What the political discussion should be about
Here's a nice summary of the monetary issues facing the US. The first ten minutes should be enough to get the gist, but the full video is worth the listen IMO.
http://www.youtube.com/watch?v=VjGTaXhpObM
66% of new money creation is done by the 6 largest banks, all of it interest bearing. Have you ever wondered why you initially pay almost all interest and little principle when taking out a new loan?
The FED also creates money by lending it to the government, apparent by the incredible amount of debt on our books, primarily through the purchase of treasury bonds - bonds that we the tax payer repay, WITH INTEREST. We pay MORE back to the FED than was created! Where does the money come from? New debt.
Debt based money is a modern phenomena and the results are becoming apparent around the world.
justintime Well, we haven't paid the bonds back. Otherwise the debt would be decreasing.
And most of the interest collected by the Fed is transferred to the U.S. Treasury.
jerseydutchman2 I've been against the fed since Alexander Hamilton first suggested it. BAD IDEA from the beginning; set up to be a controlling, corrupt, organization from it's inception.
But, like Social Security, we can't just end the fed at this point. But something has to be done.
About Hamilton & US economics:
http://www.lewrockwell.com/dilorenzo/dilorenzo151.html
JeffersonRepub JR, that's a link to an awfully one-sided article. The purpose of debt was to provide funds so the U.S. could start to grow its infrastructure and manufacturing capabilities. Such funding has to come from somewhere, after all. And a national debt preceded Hamilton, as John Adams and others were able to borrow money from the Netherlands during the Revolutionary War.
Unfortunately there are always abusers. Hamilton himself was extensively investigated, but cleared of any wrong-doing. (BTW, Robert Morris, who was so key in raising funds for the war, ended up in debtor's prison.)
Further, the Bank of the United States set up by Hamilton is not the same as today's Fed. And at least the Fed can take swift action when needed. Congress?
It seems from the beginning that urban people have been comfortable with banks, rural people suspicious of them. Hamilton, a city guy; Jefferson loved farming and his rural Monticello retreat (well, he did love Paris too).
JD2, I don't think it's one-sided at all. It's simply the truth, historically accurate. The difference lies in whether you think Hamilton had the right or wrong idea for America. We obviously disagree.
The Bank set up by Hamilton is a direct predecessor to the fed. Without Hamilton's bank and the precedents it set, you wouldn't have a fed. Altho I have little doubt had Hamilton not set up the bank, someone down the line would have. And since's Hamilton, there has been the 2nd Bank of the United States (under Madison, another 20-year charter that was also not renewed). Then finally, the Fed.
We've had discussions about the Fed before, all the information showing it's corruption is there is one choses to dig for it. Frankly, the "1%" isn't the problem, it's the bankers who own & run the fed that are. Why don't we put the fed on a 20-year charter? Planned extinction.
JR, it is easy to see the one-sidedness of your linked item by a sentence such as this one: "Jefferson and his followers opposed him every step of the way because they understood that Hamilton's agenda was totally destructive of liberty."
"understood"? Maybe if he had used the word "believed" I would buy it. But even then, "totally" destructive is too much.
BTW, it seems all or most advanced nations, not just the U.S., agree on the need for a central bank these days.
jd2, isn't it possible that the divisions we see, the 99.9% vs the 0.1%, have some other foundation other than greed?
I see your arguments, and honestly if I weren't one to question things I'd agree with where you're coming from. However, the results of our debt based economy are evident everywhere one looks. Think of it as the "theory of everything" for our society. Just about everything can be linked to the underlying system.
Sure, easy money is a useful "tool". But I think it's getting more and more prudent to ask what the real purpose of the tool isl? Congress has the authority to coin money, so why did it relinquish that responsibility? Certainly they could create money as easy as the FED does, so why insist on degrees of separation?
Monetary policy, ultimately, is a game that requires never ending "growth in the economy". But that's not the whole story, is it? When bankers say "growth" what they mean is more debt: more loans so that there is more currency in circulation in order to pay the interest on the previous loans. So the whole mantra that we need growth really means that we need more debt to keep the money supply, and thus the economy, from contracting. That's our system. Isn't it prudent to discuss it and understand it?
I don't care what other "advanced nations" do. We are AMERICA. The great experiment. We made a country uniquely individual in the world. A country like this, with this much individual liberty, had never before existed. So there was no "precedent." What other countries had done was irrelevant. Other countries had kings... it was good enough for them, why not for us? (and Hamilton actually wanted a govt closer to the monarchy of UK). Because we were AMERICA, that's why. But unless you understand and except the unique individuality of America, it's not even worth debating, because we're coming from two different planets. That, in effect, is one of the major problems with the separation of political ideologies in America today. Those that want to be "like everyone else" and those that understand that there is ONLY ONE "America", and believe in American individuality & exceptionalism.
JIT,
I'll just have to punt on this for the time being. You may be making unwarranted assumptions about my thinking. I did just now decide to watch your friend Bill Still, who I had never heard of. That link is pretty entertaining. He seems very sure of himself, and for the time being I'll be open-minded about his message.
But the phrases he throws in, like "the doom of civilization" and "the new world order", presses my skepticism buttons, I have to admit.
I hear you JD2, this is one of the reasons I brought up discernment in a previous post.
I just don't see a lot of discussion of how our economy works in a nuts and bolts fashion but really would like to. It's a different perspective that just isn't considered too often, so I can deal with the fringe as long as the underlying concepts have merit. Thanks for being open minded...
Justy,
That was very interesting although, like Ron Paul, while I am actually like 80% on board, the 20% really scares me....:>) Which is too bad since I think both have some very excellent ideas, just some very scary ones too.
Like his comments "defensible borders resolve the immigration issue which otherwise will lead to the "New World Order." OK, that's scary that he believes some short order cooks, landscapers, farm workers etc. constitute the advent of "the new world order...." Are the new world order bankers depending on this to take over the world?
Or, while he is still thinking about it, no doubt that tarriffs will work to restore American manufacturing. Isn't that just a tax that "we the people" will pay for higher-priced goods? Hmmm.
Or that the sky will fall during the next President's term. Maybe yes, maybe no in most people's opinion, but Bill Still knows. Scary.
Or Federal Reserve officers should be precluded from running for public office. Man, that's just unAmerican dude.... I think the bigger and scarier question is how the heck did Cain become part of the Fed. That's terrifying.
Or, and he agrees with Ron Paul on this one --- bailouts, etc. etc. just "prolong the agony" and we should just let the economy do it's job. OK, the others are kinda funny, but this one is beyond terrifying. I have said this before that in the long term the market will correct and reach equilibreum --- I believe that. But it is also true that if you let this happen, that in the short term there will be much, much, more suffering that if you fool with the market and soften the blow or buffer the pain. How can you on one hand say tarriffs will work and on the other, let the market do it's work unfettered. So sometimes he wants to play with the market, other times he does not and the time he doesn't would mean bank failures = financial market failure = doom OR larger housing market collapse = more people lose their houses = more families in pain Scary. I believe that one of the jobs of government is that, sometimes, you have got to tweak the market a bit, and for a limited time, to soften the human pain of short term rapid corrections.
