Trump's desire to reduce the deficit. Can someone explain to me how this is a good thing?

With respect, I don't believe you read what I posted or even looked at the image.

I said that debt reduction was common right before a vote on the Debt Ceiling. Look at the graph you'll see there was no vote in 2016 which is why you don't see a reduction.

The last time there was a vote in 2015, the debt pretty much stayed the same between Jan-August with an increase of just $69 billion over the 8 month period.

You need to come back to me in January of 2018 and tell me how things went. Then we need to measure the period between 1/18 and 8/18 for a better comparison with 2016.

 

You can set up any date range you like to see that you are still full of it.
https://www.treasurydirect.gov/NP/debt/current

Kind of blows a hole in your theory that " The debt ALWAYS falls right before the debt ceiling is increased."

 

And as the national debt increases so does the interest payments which come out of tax revenues. "Can someone explain to me how this is a good thing?"

 

AFM, do you really want to do this again?

 

Ok, you win. In 2016 the debt increased $500 billion according to you and it increased $69 billion in the months proceeding the debt ceiling in 2015. More than 4 times less. The point was that the debt is always lower in a debt ceiling vote year, I shouldn't have said "declines". I was over generalizing. I thought you would see the drastic difference and concede that debt is normally lower in a debt ceiling vote year and comparing 2016 to 2017 isn't apples to apples.

So yes, compared with the last debt ceiling year of 2015, the debt is $174 billion less.

Now, all you have to do is prove that this year's decline was due in any way to the policies that Trump or his administration or even this Republican controlled Congress put in place after Trump was elected. If you can't (because that's your claim) you have to admit that it was due to actions were taken during the Obama administration.

Then we have to watch and see if the decrease is made up for by larger spending after the debt ceiling is lifted. Then we'll compare years.

 

Don't worry - Trump will not be reducing the deficit anytime soon.

 

Trumpov doesn't care about the deficit.
His other actions: increasing Military Spending (large) and Infrastructure.. in addition to cutting Income and Corporate taxes, show that.
He just wants to pay for the tax cut for the rich by cutting subsidized health care for the poor.
It's that simple.
The largest funding for O'care comes from a 3.8% capital Gains tax on earning over 250K.
Those are the (currently taxable) people who pay for campaigns, and it would benefit Trumpov and his Billionaire cabinet.
+

 

It's a very simple question and one which you are unable to answer. Just giving you another chance.

 

What some posters have correctly identified, is that no matter who you vote for, the deficit continues.
Despite all party's always standing on election to reduce or end it, it always seems to grow bigger.

And it will grow and grow and grow for as long as they can possibly ignore it. For as long as they can fob people off with a spurious argument, they will continue to.


And what could go wrong?
It's a Ponzi a scheme. What could go wrong is total economic collapse of government services.

For the UK we think Greece.
For America you must think Soviet Union. Unpaid soldiers stranded abroad become mercenaries to survive. A dissolving of the union. Breakaway states, internal wars.

So it is in the nature of government not to address a very thorny issue.
Cutting so many peoples pay, will cost them votes and bad feeling. Will unite millions against them at the same time.

But if they don't, and they won't, it ends in crisis.
As per always.

So it is electoral suicide to stand on any platform except... reduce the deficit. You simply won't get elected.
But once you get elected it is suicide to reduce the deficit. You run a government. Cutting every government employee's pay will unite it against you.

It will be left unaddressed until it crashes.

So you need to protect yourself.
Keep money abroad. Get a private sector job.
Get private health insurance.
Get assets.

Because its not a case of if, it's only when.

Sooner or later, no will lend to your government and it will fall.
China will say "no". And you will be gone from the pacific.
It's a very weak position to be in.

My country is in it too and I see no political solution to it at all. Except... keep it going for the next 5 years so that it's someone else who takes the fall.

 

You can compare the 2017 decrease to ANY time in our nations history. There is no "pattern" of reducing debt.

 

Correct and as the scarcity of Pounds decreases, so does each Pound's tradable value.

New Dollars don't create any demand.
The demand is already there.

