What is the most import aspect of money?

if the liberal has evidence of that I will pay him $10,000. Bet?

 

for 4th time: a balanced budget makes a deficit illegal and that in turn makes long term debt illegal. Do I need to explain it yet again for the 5th time?

 

this one I have explained to you 7 times now. Newts Balanced Budget Amendment( Newt is a Republican) passed in the House and fell one vote short in Senate. Do you know which Party was against it in both House and Senate? Do you know what the debt would be today if Democrats had not killed any one of 30 Republican BBA?s

 

as I said 8 times now it did not disappear for Newt's Republicans and is always there in Republican circles when there is enough support for it. GOt it now?

 

absurd of course if there was enough support for a BBA Republicans and Demcocrats would have to pass it or lose their jobs but what support there is for responsible govt is 100% Republican.

 

Republicans are generally free market capitalists and Democrats lib commie socialists so what opposition there was to libcommie interference in the housing market came from Republicans.

Sorry to rock your world:


Barney Frank: "I hope by next year we'll have abolished Fanny Freddie... it was a great mistake to push lower income people into homes they couldn't afford and couldn't really handle once they had it"


In a message dated 7/19/2014 4:07:00 P.M. Eastern Daylight Time, Bje1000@aol.com writes:



In a message dated 7/19/2014 4:00:50 P.M. Eastern Daylight Time, Bje1000@aol.com writes:

"These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."-Barney Frank


Rep. Maxine Waters (D., Calif.), speaking to Housing and Urban Development Secretary Mel Martinez:

Secretary Martinez, if it ain't broke, why do you want to fix it? Have the GSEs [government-sponsored enterprises] ever missed their housing goals?

* * *
House Financial Services Committee hearing, Sept. 25, 2003:

Rep. Frank: I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . .

* * *
House Financial Services Committee hearing, Sept. 25, 2003:

Rep. Gregory Meeks, (D., N.Y.): . . . I am just pissed off at Ofheo [Office of Federal Housing Enterprise Oversight] because if it wasn't for you I don't think that we would be here in the first place.



What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.

Different World

If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed.

But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.

 

soviet businesses do not regulate themselves well but capitalist businesses do regulate themselves well. Do you understand this point?

 

hardly a claim, rather a fact. Guess where business was more deregulated East or West Germany? LIttle Havana in FLorida or Havana in Cuba? Do you understand now?

 

you missed the point, if the reserves are transferred from one bank to another total reserves stay the same thus so does lending when you look at the entire transaction.

 

again you missed the point 100%. When the Fed bought securities(QE) to create money they knew the money would by law be held as reserves and not lent to public. Banks don't lend reserves as a general principle.

 

I remember having this conversation with you before and since that conversation, I had another very similar conversation where I address what reserves are. I saved it should you an I broach the subject again.

Apologies for the length, but when talking reserves and the function they serve we have to be thourough.
***********************************

Ah, reserves! Created by the Fed to manipulate the money supply. They're just cash, right? Uhm, no.

The name is perhaps a major source of confusion because a reserve is conceived of as some sort of backup plan, something set aside in case of an emergency.

In accounting, a reserve is an acknowledgment of a contingent liability designed to prevent us from being caught short if that liability arises.

Reserve balances "on deposit at the Fed" don't serve any of those functions: none of them.

If your bank fails, its depositors will never see a dime of "reserves". If a bank gets into trouble, it cannot withdraw "reserves" to pay creditors. A bank cannot lend "reserves" to customers, or purchase Wall Street assets with them.

What we oddly call reserves (in this context) are what is called, in most countries, "settlement funds".

All central banks provide or oversee the interbank payments system in their country, which is the system that transfers deposit liabilities from one bank to another when customers write checks or use their ATM cards.

We all use double-entry bookkeeping, so the method for clearing payments between banks is essentially the same in all modern economies.

If there are two banks in a system, each of which cashes checks from the other, then each transaction creates an obligation by one bank to pay the other. If we were very inefficient, we could send a courier from one bank to the other every time a check was deposited, to return the check to the bank on which it was drawn, and to return with a sack of cash in the amount of the check.