I do like:
- 66% of the money created by six banks is bad. Too me it's the 6 bank issue that is very bad; he agrees but also does not like banking expansion via loans --- that does not bother me as much. This should be fixed.
- Banks and finance houses should be spilt up and regulated. Did he really say this? So much for the free market factors. Amen brother.
- Bank asset/debt ratios should be lower and should be regulated. Again, amen to that brother
- Make the Fed show us the current levels for M3. Heck, M1 and 2 too please. Another Amen.
- debt = GDP = too much. Well, we all actually do much, much worse in our private lives via mortgages but OK. Don't know the level, but debt (and spending) are too too high right now even if its and attitude thing versus a math think. I mean, attitude = reality sometimes, especially in finance and investing.
- FED = bad. OK, Congress "delegated" they did not reliquish authority and they are supposed to exercise oversight as if they were running it. Guess that didn't work for Fannie Mae either... I think the FED could be made to work but improvements are needed including governance model, transparency, elections, and reporting.
- Issue money w/o debt --- what? Not sure we can prosper that way
- Govt borrows from banks. Is China a bank?
- Banks Create Money and are unaccountable to the people. Not exactly true I think at least as mcuh as a publically traded company is beholden to the shareholders.
I still don't come away with we need to issue debt-free money, end the fed, tariff foregin goods to create US manufacturing, but would be willing to listen more since, like you, I would really like understand more about how the Fed works, how they (and Banks) create and manipulate money, how the IMF plays in this game, and more. I find it very interesting.
But leave the border crossing problem to someone else.
Good post, very interesting.
JR's --- not so much. I ditto JD2's comments there.
mistergoogle "And most of the interest collected by the Fed is transferred to the U.S. Treasury."
I don't know the details but I believe that to be true. The figure I read said the FED kept about 13% of the interest. However, that does NOT apply to every other for-profit bank in the system.
Let's say the US Government wants to sell $10B in bonds and the FED is the willing borrower. The FED, being a bank, doesn't loan it's reserves (what it has on hand) so it creates the money for the transaction. For simplicity sake let's assume they create the entire $10B and that physical cash will be transferred to a US govt account to pay federal workers.
US offers bond sale to FED at 1% interest.
FED says OK and creates a $10B asset on it's books.
FED asks the US to print the physical money.
US hands over IOU's (Treasury bonds) to FED and FED gives the US new money.
---
US spends the money, employees draw down the cash from the bank.
---
Bond matures and US pays the FED the original principle plus $100,000,000 in interest.
FED destroys the original principle that it created "out of thin air".
US govt *taxes* the public to come up with the $100,000,000 in interest.
FED has "earned" $100,000,000 for the privilege of creating money from nothing. A large percentage of this supposedly goes back to the US.
-- Remember though that the above is replayed for EVERY LOAN made in the banking system, except you pay the interest directly from your savings/earnings (you don't have the luxury of taxing another party to make the interest payment).
At the end of the transaction, MORE money is required than what was originally created for the loan.
Where does the money for the interest come from?
How is that money created into existence?
More importantly, ask yourself *who* is paying that interest?
Granted, the actual process is not as simple as I describe. However, if you look at the monetary/debt charts I've posted in the past I think you'll see that the gist of what I just described is pretty much how the system has played out.
Without a fine balance between increased economic productivity and new lending (money creation), our economy can remain stable only as long as our debt grows to cover the difference (new debt is needed to create the money to pay the interest on previous loans). Thus the reason why we have a "debt based economy". The main argument for the system is that easy money stimulates economic productivity, which is true. What's not discussed though is the irresponsible consumption through the taking on of more debt. Easy money to buy stuff that doesn't result in productivity is hurtful to the system, yet that's exactly what we've been doing for the last 40 years or so.
My point here, finally (lol), is that much of what many complain about (OWS, our debts and deficits, entitlement programs, etc) is directly related to our ability to "create from nothing" the money that's required to provide all the services. Just like it feels good while we're maxing out the credit card, sooner or later our income won't be large enough to pay the bill, let alone pay off the balance. IMO it's time to take a good look at the system that has created the imbalances we see today.
JIT,
I thought that except for the "emergency" recent actions by the Fed, i.e. QE1 & QE2, that otherwise the debt taken by the federal Govt over the past 40 years was borrowed from willing lenders, like Japan and China, not the Fed. Am I wrong?
JD2, as far as I know the FED has always had US government securities on it's balance sheet. The closest I can find tonight to confirm is this summary pdf (that happens to be a bit difficult to navigate). Look at the cyan colored section of the graphs.
http://www.financialgraphart.com/history_of_fed_free.pdf
I think you're correct that the composition of US government debt isn't predominately the FED, but last year the FED did outpace China as the number one holder of US securities.
http://dailybail.com/home/chart-fed-surpasses-china-in-us-treasury-holdings.html
Besides, if you really think about it the debt around the world is completely circular: Everyone is in debt, and everyone owes everyone else. Take Japan, for instance, who has a debt to GDP ratio of something like 200%, yet they still buy our treasury securities. Go figure.
Who owns the debt. Well, here's the explanation and history including the fact that the US has had debt from day one. Otherwise, no revolution! And yeah yeah, yeah, Jefferson and the founding fathers started this whole thinkg by taking out a loan.
http://en.wikipedia.org/wiki/United_States_public_debt
In all, as of July, the Treasury owes foreigners and foreign governments $4.5 trillion dollars with Japan being the big owner. But Americans own most of their own country's $14.3T of debt with US Households following China as larger debt holders. As of July, due to QE I beiieve, the Fed held a big bag of US debt and SSecurity has always been a top owner.
But as of 7/11, who owns our debt? You will be surprised.
Hong Kong = .9%
Caribean Banking Centers = 1%
Taiwan = 1.1%
Brazil = 1.5%
Oil Exporting Countries = 1.6%
Mutal Funds = 2%
Commercial Banks = 2.1%
State, Local and Fed Retirement funds = 2.2%
Money Market Mutual Funds = 2.4%
UK = 2.4%
Private Pension Funds = 2.5%
State and Local Govt = 3.5%
Japan = 6.4%
US Households = 6.6%
China = 8%
the Fed = 11.3%
Social Security Fund = 19%
Again, debt in iteself is not bad. Debt as a percentage of GDP (what you bring in for revenue) is a more accurate indicator of potential issues, and yes, we have issues, especially given the rate of change, the rate of increase. However, again, when you look at your own personal finances, there are times, early in life, when you hold a whopping debt (mortgage and new car) when viewed against youir own personal GDP (income). So, to me, the biggest worry is the rate of change of our debt/GDP which we need to curtail in order to keep our abilty to borrow (credit rating) very, very high.