Demand is not the problem. Supply is.

There is always a demand for more wealth. It's producing it that is the hard part. Printing more money, why? There is no demand for this.

Changing the denomination of your currency produces demand only for the new printed notes. Nothing else.

 

Can't you see the pattern here?


I think I corrected what I meant, I didn't mean to imply nor did I ever say there was a pattern of reducing debt.

It's not unusual for the debt to be less from Jan to the Debt ceiling vote on years a vote takes place.

The debt reduction you've brought to our attention will up and vanish like a fart in the wind by December. It will be like it never happened.

 

If there is no demand for the creation and spending of new money, and demand is already there then why is capacity utilization in the US declining?


Creating and spending money utilizes capacity the private sector isn't using. This puts people back to work, creates wealth, increases independence, lowers costs for public services.

The government's debt increase, but so does capacity utilization. That means that it is unlikely to cause inflation.

 

Fact: Money is the way modern economies are measured. By definition, a large economy has a larger money supply than does a small economy. Therefore, a growing economy requires a growing supply of money.

The graph below shows the essentially parallel paths of GDP vs. perhaps the most comprehensive measure of the money supply, Domestic Non-Financial
Debt:



One could argue that money begets production or that production begets money, and both would be correct. The point is that money supply (i.e. debt) and GDP goes hand in hand. Reduced debt growth results in reduced economic growth.

 

Are you talking spending or deficits ? These are different things. Clinton grew the economy while cutting deficits.

Less Gov't spending does not necessarily mean less growth. Your comment is logical fallacy if put in context.

The fact of the matter is that the last 3 economic empires went into massive decline because of debt and deficits. Debt is the destroyer of economies in the long run.

 

I disagree. The growth in the economy under Clinton came from a reduction in savings and an increase in private sector debt:

Savings decline:



Increases in debt:



In the case of debt, it didn't end when the surplus ended, it continued through the tech bubble and the housing bubble.

So I'd argue that "growth" has been secured through borrowing and the depletion of savings which acts as a buffer (and makes it more difficult to see correlations). The borrowing of the private sector, which, unlike the government, is extremely finite and as private sector borrowing increases with respect to GDP, the private sectors capacity to consume is reduced.

 

What part of .. the economy grew while Clinton was reducing "deficits" did you not understand the first go round ? Deficits and debt are two different things.

Second .. your claim that massive deficits and debt do not lead to eventual economic ruin is refuted by history.

There is no doubt that running deficits (taking on some debt) can stimulate economic growth. There is also no doubt that an excess of deficits and debt will bring down an economic empire.

 

You are beautifully demonstrating how full of **** you are.

 

The problem with printing money is that it creates a capacity to consume which is not the result of wealth creation. Suppliers see this as a signal to raise prices and produce more. All seems great for awhile. Eventually the bubble bursts and it is not a pretty picture.

 

Please assume that I am correct and then answer this question for yourself and post it here.

Test the theory.
Start from the position that it is correct an then go on to justify it to your own satisfaction please.
If it is an interesting theory you come up with, I will read and consider it.


I have no desire at all to pursue yet another tedious red herring.

No matter how deeply you wish to complicate the relationship, It is still a very simple one.

If you consume more than you produce, you will run out.

So you can make statistics and you can talk economic mumbo jumbo until your eyes pop out and hell freezes over.
Obfuscate as much as you please.

Try and out smart everyone who explains this relationship to you.
But the simple logic of it is it's genius.

It is truism.

True and unarguably true.

And so as long as you reject this premise, all your theories will be incorrect.
I do not wish to go through individually every possible imagination your endless imagination can come up with forever and ever and ever endlessly finding the flaws in your theories for you.


Your premise was wrong, therefore every theory you have build around this false premise is incorrect. All of them. All the new ones you make up in counter to any corrections you are being offered. Also incorrect.

In order for you to understand the relationship, you must go back to first principles. Until you are willing to, you can never understand more.

It's just boring to discuss nonsense with you mate. We've been here before. TLDR.
I don't care what theory you come up with to justify the wrong answer.

