1937 - Republicans were crying about excessive debt levels and to balance the budget.

You are talking about gross interest. Our net interest expense was not nearly that much. Our net interest is almost at the same levels it was 20 years ago. Interest is the least of our worries right now.

Your uneducated understanding of the national debt is no reason to send this country in to a depression. You have failed to even come close to making a case for why $16 trillion is too much. Just because you "think it is" does not make it so.

 

So if you just ignore over half of our debt we are at 50% debt to GDP?

 

It's not ignoring... it's understanding it. Most economists don't use intragovernmental debt in their ratios anyways as it is an asset and a liability to the Govt. And even if we use your 100% figure, it still does not make a case for why $50 billion wasn't too much debt but $16 trillion is.

 

That really does not matter. Money will need to be printed to fulfill that debt...so Treasuries will need to be sold and debt incurred. Unless of course you want to start a debt forgiveness parade....not sure the system can handle that much moral hazard though.

Sure it does. 50 billion was not more than 100% of Gross domestic product....16 trillion is.

I guess you can attempt to make the argument that a country that controls its own currency does not need to worry about debt....and in a world where that country does not rely upon others to finance its debt you would be correct. The fact is though..that the power to print your own currency is not as significant as The Ben Bernank would have you believe.

 

If something isn't done about it, your children and your children's children will be slaves to the state.

 

Explain to me how the Govt can owe themselves money and why they would need to print money to pay themselves? Please, with all your extensive knowledge of this subject, explain that one to me, lol!

What a weak argument. So then explain how just 5 years after 1937 our debt to gdp was 120%.

We don't rely on others to finance our debt. We force our banks to finance it for us. China does not "finance" us, they simply invest the money we give them so that they can get some return for it. We don't need anyone to give us money because we can just create it ourselves.

And the power to print your own currency is very significant, lol. It's the difference between us and Greece. 1% yields on our debt vs 20%+ on Greece's debt. That ability to pay your debts every time is very significant!

 

Econ 101: GDP is NOT a barometer of economic growth, it's a barometer of spending. I can spend like a drunken sailor too, that doesn't mean I necessarily have it.

What you should be looking for is a positive GDP-Spending ratio, as well as a lowered debt. Here, some current statistics to broaden the discussion:

http://www.usdebtclock.org/

Unfortunately, our Debt-GDP ratio is at 100% And our Spending-Revenue ratio is only 33% Compared to our Spending-GDP ratio of 40%

Is this painting a clear picture to you?

Inflation artificially jacks up the economy, and temporarily production. But eventually, when the loans and interest rates come to roost, when those vultures would hound for money, the middle class would suffer dramatically.

What led to the Great Recession isn't necessarily "trickle-down", but democratic economic philosophies extending to the housing and credit markets, where Liberalism/Keyneism stated these same words and applied them, as people got houses they couldn't afford.

But this goes back decades, to the egotistic liberal philosophies starting in the mid-20's with wild speculation regarding the dollar. FDR's New deal and the inflationary spending that resulted, gave us the Great Recession of the 70's. Would you now avow yourself from the responsibility of multiple booms and busts in the economic cycle?

Or, are you telling us the only way the Empire will prosper is to live in a perpetual state of economic decline and temporary prosperity? I refute such an absurd notion, almost as absurd as Keynesian economic theories.

 

Intragovernmental debt is debt.

It's owed out, just the same, you silly bastard...

 

You just are not a very intelligent person. You wouldn't understand.

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Lmao! What econ 101 course did you take?

The US Debt Clock is your "statistics". You guys bring serious entertainment to my life. I love it.

This is embarrassing dude.

 

The US government owes SS some trillions of dollars. Those dollars will be paid out. New taxes will have to arise, or money be printed, in order for that to happen.

But you are considering that intragovernmental debt to be insignificant. Why?

I am so ******ned smart it hurts, son. Watch your ass.

 

Lol. You are the type of person that brings great enjoyment to my life. The fact you actually think you know what you are talking about and are so confident in it, is absolutely hilarious.

Intragovernmental debt is an asset and a liability for the government. I suspect you don't understand what that means.

 

You folks do realize that our debt today is equivalent to their debt being $1,036,585,365,853. If you think that wouldn't have run them into the ground you're incredibly uneducated in regards to how economics works.

 

Just for clarification because I've spoken with progressives on both sides...

Do you believe at some point congress will pass something saying we won't pay some or all of it?

Or are you saying its literally just a fake number, that its all funny money?

 

It's important to note Mr. Troll here hasn't actually refuted any of my notions, until he can, let's assume he can't.

You say the Debt Clock lacks legitimacy? It gets all of its stats from government or government-related operations.

And one doesn't need to take a class to know that fact. It's G=Gross D=Domestic(IE:Local/National) P=Product. When the Debt exceeds the Product, that means we're not producing nearly as much as we should(OR, it also means that the cost is greater than the product itself).

It's a fairly simple concept I should hope.

 

I refer to it as an allowance. We have that much we can pay for future social security expenses based off current laws. There is no one we owe for that debt. It is owned by the government, so if they paid it off they would pay off themselves. I personally believe we should eliminate intragovernmental debt and just add social security to the general fund and pay whatever we need to pay for the year based on predetermined rates adjusted for inflation.

So basically intragovernmental debt just becomes debt held by the public when social security outflows are more than social security inflows. It is literally $5 trillion of nothing.

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Where did I say the debt clock lacks legitimacy?

Wow! I couldn't write better comedy if I tried.

 

Oh yea, and to answer your questions directly.

No I do not think Congress will pass something saying we won't pay some or all of it. In fact I think they will pass laws saying we will pay more than what we have intragovernmental debt if needed.

And it is a fake number with funny money. Kind of like taking $20 from your left hand and giving it to your right hand and saying you'll pay your left hand back.

 

I truly detest the "deficits don't matter" crowd.

With interest, is the key concept sir.

Your right hand is paying your left hand back with interest.

And that, sir, is thievery. That interest is coming from the taxpayers, and there is no reason that has to happen.

 

The interest is not coming from tax payers as interest to the government becomes expenditures which makes it essentially worthless.

 

No, sir. You are mistaken. The interest is a liability, and this particular liability has to be paid in cash. It's the obligation to the bondholders. The "full faith and credit of the United States".

 

When it comes to the economy, conservatives are always wrong.

Come to think of it, have they ever been right about anything?

 

and did the spending in 1937 get the country out of the depression? no..it took world war 2..is that what you want to happen again?

 

You know the spending continued, economic collapse ensued, more stimulus spending happened, and the recovery went back into recession... Right? The Great Depression illustrates the folly of central planning more so then any other economic event. The guys in 1937 were right.

 

thats the hard part now..when gm filed for bankruptcy they paid their bond holders just 5 cents on the dollar thanks to obama..investors dont trust this guy and will he do the same to us bond holders? i wouldnt own one cent in a us bond right know..

 

How did your stimulus go lefty? Ever see incomes fall so fast? How is obamacare going? Ever see full time work disappear so fast?

 

To those people who claim the debt is irrelevant or we should simply default... Are you completely insane?

Ignoring the fact that nearly 60% of our debt is held by foreigners including foreign governments, you also have to remember that nearly $1T in Treasury securities are owned by private investors, almost $1T are owned by mutual funds, more than $700 billion are owned by state and local governments and more than $500 billion are owned by pension funds, among others. I tend to think that they will get rather upset if they are not paid the money they are owed. In the end the debt must be paid, and we will have to cut spending heavily to make sure it is.