PS I think debt is looked at on the balance sheet as a long term or short term DEBT liability, interest paid is an expense, also a liability. Both would have to be balanced by the Asset side of the Balance sheet. Both would be accounted for by the federal government or The Fed, accordingly. If you are on the recieving end of the bond, then interest is revenue, an asset....:>)
Mr.G, I've corrected you on this before, and you acknowledged your error, but here you go again right back at it. GDP is not what the government brings in as revenue, so it is in no way analogous to a household income paying on a mortgage.
RJ The math is simple. The U.S. Government spends way too much based on the revenue it brings in.
Some say "raise taxes to bring in more revenue". That's been done for a long time. As some point we need to reduce spending.
Until the Federal Government can demonstrate some fiscal restraint, taxes should not be raised. Yes, I'm sure the very wealthy can afford to pay more taxes, but until the government can demonstrate an ability to cut spending, I don't blame them for not wanting to.
As for Warren Buffett, Bruce Springsteen and Michael Moore who have said they want to pay more. Send a big fat donation to your state government and tell them to use it to help balance the budget. I'm sure the Chris Christie will be glad to have the extra cash.
Freedom Watch Debt isn't bad? Hmm, I suppose if you conduct yourself responsibly you are correct, debt isn't bad. But what if you've been a bad, bad boy and have played the shell game using debt as you cover?
Assuming your number of 19% for the amount of debt "owned" by the SS trust fund let's do the math. 19% of $14.3T is about $2.7T. The size of the SS trust fund is about $2.6T. Uh-oh, somethings fishy here. That can't be right, can it?
As it turns out, yes, that's exactly right. There's no real money in the SS trust fund, only IOU's. Do you remember over the summer when we had the debt ceiling crisis and President Obama and Timothy Geithner were crying that SS recipients wouldn't get paid if the ceiling wasn't raised? Looks like they were correct.
http://www.forbes.com/sites/merrillmatthews/2011/07/13/what-happened-to-the-2-6-trillion-social-security-trust-fund/
Since the facts all seem to jive here let's make some sense of it.
The SS trust (as in "a fiduciary relationship in which one person (the trustee) holds the title to property (the trust estate or trust property) for the benefit of another (the beneficiary", according to Dictionary.com) fund - a fund in which our government is LEGALLY RESPONSIBLE for maintaining YOUR funds - must sell it's IOU's in order to fulfill it's obligations otherwise everyone would know there is no actual money there. But if the government doesn't have the money to buy them back, and can't borrow from someone else to make the purchase due to a legal debt limit, who's going to do it? No one, of course, which is one of the reasons why the debt ceiling HAD to be raised. If it weren't then the charade would have been exposed for all to see.
And if the SS trust fund owns our government debt doesn't that mean that YOU AND I *directly* own 2.6T of our national debt? But wait - if the SS trust fund sold all of their bonds the government would have to borrow the money to buy them back. Doesn't that imply that our national debt is actually 2.6T MORE than what's being reported? But this assumes that you as a citizen are entitled to your claim on the money you've paid into SS - it *is* supposed to be yours, thus the "trust" part of trust fund. If you don't think that's the case, though, no harm no foul, right?
And this is where the problem comes in: it's not just SS that the govt has raided in order to pay for all the dangling carrots hung in front of the American Citizen. There's debt in a great many forms, all obfuscated in different ways but still for the same reason. We simply have been living beyond our means and it's finally catching up to us.
Do you recall my saying that all of our problems are about to come down to simple math? The above is a prime example.
Great discussion here......Below is interaction between a friend of mine and me....
Me: hey have you looked at Ron Paul.
Him: Yes I have...I like him but I don't want to waste my vote on someone who can not win.
Me: Arent you doing that anyway.
Him: good point. I think so. Let me take a closer look at him.
Thats all I and others are asking. Take a look at Ron Paul and don't consider it a wasted vote because he can not win. He can.
Steve-0 JIT,
I think you are mistaken about the SS bonds. If the SS bonds were sold, the Treasury would simply owe the $2.6T to the buyer of the bonds instead of the SS Admin, with no change in the deficit.
Social Security should be done away with. Put the money in a 401 k. We can't afford this any longer!
vousJD2, I was implying that the government has already spent the SS fund and so it can only replace them by going into debt further, by borrowing more to replenish the funds. My premise is that the funds are supposed to be there, by law I'm assuming. But it's not additional debt if you or I don't make a claim on the money, which I guess is the "out" the government uses to take the funds for other uses (think fractional reserve banking). Given how obtusely things are run I guess it's perfectly legal to take the money from a "trust fund" though.
Maybe they should change the name of the SS fund to the Fractional Reserve Retirement Fund - only take a fraction or you'll crash the system, lol.
JIT,
If the Treasury had to borrow money to replenish the SS funds, it would incur $2.6T of debt, then by paying it to the SS Admin it would reduce that debt by $2.6T, with the overall deficit unchanged.
But I certainly agree that SS beneficiaries can only be paid if the Treasury can continue to borrow the money, or print it if there are no willing lenders. That's the bigger issue that you are pointing out, I think.
vous - are you stating that the SS money that is collected should have the ability to earn money and lose money the same way a 401k does. Or are you saying kill all SS and let the people put it into a 401k all on their own and manage their retirement. Interesting concept but do you trust the people to fund themselves is the question.
You guys should read "The Creature from Jekyll Island" by G. Edward Griffin cause you have no clue what your talkin about & research Andrew Jackson & his stance on the Central Bank of the US. The last US President to take on the private Federal Reserve was JFK & they blew the top of his skull off onto Dealey Plaza.
Its history people - these global banker scumbags control your life & you don't even know it - which is kind of sad!
"Give me control of a nation's money and I care not who makes it's laws" — Mayer Amschel Bauer Rothschild 1863
Lot's of good discussion around "Debt".
There are some really good reasons for incurring debt. However, the US government has gone overboard.
The U.S. government needs to reduce spending. On this most people agree (except perhaps president Obama).
JD2, you're correct except on one point: The funds do not belong to the government. They are held in "trust" for YOU. You have an individual claim on that money whether or not you intend to collect on it immediately or defer it for the future.
While it may not be illegal for the government to borrow your money from the trust account, certainly the irresponsibility at the levels we're seeing here is clear. Wouldn't you agree?
As for Ron Paul, I love the guy on the domestic stuff. But I've said it before: not only to I completely disagree with his foreign policy and think it's INSANE, I think it will get more Americans killed. I cannot in good conscience vote for Ron Paul.
In the primary, I will vote my conscience- the person I think would be the best president. I won't vote for "who I think can win." I'm done playing that game. It has gotten the conservative movement (which is unfortunately connected to the republican party) NOWHERE. It's going to be very interesting what effect the Tea Party will have on this next election... moreso in Congress than the presidential... there's not much that can be done with that; you either vote A or B.
RJ --- technically you are correct. However, the assessement of debt/GDP is valid, many analysts do it which is why I use it as a measure of the priority of raising or lowering our debt. GDP is the country's income which is part of the formula for determining our credit worthiness to create debt -- the ability for the US to get a loan. It also is the vast majority of the US Gov revenue stream has a direct affect on the revenue used to pay back the debt through taxes. So while technically correct, I think the association is close enough to make the analogy. Touche though.
