How do you propose we pay off the 18 trillion dollar debt cloud hanging over the US?

Nobody cares about banks that borrow from the fed and can't pay their loans off. The problem is that the government shouldn't be in debt.

People want to say that because the federal reserve is there, then we can just keep running a debt, and debt doesn't matter. Yeah okay, I get that. But why doesn't that mean we can do away with the IRS? Just keep borrowing money from the fed and nobody pays a penny in federal taxes? Hell, why not let states do the same?

Yeah... the reason you don't do that is because debt really does matter.

 

The Government legally cannot borrow money from the Fed. And govt debt is a private sector asset. Pretty much you want to destroy the economy because you think the government is like a human. No thanks.

 

So does debt matter? Does it hurt the federal government to be in debt? Does it hurt states, municipalities, people?

Does debt matter?

If so, then ignore the federal reserve system which is debt based, and deal with the reality of debt mattering.

 

Debt matters if you aren't the federal government because of laws that make it matter.

Debt matters to you and I because we are revenue constrained. Does not matter to the federal government who is not.

Debt doesn't matter for a currency issuing nation. Never has, never will. Inflation matters and productivity matters. But debt, not so much.

 

So get rid of taxes.

You're cool with that, right? Of course you are! Debt doesn't matter to the federal government, so it should be cool all the way down the line.

Why should I pay my debts off? I forget.

 

I'm not a tax increase man. I think we should lower taxes across the board. The one and only problem we have to deal with is inflation. Taxes provide a good inflationary buffer to offset spending.

The government always pays off it's lenders. Not sure what point you are making. You simply have no clue how our monetary system works. Way above your level.

 

Does this imply the novel idea of Canadians paying off the US national debt? I'd never considered that possibility.

 

You said that debt doesn't matter to the federal government, so why do we pay taxes?

It's a simple question, and not a point. You made the point, and I'm just trying to figure out why I pay taxes.

 

I think you may have me confused with another poster. I've not been arguing that we need to pay off our current debt.

 

Do what the liberals do. Raise taxes to pay off the debt.
Tax the federal reserve billions a year till its paid off. Problem solved. Your welcome

 

You're right, I do think there are limits, and I think the fact that there are no successful countries with Debt to GDP ratios of 300, 400, or a 1000% seem to confirm that. I don't mind you running the experiment in another country, but you are making claims that don't seem to be backed up in the real world. It's mind boggling that people can fool themselves into these kind of fantasies, but here you are.

 

I nominate you as FED chairman under Hillary's administration! She's going to need someone who believes in infinite money to pay off her wish list.

 

We're never going to pay off the debt. We'll keep going at full speed until it all comes crashing down. In about 200 years, we'll be living in a Mad Max world.

Actually, we'll all be gone. So it doesn't matter.

 

You're making logical fallacy after logical fallacy. Now you are talking about debt to GDP ratios. All I've said is that paying interest payments will never be a problem because we can always afford to pay our own made up debt denominated in our own made up currency. Interest on the national debt is the least of our concerns. And the funny thing is I'm not asking the US to experiment in anything, I'm asking them to do what they did for the century before Obama came in to office. You're just afraid of large numbers. A fear you lose when you become educated. One day the national debt will be $1 quadrillion and people will still be talking about the end of the world just like they were when it was $40 billion. It's mind boggling how people can't understand why others have been wrong for ages.

 

We pay taxes for multiple reasons. Mostly human induced reasons that do not matter. The government does not need taxes to spend money. Your taxes simply just get debited out of the system and sit on some balance sheet. The Government doesn't use those taxes for anything. They reconcile their balance sheets to make sure they balance, but that is usually after the fact.

However, the real benefit to taxation is to prevent inflation and limit savings assets (aka treasuries) from flooding the market.

