How to erase the national debt[W:1040]

[joG]

You worked so hard at making it simple, that I found it difficult!

I hate analogies!

(not yours in particular, but analogies in general)

This is especially true, when the parable stops before the going gets tough.

 

[Chomsky]

This is especially true, when the parable stops before the going gets tough.

Yes.

Analogies are complicated, and never truly accurate; they also are easily used to present information in a biased or partisan manner.

It's much better to learn concepts accurately and using the correct nomenclature, even if it takes a little effort! Far better than sounding like an idiot!

 

[Moderate Right]

Greece is not monetarily sovereign, so they cannot create their own money. They are analogous to a U.S. state. And Argentina had a lot of foreign debt, and you can't just create foreign currency. So those two are poor points of comparison. As was your own checking account.

A better analogy might be if you had an apple orchard and it produced an infinite amount of apples; the apples don't cost you anything, but it would be unwise to eat too many. It would also be unwise (for the economy in general) to attempt to sell an infinite number of apples. But could people (and the economy) benefit from some increase in the number of apples you sell? They very likely could.

A nation's economic strength is in their ability to produce - factories, knowledge, labor, materials, energy, etc. If you have these resources (especially labor) sitting idle for lack of demand, then your economy isn't functioning as well as it could be. If you could spur more production with some of your infinite supply of apples, you could create jobs in the process, at no real cost. Sure, there would be more apples in the economy, but there would also be more people working, and more production. So you have to balance the (obviously) good (more jobs, more production) against the (possibly?) bad - whatever negative effects more apples might have on the economy.

So, you're saying that there are money trees.

 

[Moderate Right]

We do have the ability to create dollars at no cost, and in any number we please. It does not affect retirees or anybody else. Are you paying off the debt from WWII? Me neither.



When you move some money from checking to savings, does that make you a creditor of your bank? Are they now at your mercy?

When China earns American dollars and saves them, nobody has a problem with that. But when they exchange those dollars for bonds, suddenly everybody is wetting their pants, because they (incorrectly) think that China is floating us a loan, and we can't find the money anywhere else. It's a ridiculous notion when you simply consider that we (like any nation sovereign in its own currency) can simply create more of that currency. Bonds are an anachronism, no longer necessary. Moving to fiat from gold changed the whole game.

A short while back, Russia dumped a bunch of U.S. debt over a short period of time. Did you even notice?

There is a cost to creating money. Nothing is free in this world. This is a concept that liberals just can't seem to grasp. We should be paying off the national debt, even if only small amounts of principal, and I'm not talking about paying off one million in debt while we charge one hundred million more.

 

[Fenton]

Greece is not monetarily sovereign, so they cannot create their own money. They are analogous to a U.S. state. And Argentina had a lot of foreign debt, and you can't just create foreign currency. So those two are poor points of comparison. As was your own checking account.

A better analogy might be if you had an apple orchard and it produced an infinite amount of apples; the apples don't cost you anything, but it would be unwise to eat too many. It would also be unwise (for the economy in general) to attempt to sell an infinite number of apples. But could people (and the economy) benefit from some increase in the number of apples you sell? They very likely could.

A nation's economic strength is in their ability to produce - factories, knowledge, labor, materials, energy, etc. If you have these resources (especially labor) sitting idle for lack of demand, then your economy isn't functioning as well as it could be. If you could spur more production with some of your infinite supply of apples, you could create jobs in the process, at no real cost. Sure, there would be more apples in the economy, but there would also be more people working, and more production. So you have to balance the (obviously) good (more jobs, more production) against the (possibly?) bad - whatever negative effects more apples might have on the economy.

Greece didn't have a sovereign currency but the EU did.

So why didn't the ECB just print away all of Greece's debt ?

 

[Moderate Right]

Greece didn't have a sovereign currency but the EU did.

So why didn't the ECB just print away all of Greece's debt ?

He's never been able to answer that and, you are right. He will answer with the same old smoke screen mumbo jumbo of how Greece is different, Europe is different and he will leave it at that. Somewhere in Europe there are money trees and Europe could have picked as much money off of those trees they wanted and gotten rid of Greece's debt problems but, in the end, even the diehard liberals of Greece realized that money doesn't grow on trees after all.