Justy: Yes, bad debt is bad. I have always said it is more about what you get for your money, not the amount of money itself. If you take a loan that you can pay-off that has an excellent return, that's a good loan. Obviously, not being able to pay OR a bad return would be ...well, bad.
To the rest: Yes, we are spending too much, no we do not tax (especially the rich and the corporations) fairly nor enough, and yes-yes-yes- the debt is too high. But we need to fix it all at once. We need to raise taxes on the rich, end loopholes for the corps and lower their taxes, re-engineer entitlements, and balance the budget (for a few years at least by mandate). So let's get on with in and quit the Congressional stalling. Of course, that's not what Justy was talking about, but hey....here we go again --- it's pick on Obama and AWDAWGN time. (anyone who does not agree with Grover Norquist)
As to Warren Buffet et al making a contribution. Why should they? They contribute a lot already. They are asking for their peers to pay a fair share. Something wrong with that? The rich own the HIGHEST PERCENTAGE of AMERICA than forever, pay less taxes, percentage wise, than they have in a couple of decades while YOU OWN LESS of AMERICAN than ever. It is just not fair, it is not a level playing field. The game is rigged and you been pranked by Grover Norquist to help protect the assets of the rich.
Tax and spend Obama. Blah, blah, blah..... Liberals loose with your pocketbook. Blarney. Here's a picture for you kids. Just click on the boxes and the graph, with numbers, will appear. LOOK -- under spending, last 3 years of conservative controll = 10.8T, 3 years of Obama = 10.9T. Wow, that's a gusher of an increase. Maybe you missed than conservative spending since it went to Haliburton, BP and Blackwater-like ourtsourcers. Maybe Obama is just trying to methdone the heroin addiction to spending that the conservatives needled into our arms. But he certainly is not upping the dosage. How about the last three years of conservative taxation, hmmmm, that equals. 3.3T versus Obama's 3.0T. Damn, neither tax nor spend. And if you go back to the last liberal, OMG, he's the best ever....... Go figure but quit laying it off on Obama and those terrble, terrible liberals, it just ain't true that he is worse, he is actually better. But he's clearly not good enough, especially when dragged down by these TeaBagger do-nuttins. Here's the chart: http://www.washingtonpost.com/wp-srv/special/politics/30-years-spending-priorities-federal-budget-2012/
Again --- here's one liberal saying --- mandated balanced budget (for a few years), raise taxes on the rich, take out the loopholes and lower corp. tax, re-engineer entitlements, pay down the debt, and quit mis-labeling and genralizing, let's get to the point and fix it, not just get ourselves elected.
Click on the totals to see total spending, total revenue, and then the sub-boxes to see taxes. Use reset often..... Have fun.
Now let's get back to Justy's topic on how illegal immigrants are helping The New World Order take over or how Kennedy got killed by The Federal Reserve (there was a ATM on the grassey knoll....). No what, it was the debt, that's what the topic was..... (new thread time....again) :>
This is the philosophy you dislike so much:
"Speak softly and carry a big stick"
No one, and I would think this includes Ron Paul, has said that the US will never have to use the stick, but IMHO that's where the philosophy should *start*. Of course the safety and well being of the US and it's citizens is of utmost importance; that will not change. Defend, not dictate, is the key distinction.
Not everyone agrees with aggression first, discussion later, just as not everyone agrees with the forceful oppression of other countries for "preventive" means. This includes not only military force but also oppression by monetary means. I'm still sickened by the current mindset that "preventative war" is acceptable in our society. That flies in the face of everything this country stands for.
Besides, have you ever considered the cost - both in monetary measures and to our social fabric - of our endeavors of empire? Look around and I think you'll see both are obvious.
We are a "money for nothin'" society because we've been led to believe that our economic prowess is far superior than our neighbors yet few of us choose to look at the consequences from that prowess (the point of this thread).
We have long since cast off the societal belief that people (and groups/countries/etc) are innocent until proven guilty. Virtually every law on the books these days stems from a *preventive* viewpoint - take away some freedom because one or more of us *might* someday harm another. IOW, we are PRESUMED GUILTY and have given up some freedoms because of it. That's a HUGE mindset change from where this country started, wouldn't you think so Mr. Jefferson? Anyway, we have now applied that same mindset to the rest of the world: We must police them, oppress them, not for what they've done but because of what THEY MIGHT DO in the future.
Sorry JR, but our current collective mindset of presumed guilt makes no sense to me at all. Build up a very strong defense, which is precisely what Ron Paul wants to do, and hold it in reserve as both a deterrent and punishment for actual actions. And if you are worried about nukes, which is the typical response to taking a defensive position, I have one comment for you:
http://www.cdi.org/nuclear/database/nukestab.html
There are more than 20,000 nuclear weapons in the world today, the US still being on the top of the list. That's a pretty big deterrent all by itself, wouldn't you think? Besides, we should probably ask *why* someone would want a nuke in the first place. You know my position on that as well.
Preventative war has certainly added to our deficit and to outsourcer's coffers. Lots more than we spend domestically for those welfare and unemployed cheats (and valid folks needing help too).
JIT,
We've debated Ron Paul before. No need to re-hash. We'be both made our decisions about him. Time to move on.
Here's something, that you've talked about before I believe, that's truly terrifying:
http://gawker.com/5865089/20-things-you-should-know-about-americas-most-horrifying-new-law
And as for the Ron Paul thing, I will say this, only because I'm not sure I've voiced it before:
Ron Paul thinks we are responsible, at least partly, for 9-11. That's like saying we are at least partly responsible for Pearl Harbor. But I continue to contend, that whatever blame we may have in either of those 2 events, they did not constitute war being declared upon us. Once you kill our people, you will die. I don't care what your reasons are. The sheer fact that Paul even holds the opinion the we in part can be blamed for 9-11 is all I need to hear from him to know he isn't suited to be President of the United States.
Yes, JR, we have gone over all of this already. If you are honest with yourself though you will see that Mr. Paul speaks the truth. Much of it is based on what I wrote above and on how our actions are viewed in the world. We can argue all day long about whether we should continue to dictate to the world through force or stand tall with a strong defense, both views having merit, but to ignore the consequences of either would be a big mistake IMO. Blowback is not an unexpected or even unanticipated consequence and has manifest itself in terrorist acts. Why should we be surprised?
The easiest way to understand this is to ask yourself how you'd feel if China did to us what we do to other nations around the world. Would you not pick up arms if China was conducting drone attacks in Hackettstown? I think you would, as would many others I'm sure.
Regarding that link JR, whoa.
"Citizens who are suspected of joining Al Qaeda are opening themselves up “to imprisonment and death,” Mr. Graham said, adding, “And when they say, ‘I want my lawyer,’ you tell them: ‘Shut up. You don’t get a lawyer. You are an enemy combatant, and we are going to talk to you about why you joined Al Qaeda.’ ” "
We're screwed without Ron Paul I'm sorry to say...
iJay "if I am honest wit myself"... see, here's the problem: I AM being honest with myself, just as YOU are being honest with yourself. You think YOU'RE right, I think I'M right. Just like YOU think Mr Paul would make a great president, I think he is dangerous. Just as some people thought Obama would make a great president, I did not.