If we're thinking a little more efficiently, we can agree to send one courier at the end of each day, with all the checks accepted that day, and we can total up the checks deposited by each bank in the accounts of the other, then compare the totals. We will subtract the smaller amount of checks from the larger, and whichever bank had cashed the smaller amount of checks would owe one "net" amount of money to the other bank. That “deficit” bank can send a courier with a small sack of cash to settle the net amount - even though we may have cashed millions of dollars' worth of each other's checks that day, the net amount owed by the deficit bank to the “surplus” bank might be very, very small.

Now if we're being even MORE efficient, we can agree that each of us would open a checking account at the other's bank - so one bank opens a checking account in the other, and vice versa - rather than having to send our courier with the sack with the net amount of cash every day, we just have the deficit bank create a deposit for the net in the account of the surplus bank. At the end of the next day, if yesterday’s deficit bank is now the surplus bank, it can just reduce the “funds” the other bank has “on deposit” with it. If that bank’s surplus is greater than the balance in the deficit bank’s account, the new deficit bank can simply create a balance in the surplus bank’s account to make things add up.

Notice that each of these banks now has funds “on deposit” with the other bank, but neither bank has actually made a deposit in the other bank. The deficit bank simply creates a deposit “out of thin air!” for the surplus bank as a method to keep score between them.

We are now using these two checking accounts to settle our affairs every day, so no money is actually changing hands between us at all unless one of us becomes so severely deficit to the other that we agree we probably ought to settle the net in cash. But in the main, neither of us ever expects to withdraw those settlement funds so that we can lend them to anyone, or to do anything else with them. They are simply there as a scorekeeping mechanism so that we can process each others' payments. That’s pretty efficient.

Of course, there are always more than two banks, so all banks have to do this with all other banks if they are going to all be able to accept each others’ checks. We could do this - have every bank create an account with every other bank for the purposes of settlement. That's certainly better than having bicycle couriers transferring stacks of checks and sacks of cash every day, but we can still see more obvious efficiencies to be had.

What if we created a banker's bank, and ALL of us opened an account with that bank? Then, rather than each bank having to have an account with every other bank in order to settle payments, it would only need ONE account, with the "central" bank.

Well, this is great! Now what we do is hire a bookkeeper (call him a clearinghouse), and we report every day to him with the number of checks we have received in deposit from accounts drawn on other banks.

We don't even care WHICH banks those checks are drawn on. As long as every bank honestly reports the total value of all checks it has cashed (which they have an incentive to do - they wouldn't under-report, because they would short themselves, and they wouldn't over-report, because they have to provide the cancelled checks as evidence), then all we have to do is report ONE net number for all our checking transactions. We can tell the clearinghouse how many checks we accepted from all other banks today, and we can tell them how many of our canceled checks we received from all other banks, and - voila! We know instantly what we owe to "all other banks" or what "all other banks" owe to us. It’s just one net number, and it’s a lot smaller than the number of transactions we processed throughout the day.

Once the clearinghouse has a tally of every bank's net, it simply hands the list to the central bank, which begins the merry work of either reducing or increasing the settlement fund account balance of every bank in the system by the amount reported by the clearinghouse. The central bank doesn’t care who owes what to whom. All they care about is the net amount. They aren’t “transferring” a balance from bank “A” to bank “B”, they’re just going down the clearinghouse list and creating one transaction for each bank. Every surplus bank is going to receive settlement funds (or *ahem* “reserves”), and every deficit bank is going to lose them. No money is getting transferred. The central bank is simply creating or reducing deposit balances by following the list the clearinghouse provides – one lump sum addition or subtraction to each bank’s balance. The net result is exactly the same as if every bank had sent a courier with cash every time another bank accepted the deposit of one of their checks. It’s just a LOT more efficient.