This is economics. Start with the right answer and work back from there to see how it came about.
We already know the deficit is bad.

Start from there and we have lots of economics and politics to discuss. Fail to start from there, and we only have politics to discuss.


So we have already addressed with you before how you spending my money, doesn't change the total amount of money being spent as when I spend my money.

That was your stated goal post. Has it moved?
Of course it has, because that is not your goal at all. Your goal is to rob from the rich to give to the poor. And all this is just a rationalisation for that theft only.


So the key parts of this are.
It's my money. You don't get to spend it. You may die in the attempt to.
Which is not good for your economy at all.

The second part is, you suck @ money and I rock at money.
I will get more value for my money than you will.
No one goes to the government for "sound economic advice". Be serious.


And the third part is providing role model for future success.
Using a fair and functioning system as opposed to continuing a dysfunctional, destructive and corrupt one that's ultimate end is in mass poverty.

We reform because reforms are required. We simply wish to act fast.
As each passing day we don't react, more destruction of our wealth occurs.

For the ourth part, think "incentive". In a society where being productive is rewarded by punishment, by the greater theft of your labours, where being frugal and saving is rewarded by punishment, the greater theft of your possesions...

There is no great incentive to work or to save. Rather, the incentive is not to. To sit on arse and get free stuff from all the suckers who do

 

Trump "desires" many things, Trump will get very few of them in the world of politics and government. He has managed to create enemies of pretty much anyone who he would need and the rest cannot afford to be his friend.

 

No.
A growing economy requires a growing supply of resources. Labour and goods.

The same money supply is fine.

If the price of labour and goods fluctuates, so what?

I don't need to print more dollars. I just pay for lower priced things in cents.
Instead of multiplying the price of everything at added cost, I just use the fractions we already have.

To divide up the total money supply amongst more people/available goods, I just use fractions. I don't need to add more money.


So that isn't the reason why more money is being added.

On reason more money is being added because the cost of labour in our countries is too high to compete globally. It's a stealth pay cut for all.

Another is that class warriors wish to take from the rich to give to the poor.

Another is corruption. A minority of vested interests rule.
Which incidentally was Trumps campaign message.
And Trump's presidency is an attempt to address this issue.

 

What?

debt=deficits-surplus (debt and deficits are two measures of the same thing)

Debt is just the aggregate of all deficits/ surpluses.

When the government reduces deficit and or runs a surplus it is taking money out of the economy in the form of taxes and puts that money back into the economy in the form of repayment of Treasuries.

So money is taken from everyone (savers and spenders) and repaid to savers.

This does not reduce anyone taxes because taxes aren't used to repay debt. Debt and taxes are not correlated in any way. It doesn't increase spending as the people holding Treasuries purchased them because they were looking for a low-risk way to save.

If the government repaid the Treasuries in my retirement account, I wouldn't spend that money, I would just move it to another form of savings.

It's not debt that leads to ruin, it's the loss of productivity that the money created by debt represents, usually caused by war, but can be self-inflicted in the case of Zimbabwe, the nation's rulers took highly productive farms run by western companies whose output accounted for 2/3rds of the nations productive output and gave the land to locals (who were threatening the regime). So instead the government reneged on its leases to western companies, took the land and gave it to locals who could not come anywhere close to the level of productive output and GDP dropped sharply but the amount of money in circulation was the same.

If the number of dollars stays the same and productivity declines, inflation sets in. Complicate that with the creation of more debt spent repaying foreign loans and you get a perfect storm.

Debt didn't cause the problem, a lack of productivity caused the problem. The result was the creation of money as a solution.

Explain why? Give details. Why can't the government maintain a debt at the level, relative to GDP is the same as they were in 1940?

What is it about the government's debt that you think is an issue. Again be detailed.

 

Ok, so let's think about this.

The year is 1980. The population is 226 million, about 2/3 of the people are of working age. So about 140 million people work.

Now the amount of money in the economy is whatever it is. The important thing is that you think it can stay the same....

30 years later the population is almost 100 million more.