That's why we have elections. If we could all "make each other see the truth" (impossibility of course), then we'd all agree and wouldn't need elections, would we?
As for the link/law, I'm with you on that one: 100% against it. However, if there is someone who is armed, walking around with a bomb strapped to their body or a possible detonator/cell phone, or a gun, shouting "allah akbar!", I still say we shoot them on sight. No arrest, no questioning. Just shoot them dead. Because I'm tired of Americans getting killed. I'm glad the troops are coming home, I say let that part of the world implode (with the exception of Iran: they MUST be stopped, either by Israel or by us; before they develop nuclear weapons, and if that means an airstrike, so be it.) But I have no concern for the so-called "rights" of ANYONE walking around killing people. Your rights, whatever they may have been, expired the moment you decided to do harm to the US populace... ESPECIALLY if you are not an American citizen.
I don't think we need such a law in place. Just make sure the shooters (be they police, FBI, CIA, whatever) are good enough to insure a KILL. Defense of the public against terrorism, period.
This hold n detain without representation has been around in one form or another since 9-11. Even Hillary voted for it....:>(
"Freedom is never more than one generation away from extinction. We didn't pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same, or one day we will spend our sunset years telling our children and our children's children what it was once like in the United States where men were free" -- Ronald Reagan
"In war, truth is the first casualty." -- Attibuted to lots of people.
Freedom is also a casualty. Early on there was a case of a middle eastern storeowner, detained, denied legal counsel, etc. He lost his business, his friends and more. Turned out a crazy ex-girlfriend turned him in for spite but took the authorities years to determine and by then, all was gone.
Sorry, but like Ron Paul until he gets crazy. Like his idea to end FEMA and return that responsibility to the States. Can you imagine NJ covering what FEMA did this year or the Gulf Coast covering Katrina's mess. Ron's example of his beloved Galveston doing just fine is bogus, FEMA was all over that saving a few thousand and the state's handling killed a number of people. Just a bad idea and he has a few. Just of little too extreme for me even though I do like a lot of his ideas.
Huntsman seems better to me and there is some Republican Gov out there that is not running that is better than all of these guys. Just can't remember his name.
Google says: mandated balanced budget (for a few years), raise taxes on the rich, take out the loopholes and lower corp. tax, re-engineer entitlements, pay down the debt.
When you say "raise taxes on the rich" what is "rich"? Be specific. At what income level would you have them pay more?
As for the other items, good luck! The only thing our government has been able to do is raise revenue and spend more. Re-engineer entitlements? As soon as any politician proposes cuts to entitlements the loyal opposition will crucify that person. Most often that "crucifixion" is lead by the liberal side but both have done it. Close loopholes? Even President Obama with a democratic majority in both houses couldn't get that done. (I'm not so sure they wanted to. Once the president got into bed with "I forgot to pay $35,000 in taxes" Tim Geithner, that ship sailed). Pay down the debt? President Obama is out campaigning for to spend more, not less.
Mr. G also says: last 3 years of conservative control = 10.8T, 3 years of Obama = 10.9T. Wow, that's a gusher of an increase.
Just because others spent with reckless abandon, doesn't make it okay for Obama to do the same! You can't defend bad policy by pointing to others who did it. Here is the difference. The republican's have never hid there intention to spend more and favor corporate America. It's well known. President Obama said something very different when he campaigned. He won election on promises he had no intention of keeping. I ask you...which is worse?
The wolf or the wolf in sheep's clothing? Both are bad, but one is honest about it.
I like Ron Paul's honesty on the foreign affairs matters and agree our military spending and interventions have been excessive, and have created big problems for us.
And since when does being a suspect = automatically guilty, even for terrorism suspects?
And JIT from five hours ago, yes, I agree.
jd2, we let them get away with indefinite detention at guantanamo - hmmm, seems like someone tried to end that - anyway, now that that policy has become entrenched it is no surprise that this congress would try and push it even further to extend to US citizens as well. all those who cried 'lock'em up and throw away the key' and 'not in my back yard' to building a new super- max prison to house them in after trial have themselves to blame for this. either everyone deserves a trial, period, or we (already have) start down the slippery slope of 'hmmm, who else can we deny due process to?'
realitycheck I too believe in a trial. A trial by bullet. No waiting, very quick. NO APPEALS.
(note: as I have stated, this is for terrorists IN THE ACT.) As far as I am concerned, American soil is now a battlefield. I don't care if it's a cop or a citizen carrying a firearm, if a terrorist is seen in the act, KILL THE M'ER F'ER. Because I'm DONE with this shit!
Due process does not need to be a civilian trial here in the continental US.
A super max in "my back yard" vs. a super max in Cuba? What's the difference?
The person who wanted to close Guantanamo had the chance to get it done. He broke that promise also.
fw, i clearly stated the super- max here would be their home after a trial. that's the difference, and it's a big one.
President Obama signed the order to close gitmo. didn't break that promise one bit.
Um....it's still open. Defend Obama if you wish, but gitmo is still operating, he didn't close it down as promised.
Still, a super max here vs. a super max in Cuba. Prison is prison, why do you care where it is?
"note: as I have stated, this is for terrorists IN THE ACT."
But the proposed law states that "suspicion" is all that's required. That's a long, long way from being caught "in the act". Regardless, without any type of trial the person behind the gun becomes judge and jury with no oversight by anyone - that's NOT what our legal system is about, nor is it a legal system that I would like to live under.
well, there are three branches of government. the supreme court and the executive branch have come down against indefinite detention. sounds like another thing 'the political discussion should be about'(in congress).
i'm enjoying the OP's discussion on the debt. please continue.
JIT, I said I was AGAINST the law. What I am FOR is instant death for terrorists in the act. No law is required. They are in the act of committing terrorism. Kill them immediately. No trial required. No detention, no prison, no lawyers, no nothing. The guy down in Fort Hood is a perfect example. He should have been shot dead. There's no trial necessary for that terrorist pig. He was guilty beyond the shadow of a doubt of murder. Period.
How much time do you have r/c? ;)
I came across this today, lots of reading involved but you may find some of the links interesting:
http://www.ritholtz.com/blog/2011/12/the-financial-crisis-was-entirely-foreseeable/
Speaking of easy money, I'm reading a bio of Andrew Jackson right now, where in his pre-president years as a business person in frontier Tennessee, there was just the opposite: a chronic shortage of money. Because of this, business often had to be engaged by barter of whatever was available - crops, horses, slaves, land. They made the best of it, but obviously it was difficult and inefficient.
Freedom: I guess what I am saying is Obama isn't any worse than the last guy, and frankly, is spending way too much money in a better place at least. Sure blaming the last guy is not an excuse, but it is a perspective especially for those of you saying "it's all his fault and he can do no good." And this isn't a liberal/conservative issue --- the last conservative DID NOT practice what he preached, he lied. And the previous tax and spend liberal was the best for our economy in over 20 years of either conservatives or liberals. And this liberal is fighting hard to turn things around. I just don't see tax n spend nor socialist like others.
