So we all know the value of our currency is slowly, or rapidly in the last few years, decreasing in value which in turn is eroding the middle class creating a downward spiral. The fed by printing money has decreased the value of the greenback even more and flooding the market. So, theoretically, could we pay off our nations debt with the deflated dollar and once this huge burden is removed just start destroying money? The us government already destroys huge sums of old bills but they re-introduce new currency to immediately take its place. So what would happen if they just didn't reprint the money and just let it be removed from circulation each year?
I don't think its necessary for money to be physically destroyed in order to lower inflation. Simply taking it out of circulation (and not reintroducing it) should suffice. Though, the only way I know of that government can take money out of circulation is through taxes. I think that, large sums of money stored in banks and personal accounts really isn't in circulation, but apparently is still considered for inflation values. -Meta
the value of the dollar will just keep falling unfortunately. The fed has gone down this slippery slope and now there is no turning back! If they rein in the currency that they bought through QE 1 and 2 it would cause massive deflation and many banks and insurance companies would fail. So now all they can do is keep inflating until the currency crisis hits!
It is a "can of worms". Allow the illusion of USA military supremacy to continue as long as possible. You really don't want to see what your dollar can buy without the bully backing it up.
I don't see where I was talking about our military. Let me look again.... Nope still don't see it. I am also missing your fallacy on the "illusion" you are referring to, please point these out o wise one. Last I checked we still have the most powerful military in the world, and unless something drastic happens we will continue to have it well into the foreseeable future. If you don't have anything meaningful to add then ****.
Ahhh, anybody who watches inflation doesn't "know" that. Inflation has been incredibly minor over the past few years and indeed in important sectors (like housing) we are in a deflationary spiral. Inflation is a meme that the rightwing repeats so much they don't notice reality.
It's no worse than the "meme" that housing is in a "deflationary spiral". What you call a "deflationary spiral", economic literates call a "self-correction". In other words, housing prices are inflated, therefore, they have to decline to their equilibrium price. It's basic supply and demand. Too bad you can't wrap your head around it.
thats what happenhs when they watch too much Jerry Springer.....they become brain dead. Anybody with half a brain can see that housing just came off of a spectacular boom and needs time to correct...it would of corrected alot sooner if only the government got out of the way. On the other hand,just look at how food and airfare and public transit and utilities and even property taxes are rising!
Yep, it's all what you call it. Except for the fact that houses were the main source of wealth for tens of millions of working people. So it makes a difference to them. But then, what do you care? The economy is to make the rich richer, right? In any case, falling prices are deflationary by definition so your attempt to distract is noted.
I'll say this: Russia had a very powerful military once, but they went broke and collapsed in, uhoh, Afghanistan. See any similarities. Our most powerful military in the world operates on a credit card. A house with no foundation must fall. Sounds like the enemy has a tried and true strategy and we walk right into it. Oh, that's right. We are America, nothing can happen to us.
Oh! But you forgot to call my argument a "meme". I'm not sure I can address this until you've used the word "meme".
C'mon, Landru. Don't be shy. You know you're just dying to type the word "meme", to feel the exhilaration of having your fingers sweeping effortlessly over the "m" and "e" keys in alternating rapidity, to feel the satisfaction of having repeated the same term hundreds upon hundreds of times to describe arguments on the internet. C'mon, Landru. You can do it! Meme! Meme! Meme! Meme! Meme! Meme! Meme! Meme! Getting anxious yet? Are you feeling the itch? Is your body convulsing with desire and anticipation? The urge must be irresistible!
However, it is a pretty obvious answer to me. Tally the total number of credible outstanding dollars (most valid sources put it at 1-2 trillion dollars US). Print 15 trillion dollars to pay off internal and external debts. Your US dollar tomorrow buys between 1/7th to 1/15th of what it buys today. As I said, hold on to that illusion, bro, and pray that the USA military isn't embarrassed and that China does not invade Taiwan. This is the best case scenario. Reality is that civil war would erupt in the USA as more than 95 % of the country would be in real poverty overnight. The only part of the equation, evidently one that you do not see, is the presence of a strong military and it's influence upon how the world SHOULD see the USA dollar.
"You're going to offer something more to justify this comment. Can you?" Reiver Mike and Joe are two kids on a schoolyard playground. Mike is 12 years old, 6 feet tall and weighs 200 pounds. Joe is 11 years old, 5 feet tall and weighs 91 pounds. Here is a hypothetical discussion after Joe lent money to Mike for lunch yesterday. Joe: Mike, you borrowed five dollars for lunch yesterday, can you repay me today. Mike: Nope, dont have it, Ill catch you tomorrow. Joe (the next day): Mike, do you have my five dollars today? Mike: Nope, Ill pay you four dollars in one year and I am going to need lunch money tomorrow so bring another five dollars for me to borrow tomorrow. Ill pay you back four dollars one year from tomorrow for the second round of borrowing. The analogy to treasury bills, their relation to inflation and the role of the US military as Mike in this simplistic scenario should be obvious (i.e. who SHOULD borrow and at what return). Of course, more realistic stories regarding protection and other nonsense can be invoked, however, I am not a fiction writer.
Of course, why would we print money if we can borrow what we need at almost zero interest? Only the **********s think borrowing at de minimus interest is a bad thing. Hence the printing press fantasy.
Yes, the tea party is convinced the Fed controls the money supply through a printing press. They think the Fed actually printed all that money it flooded into the economy. This is why they are so perplexed at how the Fed will get it all back in time to prevent massive inflation.
is that you are correct and that engineering mathematics and accounting has nothing to do with economics. The problem, is that I saw some Economics majors in my mathematics classes. Thus, my skepticism.
The irony is, if the Fed had just printed the money to pay government expenditures, there would be zero debt. Lots of inflation, but zero debt. They just can't get their crazy narratives straight.
You can't either. If the Treasury printed its own notes it would be a different story but it has not done much of that since it began printing Federal Reserve Notes instead of US Treasury Notes. It is a small, but significant difference. The Treasury can only get money from the Fed by selling notes that the Fed then buys for cash on the open market. The debt does not go away just because the Fed buys the notes instead of someone else. Treasury notes are returned by the Fed in only two ways. Either the treasury redeems them with cash or the Fed declares a profit and returns the amount in notes. That said, it is theoretically possible for the Fed to gain ownership of the entire national debt but to do so it must outbid all others in the open market. In this scenario, which is also part of the tea party mythology, the demand for US treasuries collapses completely and the Fed, with an unlimited supply of money, uses it to buy up the national debt which creates a deadly inflationary spiral. The only problem with this is that it depends on a complete misunderstanding of the relationship between the Fed and the Treasury. The reasoning goes that the Fed must flood the economy with money to buy up Treasuries because no one else will. The reality is that the Fed can only buy Treasuries on the open market, buying only Treasuries that others have already bought. If no one buys US debt at a Treasury auction the Fed cannot buy it either so that tea party hyperbole is also impossible.