But that's the benefit for people who understand the monetary system. The government and federal reserve will push the idea that your tax dollars are useful to the government. I know it hurts conservatives to learn that their tax dollars mean nothing. But as a tax payer myself, I couldn't care less... an efficient economy gives me everything I need in life.

 

The national debt can be a quadrillion as long as the economy has grown to to match it, but your argument seems to be that it doesn't matter. Do you think a quadrillion dollars in debt would be sustainable and the debt serviceable with the our current 18 trillion dollar US economy?

 

Straw man. You haven't changed a bit. I said nothing about the Federal Reserve to purchase Treasury's from the government.

Quit dodging.

Being able to pay is a moot point if it wrecks your economy with runaway inflation.

Prove I ever thought they don't make money out of thin air as you claimed.

Caught you in another whopper. SSDD.

 

The Federal reserve already pays 100% of its "profit" to the US Govt. You're welcome.

 

I could never be a problem as long as you don't think runaway inflation is a problem.

- - - Updated - - -

We don't even need to do that, though I don't oppose the idea.

We need to get the deficit down where it is lower than the growth in the economy, at which point the debt will fall relative to GDP.

Yes, it's a problem of will.

 

Are you hoping the private sector will dive deeper into debt to fill the void? Because if not, I think your prescription would cause a economic collapse in the U.S., at least at this time.

For some dumb reason people, businesses or governments around the world want more dollars. In order to create those dollars to satisfy foreign demand we have to create more debt. If you don't satisfy that demand with more debt – at levels greater than GDP – you will end up with a shrinking domestic money supply. Assets will fall in value (in terms of dollars) and you will trigger an avalanche of bankruptcies.

It is mind boggling that this is happening right now, even with all the freshly created government debt and deficits … it is like we literally cannot create debt fast enough even with interest rates near zero. Of course, I am of the opinion that this foreign demand will eventually subside and reverse, at which point things are going to get a bit ugly.

 

No.

Economic collapse is hyperbole IMO, but I wasn't suggesting massive (more) austerity at this time.

We have more than enough Govt debt to support money policy for the foreseeable future. We don't need to create more debt for that.

We create more than enough debt. The problem is that government would rather pander to voters than do the difficult increasing of taxes and limiting spending to do it.

 

Why is this even an issue? Let your kids and grand kids worry about the debt! Chances are it won't be an issue for me, why in the blue Hades should I care?

 

You are putting words in my mouth again. No where did I mention anything about where the economy would be. I simply have stated that we can pay our interest payments no matter how much they are. Now you are just throwing whatever you can out there to try to defend your failed position. I have never said there are not consequences to spending, I simply said we do not have a limit in to how much we can spend, so whether or not we can afford interest payments will never be an issue.

- - - Updated - - -

Your grandparents said the same thing about you and my great grandparents said the same thing about me. Your grandkids will say the same thing about their future grandkids. It just never stops with you guys, lol.

 

Now you are just blatantly lying...

"That's exactly what you are talking about. The Fed buying up Govt treasuries so the Govt can fund deficits.

How exactly does the Govt have access to an infinite amount of money by borrowing without the Fed purchasing it?"

The Fed does not purchase anything from the government. The fact you are confusing the secondary market with "funding" the government is not a surprise.

Never said anything otherwise. Just said we can pay off whatever interest payments we need to. If we choose not to pay our debt that is a different issue.

Lmao!!! So now you are claiming they do. That's classic. We went thread after thread with you claiming that banks don't make money out of thin air. It was quite ridiculous. Dr. Righteous was there supporting you the whole way. Great guy to have on your side, lol.

 

You're just back peddling now as always. Your go to move. I never said anything about problems with spending too much. I simply said we can afford any interest payments we have. It's just hilarious arguing with you because I'm saying some very simple stuff. There is not even a possible logical argument against it. We can afford whatever interest payments are on debt denominated in our own currency. Whether or not paying it causes problems in the economy is irrelevant to this discussion. You just wanted to argue and ended up embarrassing yourself as always.