I also would add that I agree that when faced with a HUGE recession, collapsing housing market, massive layoffs, and collasping financial markets, taking out a loan and throwing some money at it was a good idea. Might have been done better, but still I think it helped avert a complete global disaster. And yet, we are still tetering on the brink and we have certainly shot our wad.
And I do mean that after Bush put the spending needle so so deep in our arm that perhaps we did need to taper off rather than go cold turkey (I was about to say conservative cold turkey but that would be wrong :>). Perhaps another reason for the stimulus.
But today, I do not see Obama proceeding with that same strategy and I get frustrated at those who generically label his current stance as such. He has lowered taxes on the rich, he wants to re-engineer entitlements, he has put a lot of spending cuts, deficit reduction packages and tax loophole re-engineering on the table. NOTHING GETS DONE.
I do fault his leadership but I also fault the do nothing Republican lead house and the Republican constipated senate even more so. I think he has bent over backwards to reach common ground and their steadfast my-way-or-the-highway since do nothing advantages our party in the next election to be criminal.
You can say he owns clearly the first two years of his Presidency, but the TeaParty and friends own most of 2011 and soon 2012. They own our reduced credit rating, they own the employment stagnation, and most importantly, they own the least productive legislative branch in the history of the house.
mg,
the TP owns the unemployment stagnation? You're insane. And I'm not calling you names: I genuinely think you must be insane. Because there's no way that can be justified except by FICTION. (I'll stop short of calling it LIES.)
And, you're right on the last one: the TP does own the least productive legislative branch in the history of the house, PROUDLY. Thank God. There is hope.
If Mitt or Newt get the nod (neither one is my personal choice), the election will be theirs to lose.
Caged Animal “Insanity is doing the same thing, over and over again, but expecting different results.”
¯ Albert Einstein
And yet JR keeps responding to me. Gives you pause to reflect don't it :>)
caged:
(from Fox news)
Mitt Romney said Friday that if elected president he would make illegal immigrants return to their home country in order to get a green card, in an apparent challenge to Newt Gingrich's statement that he would let some illegal immigrants with deep-rooted ties to their community stay.
Read more: http://www.foxnews.com/politics/2011/12/09/romney-illegal-immigrants-who-want-green-card-must-return-home/#ixzz1gLmMe4T4
Mr. Google, you are stuck.
>You say our problems today are the fault of the Republican Congress and Obama is not to blame.
>You say President Clinton was great but give no credit to the Republican Congress at the time(Newt was speaker as you may recall).
Which is it...who has the power? Clinton had the power in the 90's but Congress has it now?
You are like the media...protecting one side and blaming the other. You have to fair. You have to be balanced. President Clinton did do a good job. President Obama is no Bill Clinton! Both tell lies, but Clinton lied about having an affair with an intern. Obama is reads his premeditated lies from the teleprompter. Obama is not a leader.
Truthiness is here to stay! Why are con's so afraid of having an honest debate, i.e. not putting words in other people's mouth's and/or making outrageous statements to try to distract from a good point made by an opponent? False equivalancies can distract people indefinitely. As if more distraction is what we need as a society!?! It really shows the underlying selfishness of people when they resort to these tactics instead of openly and honestly debating what is best for all, not blindly promoting their own interests.
FreedomWatch says: ">You say our problems today are the fault of the Republican Congress and Obama is not to blame."
I say, "Read my ips" (quoting G.H. Bush Sr's phrase spoken as a presidential candidate at the 1988 Republican National Convention. In the thread you are lambasting I said "I do fault his leadership but I also fault the do nothing Republican lead house and the Republican constipated senate even more so."
You said: "You say President Clinton was great but give no credit to the Republican Congress at the time(Newt was speaker as you may recall)."
OK, to be fair you can give credit to both the Congress and Clinton for working together something that neither this Congress nor Obama has been able to do. Of course, when McConnell and others say they will do ANYTHING to stop Obama from being re-elected, it is pretty easier to see who is more entrenced in not working together and who is content in DOING NOTHING UNLESS IT HURTS OBAMA. To his credit, Obama has initiated, supported, and passed a number of bills and ideas that are conservative. And yes, Newt was there being disciplined in January 1997 by the House of Representatives for ethics accusations and then resigning under pressure from his own party in the next year. And he did partner with Clinton on a number of things, apparently including a lack of ethics.
You say "Which is it...who has the power? Clinton had the power in the 90's but Congress has it now?"
I think it is safe to say that both have powers.
"You are like the media...protecting one side and blaming the other. You have to fair. You have to be balanced. President Clinton did do a good job. President Obama is no Bill Clinton! Both tell lies, but Clinton lied about having an affair with an intern. Obama is reads his premeditated lies from the teleprompter. Obama is not a leader."
Uhhh??? I did reprint the "not a leader" thingee I said and I have clearly criticized Obama a number of times for leadership, owning the actions of the first two years, timing on the healthcare bill and other things. I just like to point out some inaccuracy in the brading of the President that seems to prevail at times.
You really don't know that Obama reads everything off a teleprompter. He seemed pretty good off the cuff at Town Halls, on 60 minutes the other night and other places. And if it's off-the-cuff lies you want, keep talking yourself into liking the Newster so you can see lieing in a whole new light and on a whole new level.
Justy:
Back towards the actual topic: what do you thing about the Payroll Tax Extension, the tax which is used to fund the Social Security trust fund?
Unlike Obama, go figure, I am actually against this one. We should not raid Social Security, we should pony up the $1,000 and foot the Social Security bill and continue to add funds for our retirement.
And we certainly should not tie an Oil Pipeline bill on as a porkbarrell rider to the extension in order to smooth passage by the Republicans.
MG, I agree with you about the payroll tax cut extension. We should not have been fooling with that tax to begin with.
Ok so lets stop all the debate...The election is tomorrow and you are voting for Obama on the Democrat side and the choice of candidates that exist on the Republican side. Yes I know there will only be one, but lets pretend and say they are all there. Who ya voting for. I will cast my vote first. An Informal poll if you will....
My Vote
Ron Paul.
Just some food for thought about Ron Paul...of all places...cnn.com
http://situationroom.blogs.cnn.com/2011/12/13/blitzers-blog-ron-paul-could-surprise-us/?hpt=hp_bn3
I came across this neat little video today that puts our monetary system in a perspective that you may have not seen before:
http://www.youtube.com/watch?feature=player_embedded&v=3dl1y-zBAFg
It doesn't tell the whole truth, of course (it's a 6 minute video) but does IMO put into perspective the scale of our problems. A majority of the loans discussed in the video have been repaid AFAIK, so it's not like the money is out in circulation somewhere. But what it should make us aware of is the amount of "vapor" that's in our banking system. If the FED had to loan 16T just to prevent a massive world-wide bank run might it be possible that we are always just a moment away from reality causing the immediate and total failure of fractional reserve banking?
