what is more important: reducing debt or stimulating the economy

No, I'm not. attention to detail, Erik. Even if it's barely noticeable, there's a difference between "would have" and "is".

You're entire point is that we will never ever ever have to worry about bankruptcy *because* we control our money supply. How are you failing to make the connection?

 

That is correct. We will never ever ever have to worry about bankruptcy as long as we are a monetarily sovereign nation in a fiat currency system, yes.

 

Assuming the Fed is willing to create money and buy the debt.

So sure. We could spend infinitely and pay for it by creating money and have infinite inflation.

But most folks would say that is not a viable alternative.

 

Now you're following the point. We, theoretically, would never ever be *forced* into bankruptcy (which is not the same as never having to worry about it). However, as I've said, the measures available to avoid bankruptcy after acquiring a great deal of debt are essentially equivalent to actual bankruptcy.

 

That doesn't tell the whole story. Why is our inflation so low currently?

Inflation is controlled by other things, like global market demand and resources. They control the price of goods. The fed prints money because of inflation, not the other way around. Taxes and interest rates are used by the fed to tame print-based inflation. Our current economy is not having that issue currently. Nothing close to it.

 

They essentially are not. Our debt "crisis" doesn't exist. We are currently 37th in the world in debt burden as a % of GDP, behind major powers of Japan and the UK, and the entire Europeon Union. Our debt "crisis" is a farce perpetuated by conservative media. The United States does not have a debt or spending problem. I encourage you to go find some credible sources to illustrate that we are on the verge of collapse due to debt. You won't find any facts to support it. You will only find political fear mongering with no credible sources.

 

Why not?

Banks aren't lending and money velocity is low.

Inflation is a function of the effective money supply. Inject enough money into the supply and you will have inflation. Create an infinite amount of money and you will have infinite inflation.

 

:/

You keep using current state of affairs to deflect points about the future. You're trying to refute "could"s and "would"s with "are"s. That doesn't work .

 

Depends on whether or not you believe stimulating the economy WILL reduce the debt. I can't see how contracting the economy can possibly reduce the debt anymore, but Republicans continue to cling to that notion.

Don't worry about the debt. The only thing the world is concerned with is whether that debt is growing or shrinking. Obie has cut the deficit in half and in a few years that will translate into being able to pay down on the debt. That is, unless we get another Bush-type president who is dead set against paying down the debt and would rather hand out tax breaks with his new-found surplus.

 

We are still only collecting 16.6% of GDP in revenues, down from 19.7% in 2000. That represents a difference of about $1/2 trillion per year in revenues. It will not be possible to get to debt repayment without increasing revenues, unless we continue relative spending cuts.

 

Fair enough. X-ing out the Bush tax cuts would be an appropriate start. I'd be opposed to any more spending cuts unless we're just talking about waste spending. Wouldn't you love to be on that committee?

 

very true, with stock money goes poof never to be seen again as it only has value if people believe it has value

 

I have no interest in the 'penny' plan but just responding to your post here that 1 penny out of each dollar is 1%. Whether it be people, or business, or government, all of them can reduce their spending by 1% without catastrophic consequences. All of them can do this for 6 years without catastrophic consequences. So if there was a coherent plan using a 1% reduction in expenditures, and if government or people won't buy into it, then it's obviously political and self-serving BS. Bottom line is there is no plan to reduce the federal government budget, there are continued deficit spending, and continued debt growth for a minimum of the next ten years. Conversely, if Americans refuse to pay 1% higher in federal taxation, this also is political and self-serving BS...

 

And again, more evasion. Look, you've said that we don't need to worry about our debt because we control our own currency, but when others have pointed out the problems inherent in the tools given for 'fixing' a bad debt when you control your own currency, you continually try to switch to the current state of our debt. If you refuse to address points made then you're not going to learn anything from the dialogue, and any further dialogue on this matter is futile. This is what I was talking about - there's nothing wrong with disputing or ceding a point, but if you can't discuss it beyond a limited talking point you're not going to grow.

Not really. The problem is that the stimulus creates a short-term expansion of economic activity (<--note: the effects are not long-lasting) while creating a long-term drain on the budget. That simple.

 

Depends on the stimulus. But I don't necessarily agree with your short-term/long-term analysis. Short-term expansions can keep recycling themselves.

 

That is the whole idea. You don't want to be creating full time government positions. You want temporary job creation to reduce the damage of the effect of the recession and give the economy a boost until the private sector has recovered.

 

Regarding the bold, what most Americans ignore, is any concept of paying back the deficit spending...this is why many believe economic activity is boosted forever. But if those same greedy and self-serving Americans were forced to create a pay-back plan, they would see the potential gains were only temporary. Ask any gung-ho American today how they feel about paying back all the deficit spending over the past 5-6 years and they will vomit on your shirt then shoot you then go after your family members! So here we are in 2013 with approximately $5-6 trillion in recent deficit spending, much of it has created a false economy and false stock market, and many Americans think this is progress...

 

They don't recycle themselves. The false or temporary economy stops the minute the stimulus dollars stop flowing. The reason for a stimulus is to provide some 'time' in order for the private economy to recover. If the private economy does not comply with society demands, then the government will continue various forms of stimulus, some covert, some overt, to pacify the whining masses and politics...

 

Of course they recycle themselves. They are still recycling themselves almost 70 years later from the WWII stimulus.

 

So reducing spending spending by 1% is to much to ask?

Thank good the majority of the American people are not that stupid.

 

The Core is the one that usually gets quoted...

By the way why do you think world oil demand is down?

 

I'm not evading anything. My point has been "fixing the debt" is irrelevant. The economy needs to be stimulated and the debt burden will take care of itself. Some government spending is needed to inject lifeblood into a recessive economy. History in this country proves that. We should be spending our asses off on infrastructure, R&D, and other issues plaguing our country. In a few years, the boost to the economy will be apparent through increased tax revenues and a higher GDP. Debt / GDP actually can decrease through large deficits if it is accompanied by solid growth.

 

"debt or stimulating the economy"? With 5 years of being "stimulated" and its effects it should be obvious. Decrease the debt.

 

Decrease the debt = decrease the money supply = decreased economic activity = worse economic conditions. Did you consider the repurcussions of decreasing the debt as it relates to economic activity and the impact of collecting enough taxes to actually decrease the debt?

What is the end goal of decreasing the debt in your eyes? How far do you decrease it to accomplish what you want to be accomplished?

 

Simplistic, false assumptions.