There's no reason for any bank, under normal clearing, to exchange anything like cash. Now we can see that what we have done is set up a completely different system of money which has very little to do with the bank deposits of all of those bank customers. Settlement funds aren’t being used to protect depositors, or to pay them, or to make loans. We are only keeping score of the net effect of all transactions between banks. What we're really doing here is creating a sort of "mirror" at the central bank of what's going on at our actual banks. It's essentially a complete, duplicate model of our banking system - like one of those WWII strategy boards, where admirals smoking cigars have lackeys push wooden ship models around a plexiglass sea to keep track of the action in the real theater.

Our system of settlements is the plexiglass sea, and reserves are the wooden ships we push around to keep track of which banks are on the attack, and which are hunkering down for a long night of defense.

This is what reserves are. You can't put wooden ship models into battle, nor can banks lend reserves. They exist to aid in score keeping so that we can create and reduce scores as needed to keep track of what's going on without actually having to send couriers to every bank with sacks of checks and cash.

 

Just like the repeal of Obamacare, Republicans, since they took control of the House in 2011, have voted 54 times to undo, revamp or tweak the law. Yet, when they get total control of the government not only can they not repeal it, we learn they never had a plan, which means they voted ONLY when they knew it wouldn't pass. I suspect the BBA is much the same. At least some Republicans are aware how damaging the BBA would be, but they also know what their constituents expect, so they gain political capital. It's the same thing with BBA.

 

AMERICA'S AWFUL INCOME INEQUALITY

Yes, typical Replicant refrain ... no need to regulate. They remain incessantly blind to what caused the SubPrime Mess and then sparked the Great Recession.

Because it doesn't suit them to look at the facts. From Pew Research,
U.S. income inequality, on rise for decades, is now highest since 1928 - excerpt:
America's acute Income Disparity is unacceptable:

All that matters is the muney, muney, muney; and the more of it you have the more happy you should be. The Great Recession was the direct consequence of Bankster Fraud.

Wakey, wakey, everybody - it aint happenin dat way...

 

Me neither. There are a great many sucking off the Treasury's teat, and almost half of them aren't in the US.

Treasury Notes ownership infographic:


Note also that damn few corporations hold TN's. I wonder why ...

 

Sure. Tell us how it makes a long term debt "illegal."

 

Please link to the evidence of the Republicans efforts "to make federal government debt illegal" as you claim.

It will be interesting to see how many times they did this while there was a Republican in office.

 

A balanced budget mandate is a bad idea, and the Republicans have usually loaded their proposals with provisions requiring super majorities to increase taxes, as protecting the m/billionaire class is always their number one priority.

Imagine how much lower the debt would be if Bush and the Republlcans hadn't squander the golden opportunity of a surplus budget Clinton left.

 

What partisan nonsense. Check what has happened to the budget since Reagan exploded it under each president.

 

Hmmm. Please provide the link to the source of that quote.

Let's see how solid your "rock" is.

 

I know you know this, but James will make lots of claims, a few might be sourced, but most will not. My personal favorites are:

1) That helping the poor "interferes with evolution and the advancement of the species". -Source

2) And that "violent liberals don't need to steal from the rich at gunpoint" "since the rich give most of their wealth to charity". -Source

 

LafayetteBis, your post appears to quote me when it is actually a quote of Econ4Every1's post.

 

totally wrong of course!! It was in all the papers all the time. When they voted against it the nation was against it. After Trump got elected the nation then got scared about losing the welfare health care, and then the polls turned and so did the Republican politicians. Do you get it now? Most importantly, what support there is for freedom capitalism and the American way is within the Republican Party.

 

helping the poor is good, crippling welfare over successive generations creating liberal ghettos more dangerous than Iraq, where evolution is, in effect, reversed, is very very bad. Now do you follow?

 

And this is not to mention that when libcommies violently steal money at gunpoint they use the money to cripple human beings and create liberal ghetto cultures whereas when money is freely given to charity by intelligent successful people it is used productively to help people!!

The Giving Pledge is a campaign to encourage wealthy people to contribute a majority of their wealth to philanthropic causes. As of 2017, the pledge has 158 signers, either individuals or couples; some of the 158 signers have since died. Most of the signers of the pledge are billionaires, and their pledges total to over $365 billion.

 

Are you really suggesting that your liberal judgement is indicating to you that the quote is made up????????????