It's a scary system when you think about it, that most of our monetary wealth can literally vanish in an instant. Sooooo, you think you're really rich? ;)
JIT,
Where does that $16T number come from? I opened up the GAO report and I don't see it in the summary. I'm assuming there never was anything like $16T outstanding at any one time. Correct me if I'm wrong.
JD2, I'm guessing that if you read the report you'll see a series of individual loans that, when added, total to more than $16T. I glanced at the report and quite frankly it would take me hours if not days to go through it page by page and add up the numbers. The 16T number came from Senator Sanders analysis of the report:
http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3
I'm sure you're correct that it wasn't likely $16T at one time. But I think it illustrates the "fractional" part of fractional reserve banking quite well, don't you? If a bank is allowed to lend 90% more than it keeps in reserve certainly there's going to be a problem if everyone comes looking to make a withdrawal at the same time, which I think is a close enough analogy to the situation the Fed was trying to alleviate at the time.
We're a huge, ticking time bomb that is kept from exploding only by our faith in the system. Lose the faith because of the games of those who are controlling it and "poof" - it's all gone.
In one way or another, fractional reserves has always been used even with the gold standard. Even the Knights Templar probably used it in their banking system during the Crusades to leverage assets. It starts with people discovering that walk around with pockets full of gold to be dangerous and counterproduction to keeping one's gold. So bankers in one form or another secure your gold and provide script of some kind. Then the banks get an aha as they realize that no one ever draws out all of their gold and therfore the can "print script" backed by assets in the bank and thus expanding the money supply. Can't stop it, been here a long, long, time.
http://wakeupfromyourslumber.blogspot.com/2005/12/origins-of-fractional-reserve-banking.html
As long as you have banks or entitities like them, they will try to use fractional reserves to leverage assets to make profit.
You can legislate it out and loose all that wealth creation that boosts and drives the economy or you can regulate it and attempt to avoid extreme contractions which is what we attempt to due via regulations, FDIC insurance, and other ways.
It ain't perfect as our recent contraction bears witness but I am not sure you can lay much of the blame on the fractional reserve system for our recent economic debacle. Seems more like a mortgage, security, deregulation ooooops to me.
Don't know what to think. I suppose there could be runs on banks even without a fractional reserve system. The governments around the world use experts to determine how much capital a bank needs to retain in order to stay safe. But in a crisis situation that amount could be inadequate.
So a collapse of the financial system is just one of many ways that we could see the end of days. I'm not sure how much energy we should spend worrying about it. And it would seem, as MG suggests with his link, that fractional reserve is a natural capitalist phenomenon, not some kind of devious scheme.
A natual phenonmenon, not owned by capitalists. As long as people put money in a central repository for safety, said repository will probably profit by making loans on more of it's assets than it actually hold.
It's a natural human phenonmenon to try to leverage one's assets to create more worth than the actual value. Ever see a carpenter, plumber or painter take on more work than they can handle? Same theory.
http://www.caseyresearch.com/gsd/sites/default/files/Presidents%20and%20Debt.jpg
Interesting statistic...
Interesting yes. Correct no. We have done this before and these numbers are not right. You really should try multiple sources versus a nice picture.
http://en.wikipedia.org/wiki/History_of_the_United_States_public_debt
It truly is amazing how far off course these threads get. This could have been a very enlightening thread if the topic was held and debated. It seems to me that this tread should have read "Should the US government start issuing debt free currency through the US Treasury, Or should the US government keep using debt laden money issued and valued by The Federal Reserve Banks? Now THAT would have been a great topic. Instead everyone drifts off to their candidate and blah blah blah, Jeferson and Hamilton, (neither one of whom is around to help us out of this mess). The truth of the matter is that this problem is much larger than most of us "average folks" understand. I mean Time magazine has named "The Protester" the person of the year? The Arab Spring, The OWS movement...has anybody noticed that this is all about money? This is a worldwide "change" in people that quite frankly scares the hell out of me. If we think that our current or next president is going to fix this mess then we're all dreaming. All this talk about "redistribution of wealth" is going to happen whether we want it to or not, and President Obama is going to have nothing to do with it. Redistribution of wealth has been going on for some time now, and most people are not happy with their share. If we don't put a laser focus on finance and financial institutions and the power that they wield not just here, but worldwide, we may not have another election to debate. Can you say President Bernanke or even better President Strauss-Khan?
mr2cool Mr2cool -- who gots the money in the redistribution? My reading says the rich gots more and the rest of us are sucking pond water.....from the bottom of the pond..... Seems to be a monied-myth that we are taking from the rich and having the poor live off the dole.
Debt-free money has even more problems that debt-money except for inflation. Plus, it really has not existed since the 1500's --- read above re: expansion and fractional banking.
Don't forget Madison and to get the blood going --- Jackson. And to keep it on Presidential point --- Nixon got one thing right re the gold standard.
Jerseydutchman2 ... Debt free money is printed, issued and valued by a "soveriegn nation" as it was laid out in the Constitution. There is a great responsibilty in so doing, and I do have my doubts about the abiltiy of the current US government to do this wisely, but it was done just this way prior to the issuance of Federal Reserve Notes. Federal Reserve Notes are "sold" if you will, by the Federal Reserve, to the US government and immediately have interest or debt attached to them.
Mistergoogle... I agree. Even the redistribution of wealth that we all fear ( you know the wicked old socialism that our president has been accused of pursuing) works the same way. The powerful get richer and the workers get less. Why did the Soviet Union collapse? Power and money, versus the people who have to work to provide the wealth for the powerful. Eventually, the people catch on and realize that this is a very bad deal.
gman, why do you always obfuscate everything? There is a difference between "public debt" and "national debt", yet you always seem to pick the one that suites your view.
Basically, the graphic is quite correct. Unless, of course, you choose to ignore intragovernment debt (which we discussed recently concerning all of the IOU's in the SS trust fund).
Nice try, but next time you should check YOUR facts...
Either way, don't dismiss the magnatude of the numbers just because they imply that your guy has been the worst of the bunch. It's the system, remember? I've only been saying it forever...
JIT,
Let's say for the sake of argument that the "debt added" figures in the statistic you presented are correct. If they are, then the presentation is still essentially false because presidents basically do not add the debt. The debt is added by the spending Congress requires, impacted by laws that have been on the books for years or decades, impacted further by tax rates passed in other years, impacted by how the economy is doing, over which a president has little control, etc, etc. And yes, affected by what a president requests, sure.
The stat you presented therefore deliberately misleads, and while it contains an element of truth, is still more false than true. And saying so has nothing to do whether this president is "our guy" or not. There is plenty of fair criticism that can be directed his way. This graphic just does not happen to be one of them.
JD2, I couldn't agree more.
All: Please ignore the presidential names on the graphic I posted earlier because the point isn't so much about the President at the time but rather the actual debt numbers.
Perhaps this will help (public debt only, misterg's numbers):
http://www.usgovernmentspending.com/spending_chart_1900_2016USb_H0t
Note the scale and the steepness of the curve. That is a systemic problem, not a Presidential one. Thanks JD2 for correcting me.
mr2c, I'll have to study up on Federal Reserve Notes, since my understanding of them is inadequate.