 

[JP Hochbaum]

You're wrong almost at the very beginning. A monetarily sovereign government CANNOT do this FOREVER. There you go again saying this and then when MMT'rs are confronted all of sudden they say, "We didn't say it could be done forever." I guess you did say it after all.

I am describing ability. And yes it can do that forever..... Not suggesting it should, but it CAN.

 

[JP Hochbaum]

I assume your point is that the national debt is nothing to be concerned about? Greece and Argentina did not seem to do so well creating debt. I guess I can write all the checks from my checking account that I want ("I can't be out of money, I still have checks left."), but, it seems that once my savings account is empty and I have bills to pay, someone is going to have to take care of this or I will have to declare bankruptcy and default on my creditors. The car breaks down..no problem...go out and get a 24% payday loan to fix it. It doesn't seem to me that this can go on very long. Perhaps the personal analogy is imprecise? A sovereign nation that can print money behaves differently but eventually the chickens come home to roost (see Greece and Argentina). I am just the "average person" and welcome your clearing this up for me.

Greece and Argentina were both not monetarily sovereign. Greece is like a state being part of the Euro and Argentina has a currency peg.

 

[JP Hochbaum]

You only left out, what happens, when a economic or societal shock hits and credit suddenly drys up.

I left that out because we aren't living through that now.

 

[JP Hochbaum]

He's never been able to answer that and, you are right. He will answer with the same old smoke screen mumbo jumbo of how Greece is different, Europe is different and he will leave it at that. Somewhere in Europe there are money trees and Europe could have picked as much money off of those trees they wanted and gotten rid of Greece's debt problems but, in the end, even the diehard liberals of Greece realized that money doesn't grow on trees after all.

The easy answer to Fenton's questions is: Germany. Other answers are thousands of economists taught on a gold standard way of thinking.

 

[Exquisitor]

He's never been able to answer that and, you are right. He will answer with the same old smoke screen mumbo jumbo of how Greece is different, Europe is different and he will leave it at that. Somewhere in Europe there are money trees and Europe could have picked as much money off of those trees they wanted and gotten rid of Greece's debt problems but, in the end, even the diehard liberals of Greece realized that money doesn't grow on trees after all.

Actually, in the dimensional universe when you spend money you not only do this in your dimension but you spend that money again and again in a dimensional universe. If you spend that money in the Name of the Lord Jesus Christ; He spends it dimensionally.

This is where growth comes from.

Money is constantly flitting between the dimensions.

 

[Mycroft]

There is a cost to creating money. Nothing is free in this world. This is a concept that liberals just can't seem to grasp.

And...

When confronted with the cost, they either blame it on someone else, spin away their responsibility for that cost or ignore the cost and hope their usefull idiots won't notice it.

 

[joG]

I left that out because we aren't living through that now.

True. We are preparing it instead of preventing it.

 

[JP Hochbaum]

True. We are preparing it instead of preventing it.

People have been saying that about CHina for 40 years now and Japan for over 20.... Seems like the sky is falling crowd has been wrong for 60 years in total now.

 

[Exquisitor]

And...

When confronted with the cost, they either blame it on someone else, spin away their responsibility for that cost or ignore the cost and hope their usefull idiots won't notice it.

You have to work for your money. That is the Law; but there is free money; prizes, gifts, charity, luck, inheritance, disability.

 

[Moderate Right]

I left that out because we aren't living through that now.

But it sneaks up on you. It doesn't usually send you advance notice. GW Bush woke up one morning to discover that the sky was falling down and it was too late to stop it. Ditto the Great Depression. All we could do was mitigate the damage. This is what you MMT'rs don't understand. MMT would work just fine until something happens and by that time it's too late to realize that you effed up horribly.

 

[Moderate Right]

And...

When confronted with the cost, they either blame it on someone else, spin away their responsibility for that cost or ignore the cost and hope their usefull idiots won't notice it.

I think it was GWB's fault. Sometimes it goes back to Reagan. Sometimes it goes farther back than that. Democrats leave huge messes for the Republicans and then when the Republicans are in office the Democrats blame it on the Republicans.