So now there are ~60+ million more workers competing for the same number dollars

So, the Value of a dollar = Demand for the dollar / Supply of dollars.

Without creating new money the value of the dollar rises as there are more people competing for existing dollars.

As the population continues to grow, this effect will continue. This will encourage savings and discourage spending. It will also discourage investment as simply saving comes with a return.

A lack of spending will lead to a lack of demand.

If banks can earn 2% on their money doing nothing, they will only lend if interest is significantly more than 2%. Today, banks can expect to lose ~2% in inflation on money they hold, a difference of 4%. So rates that are 4% in this economy (for a mortgage) would be at least 8% in an economy where the value of money is constantly increasing. Keeping in mind that rates today are at historical lows.

On the other hand, anyone that takes a long term mortgage will find that as the value of money increases, their pay raises come in the form of increased buying power, so people will make the same amount of money over long periods of time if they are lucky. In some cases, pay may go down but long term debt will stay the same.

This is the same for companies. Borrowing for large scale projects would come with the risk that income could decline (while still maintaining buying power) but the cost of long term debt would cause increases in costs.

With inflation pay generally rises relative to long term debt, so long term debt (like your home) becomes a smaller portion of overall spending in a household. This frees up money to spend on other things.

In your world, a person making $20k in 1980 will be lucky to be making $20k in 2000 and demand would be sharply depressed.

But hey, at least your money would be a good store of value!!

I'll agree with you to some extent here. Vilifying the wealthy is dumb.

The government can provide benefits to the poor without taking that money from the wealthy dollar for dollar.

Trumps presidency is corruption and incompetence on a scale never witnessed in modern times.

 

Today the State Department has officially stopped all Russian people from travelling to the US. Ominous isn't it? Maybe we should start taking our heads out of the sand, and start looking around to see what's being done in our name... as well as what the future holds.

The reason for this is that Russia kicked out diplomats (CIA Agents), so as to equalize Washington's diplomatic staff to the same amount of personnel as the Russians have in the US. This was done in response by Russia to the theft of Russian property in the US by Obama, which Trump refused to return without getting some favors in return. Extortion anyone? Seems nothing is beneath us now?

Here are a few excerpts from an excellent article in the Duran:

****
Above the half-witted mainstream media’s shrill noise about Charlottesville’s George Soros funded, statue-destroying, history-erasing, tattooed LGBT left-wing anarchists, we can hear something far more frightening. We hear the gargantuan growling curses of cannibal giants—the morally lobotomized military industrial complex—hiding in the darkness, scraping swords against stones and cracking knuckles, as they prepare to clash; and in the process of their reckless grappling, crush civilization and crumble landscapes. The question is what will trigger their fight?

The U.S. justification for this action, so we’re told, is because the Russian government had previously ordered U.S. State Department staff (CIA agents) to leave Russia in order to create a more equal number of Russians and Americans working in each others’ embassies. Of course, what is conveniently ignored is that in December 2016 President Obama, in violation of international law, seized the Russian Government’s summer house and property in the Washington DC metro area, and Trump has continued the crime by refusing to return the Russian property without getting some kind of “benefit” in return. Extortion anyone?

****
The supreme law of the land is the Constitution, and it is clear: no federal or state law, statute, code, or policy can exist that violates or undermines any part of the Constitution. Anything that does, is unlawful and has no authority over citizens. The reason for America’s obscenely immoral Congress is because they have abandoned and hated the idea of truth animating all government laws and actions.

Let us always remember that truth is the union between a people and their government. Truth is the life force behind all law, and the U.S. Constitution; it is the substance of contracts; it is the light guiding man’s righteous claim and defense of his inalienable rights; it is the spirit of a responsible and benevolent self-government.

Truth is the soul of justice, the shape of love, and the sound of peace. But sadly the corruption of man, his lusts, and selfish pride reject this principle in exchange for the shifting sands of pleasure and popular opinion.

****
By ignoring truth when making law, Congress destroys both. Without truth, there is no semblance of government authority, there is only the tyranny of DEEP STATE bureaucrats who channel fear to continue their power.