 million dollars, then your bank is in trouble. As @late pointed out, the US government is not like a private individual.

[Rancid]

The US never has to pay off the debt. It just needs to balance the budget (inflation will reduce the debt from there on out). Even then a budget deficit can be sustained if the economy continues to grow. Not advising it, just stating this point.

[Steve_American]

As the saying has it, if you owe your bank $100 thousand dollars, then you’re in trouble. But if you owe your bank $100 million dollars, then your bank is in trouble. As @late pointed out, the US government is not like a private individual.

I agree with the last sentence, but your reason for it is flawed.

There are 2 reasons for it.
1st, the Gov. can and does create money/dollars when it deficit spends.
. . . Note that banks also create money in concert with borrowers when a loan is made.
2nd, the US Gov. spends about 150 million times more than the 2nd largest spender in the economy. So, it is like the paradox of thrift. It says if an individual saves a lot more it has no effect on the economy, but if everyone saves more a recession starts because money saved isn't spent, so incomes fall. But, the Gov. is big enough to equal "everyone" all by itself.

The 150M is just my guess, it is likely way off, but the concept is valid.

[Steve_American]

The US never has to pay off the debt. It just needs to balance the budget (inflation will reduce the debt from there on out). Even then a budget deficit can be sustained if the economy continues to grow. Not advising it, just stating this point.

I think we disagree. I have said many times here and you have not been convinced that, just balancing the US Gov. budget will cause a recession every time. This is because the US has a trade deficit. This deficit is money leaving the US economy and not being returned, in general it is saved by buying US bonds. This is sort of being returned as saved money.
It is also because many institutions and people want to save money/dollars, and running a deficit and selling bonds lets them save in the form of bonds and replaces the money in the economy.

This combined saving reduces net spending and spending is how we measure GDP. So, reduced spending is also reduced GDP, and falling GDP for 2 Quarters is the definition of recession.

So, the national debt pretty much must spiral upwards. It would spiral upwards slower if the US taxed the rich much more and kept interest rates on its bonds lower on average. So, raising interest rates to fight inflation that is not caused by excess demand in the economy doesn't reduce inflation but does add to the national debt and the income & savings of bankers and other rich people. An example of how inflation being caused by OPEC raising the price of oil is the 70s and 80s when we had stagflation because interest rate increases didn't end inflation, but did cause a recession.

[Steve_American]

1] Imagine looking at your credit card debt every month, and saying "this is too big to pay off." How long can you play that game before losing your card? (one year?)


2] You call it "the problem."

But for the rich, this is "win-win." They pay less taxes to the state, the state goes bankrupt from interest payments, and then - once the state is bankrupt - these same rich people buy up state assets for pennies.

Meanwhile, the masses are bankrupt, lose all their social programs, lose all the public infrastructure, and are slowly poisoned by poverty and repressive measures.

3] Your "the problem is the rich don't pay taxes" makes it sound like you think this is just an oversight of someone. "Oops... we forgot to tax the rich enough."

Meanwhile, the rich laugh at the way you protect them with your wording.

[img]htt[==]ps://external-content.duckduckgo.com/iu/?u=https%3A%2F%2Ftse2.mm.bing.net%2Fth%3Fid%3DOIP.6A8iCM-AkonoesTI0i9nNAHaE8%26pid%3DApi&f=1&ipt=fb87a00872f9b927c7c1cc7edcdc442955dcf0f6512995fad669aca076b0c8d8&ipo=images[/img]


- "OMG Jeremy, look! Someone on the Internet just said that we may have forgotten to pay enough taxes. Ah ha ha ha ha..."

1] The others have already told you that the Gov. of most nations is not like a person, because they issue the currency.

2] It is the problem from the POV of the American people as a whole, and I side with the American people.
Note; the Constitution starts with the words, "We the People".
. . . Yes, the rich are winning the class war.
. . . The US can never go bankrupt. Yes, the MAGA idiots in Congress can choose to force the US to default, but this is unlikely because the rich own Congress, and they or their corps own the bonds that are being defaulted on, so it can be only temporary. Also, a default would crash the world economy and slash the profits of the corps the rich own. So, the rich will never let that happen.

3] Thank you so much for mansplaining that to me. Without your explanation, I would never have seen the huge conspiracy that has lasted over 100 years. It is funded by the rich who pay MS economists to create economic theories that benefit the rich and crush the massses and to keep all other theories from getting a fair hearing, and it includes the politicians who are bribed to do what the rich want them to do.

[Skynet]

The USA takes 8% of GDP in debts, to achieve 2% GDP-growth... this is not sustainable.

[Steve_American]

The USA takes 8% of GDP in debts, to achieve 2% GDP-growth... this is not sustainable.

Like I said, tax the rich and corps more.
If we do that, we will reduce the deficit.

Because 99% of what we tax away from the rich is money they would have saved anyway, this will not reduce their spending much and so will not reduce the GDP much.
The problem in the US is we don't tax the rich enough.
We also don't spend enough on mitigating and adapting to climate change.
Also, wages should be twice as high, with prices unchanged, somehow.
__________________________________._________________________________

BTW ---
IMHO, it is obviously also unsustainable for the corps to take a larger percentage of the GDP each year while the wage earners are left with a smaller percentage of the GDP each year. In the long term this will result in the corps getting 100% of the GDP and the workers 0%. This is unsustainable.

[Skynet]

@Steve_American Switzerland invested its bankmoney in education, 45% of population has a Bachelor degree... more then Ashkenazi Jews...

USA has falling College numbers, no wonder when you have to pay for it.

[Steve_American]

@Steve_American Switzerland invested its bankmoney in education, 45% of population has a Bachelor degree... more then Ashkenazi Jews...

USA has falling College numbers, no wonder when you have to pay for it.

I note that you didn't disagree with anything that I said.

I'm fine with that Swiss use of their deficit spending. Switzerland is not in the EU. So, it is like the US, UK, Canada, Japan, etc.

[Skynet]

I note that you didn't disagree with anything that I said.

Tax the rich but the small and medium family owned companies should not have an iheritence tax.

[late]

Zero Hedge...

Zero Hedge is libertarian, and nuts.