 

[joG]

People have been saying that about CHina for 40 years now and Japan for over 20.... Seems like the sky is falling crowd has been wrong for 60 years in total now.

I hadn't seen that exact argument for China. They were growing fast and misallocations were relatively easily compensated by the exports. In Japan the situation was similarly very different from ours. But you know that. Throwing up a smoke screen is silly.

 

[Absentglare]

There is a cost to creating money. Nothing is free in this world. This is a concept that liberals just can't seem to grasp. We should be paying off the national debt, even if only small amounts of principal, and I'm not talking about paying off one million in debt while we charge one hundred million more.

Nobody claimed that there is no cost from creating money.

What they are arguing is that there is an ability to create money. Further, what money we do create can be used in a way such that the benefits far outweigh the costs.

And no, the way we reduce the debt is by growing the economy, not by bankrupting our private sector.

I think it was GWB's fault. Sometimes it goes back to Reagan. Sometimes it goes farther back than that. Democrats leave huge messes for the Republicans and then when the Republicans are in office the Democrats blame it on the Republicans.

What the **** ??

You can't be serious. You think President Bush 2 gave President Obama less of a mess than what he inherited from President Clinton ?!?

Do any of your statements have even a remote attachment to reality ??

 

[Mycroft]

You have to work for your money. That is the Law; but there is free money; prizes, gifts, charity, luck, inheritance, disability.

Sorry...but you are wrong.

All those examples of "free money" are not free. Somebody worked for those things...somebody pays for those things.

There Ain't No Such Thing As A Free Lunch (not even for the federal government)

 

[Mycroft]

Nobody claimed that there is no cost from creating money.

What they are arguing is that there is an ability to create money. Further, what money we do create can be used in a way such that the benefits far outweigh the costs.

And no, the way we reduce the debt is by growing the economy, not by bankrupting our private sector.



What the **** ??

You can't be serious. You think President Bush 2 gave President Obama less of a mess than what he inherited from President Clinton ?!?

Do any of your statements have even a remote attachment to reality ??

I know this will likely ignite an indignant storm of outrage from you and other liberals that'll probably send this thread wildly off-topic, but my comment is only meant as a response to your idiotic statement: "You think President Bush 2 gave President Obama less of a mess than what he inherited from President Clinton ?!?"

Bush didn't give anything to Obama...let alone a "mess". It was Obama's own Democrat allies who gave him that mess. Bush actually tried...and failed...to minimize the mess before the bubble burst, but was opposed by Congressional Democrats.

 

[Absentglare]

I know this will likely ignite an indignant storm of outrage from you and other liberals that'll probably send this thread wildly off-topic, but my comment is only meant as a response to your idiotic statement: "You think President Bush 2 gave President Obama less of a mess than what he inherited from President Clinton ?!?"

Bush didn't give anything to Obama...let alone a "mess". It was Obama's own Democrat allies who gave him that mess. Bush actually tried...and failed...to minimize the mess before the bubble burst, but was opposed by Congressional Democrats.

Right, even when the republicans are in power and enact republican plans that become unmitigated disasters, you still believe it was the democrats fault.

And you don't see anything wrong with that ?

 

[Mycroft]

Right, even when the republicans are in power and enact republican plans that become unmitigated disasters, you still believe it was the democrats fault.

And you don't see anything wrong with that ?

Republicans didn't cause the bubble.

 

[Moderate Right]

Nobody claimed that there is no cost from creating money.

What they are arguing is that there is an ability to create money. Further, what money we do create can be used in a way such that the benefits far outweigh the costs.

And no, the way we reduce the debt is by growing the economy, not by bankrupting our private sector.



What the **** ??

You can't be serious. You think President Bush 2 gave President Obama less of a mess than what he inherited from President Clinton ?!?

Do any of your statements have even a remote attachment to reality ??

Your MMT buddy John said this in post #24 "We do have the ability to create dollars at no cost". I'm glad you disagree with him.

 

[JohnfrmClevelan]

There is a cost to creating money. Nothing is free in this world. This is a concept that liberals just can't seem to grasp. We should be paying off the national debt, even if only small amounts of principal, and I'm not talking about paying off one million in debt while we charge one hundred million more.

Then tell us what the cost is.