BTW, a year or two ago I actually received a "Silver Certificate" dollar bill at a store in change. Can't be too many of those in circulation anymore.
Actually the numbers in JITS chart are wrong. Period.
And saying I obfuscate, oh please. Let's keep it clean :>)
You are saying I choose two different numbers representing two different types of debt, one called public and one called national. Not true again, and I quote "The public debt is the same as the national debt and the deficit. All of these terms calculate the difference between the amount of money the government takes in each year in taxes and investments and the amount the government spends."
So who is obfuscating my friend? You need to define your confusion. Here's the rest of the definition including the intragovernmental holdings portion and explanation which probably has something to do with your definitional errors. http://money.howstuffworks.com/personal-finance/debt-management/debt4.htm
And like I have told you before, while the debt number in important, (and again I quote) "a better indicator of a nation's indebtedness is the ratio of its public debt to its GDP, or total national income. The U.S. public debt ratio in 2005 was calculated as 61.8 percent of the GDP. In the same year, the UK's ratio was 46.7 percent, France's was 76.1 percent and Japan's was an astonishing 173.1 percent [source: OECD]" I know you don't agree with that concept either --- but most others do and, IMHO, it appears to be true.
For more fun, try the column sorts on this Wiki page by debt, gdp and per capita. It's fun and can allow you to rationalize that we are OKdoky with our debt to GDP ratio. http://en.wikipedia.org/wiki/Government_debt
But we are not. Why? Not because of the absolute number. Because the debt trend (increase) is atrocious, especially over the last decade. And since the whole thing about debt is "credit worthiness," as our debt skyrockets and pushes against GDP, our "investors" get shakey about buying more debt or even continuing to hold the debt that have. A sell-off of debt is sort like a bank run, not good. Not good at all since it can actually cause a bank run leading to a total collapse.
So I agree wholeheartedly that we need to rein this in, pay some of it off, and get the ship heading in the right direction. Once again, this requires a balanced budget (for awhile not forever), entitlement re-engineering (to get those costs in line with what we can afford), tax code corrections (close the loopholes, have a rational deduction/credit plna, and fair rates for all brackets). But the point that Obama added more debt than all the other Presidents combined is bogus. You show us the math that magically has Obama beating all the other Presidents combined, an amazing fact when you consider the top 12-month debt/spending record is held by his predesessor.
Now -- that said --- remember that I said that our debt trajectory is out of control. Bush started the process with unnecessary wars, off-budget war/terrorism funding, and the largest spending spree ever. How Obama was supposed to turn a debt-addicted country fiscally around is anyone's guess. He couldn't stop the wars overnight. He had a country out-of-work, auto industry and other industries going belly up, financial system on the brink of world-wide collapse, housing market collapse evicting families onto the street and more. How in God's good name was he supposed to attack all this crap Bush handed him without dropping some dimes? So he continued raising the debt, anyone would have --- even Ron Paul, and yes, and now he too has spent too much. But not what you said, no way.
That said. What I see is an Obama that wants to curtail spending, re-engineer entititlements, but demands that some, the rich, help out through returning their tax rates to the previous rate before we starting spending like drunks on a binge for foreign wars, immoral financiers, and recession support. I do not see a tax and spend soicalist. And I see a Repulican Party whip sawed by Norquist and his pledge and the Tea Party helll bent towards "anything-but-obama" tactics basically stopping any and all ateempts at progress.
That's what I am talking about. So fuscate that.
Well, OK then misterg. I don't believe the numbers are wrong at all, but rather we seem to be comparing apples and oranges. It won't be until after the holidays until I can follow your links, but I will make the time.
As a quick point, your original link stated, as the definition of Public Debt, the following:
"Publicly held debt is the gross debt minus intra-governmental obligations (such as the money that the government owes to the two Social Security Trust Funds, the Old-Age, Survivors, and Disability Insurance program, and the Social Security Disability Insurance program)"
So it seems I too used the incorrect terms. According to your link, I should have said that Public Debt is not the same as Gross Public Debt. The graphic I posted is thus for "Gross" public debt.
Have a Merry Christmas and a happy New Year. Next year promises to be quite interesting...
misterg, I finally got some time to hunt down the gross debt numbers from the treasury:
http://www.treasurydirect.gov/NP/BPDLogin?application=np
If we use the end-of-year numbers just prior to the last three inaugurations (end of December) this is what we find:
Dec 2000: 5.7T
Dec 2004: 7.6T
Dec 2008: 10.7T
Dec 2011: 15.2 (three years of our current President)
So...
We began with 5.7T
Congress during the Bush years added 5T (EIGHT years)
Congress during the Obama years added 4.5T (THREE years)
Congressional estimates are for an additional 1.5T or so this year, so if we had to guesstimate we could say that the current term would end at about 6T
So...
You are correct, the graphic is wrong when attempting to tie the current President to our debts. It seems to me that the person putting the graphic together calculated *up to* Bush, left his numbers out, and compared the 2000 number to the estimated debt during the Obama administration. IOW, it compared YE2000 to Obamas term, leaving the Bush numbers out. Thanks for the nudge to look into it further.
Regardless my intention remains the same, which is to bring to light the rapidly increasing, exponential-curve-looking behavior of our Congress to light. The subject really deserves more attention than it gets.
And JD2, every year is interesting, wouldn't you think? My personal opinion is that this year will be a doozie in more ways than one.
You're right, of course, JIT. But a nice quiet year still would be very welcome!
Justintime.
Cool. They might have "pushed" some of the Bush onto Obama as well, I have seen that done before. Again, I think it best to also look at other aspects of debt versus just the number itself:
- how much you can afford (in the govt's case that's debt/gdp ratio)
- what you spend it on
- how much you will need to spend to pay it out
- what your future ability to pay off the debt
And while I think we could actually afford the debt, the fact that it has grown exponentially over the last decade COMBINED with what we got for the money COMPOUNDED by the interest charges COMPARED against our slow moving economy's abilty to provide extra gdp (taxes) to help pay off the interest, much less the debt iteself, paints a very, very dire picture.
Bad spending with little profitable return makes a tough pay back look even worse so wihile I think we could have afforded the debt, it certainly looks like a bad loan when you spend in on Iraq, Solyndra, and other boondoggles. Even when they might have spent it on a good thing, saving the finanical system for example, to allow that same system to profit via investment that did not provide a return to the lenders (us), perks, bonuses, etc. just looks like a really bad use of funds.
The conclusion is the value of our dollar which, given our helpful Tea Party wizards, has already take a ding via our rating downgrade and will take more if we can't prove that we have our act together.
So yes, enough is enough. Romney starts to look more interesting in light of all this. Have to say, I like his words re the middle class (not sure I believe them), don't like his "end Obamacare" crap seeing as its Romney care (but again, not sure I believe him). Seems like a Bush Sr. which, IMHO, history will continually upgrade his status as President over time.
Commenting is no longer available.