When was the last time your Tax Dollars went to funding Deficit Spending?

Why would I keep my wealth in the form of money when the most prevalent form of it around me is dollars? Assets that hold value in my possession is what I care about, and I most certainly will not give you anything without something in return of equal value.

 

You are a model citizen and exactly what this country wants!! Why keep dollars if they lose value... ding ding ding!!

 

So funny

 

Anyway, let's start out with whether you want to talk about the debt or deficit? Don't mix them up they are two separate problems that must be addressed one at a time.

Why wouldn't tax dollars go towards paying down the interest on public debt if it's included as spending in the Federal budget tables each year?

And yes, you pay down the debt by running a budget surplus, but you cannot completely eliminate the debt until treasury sales are scaled down until they are eliminated as well (too bad it would just eliminate a useful spending tool for the government without any benefit).

 

I never said tax dollars didn't go to interest. Keep up... you're embarrassing yourself already.

No, I think you are completely misunderstood. I don't think under our current financial system, it is possible to pay down the national debt with out changing current legislation. Paying down the debt would create money "in float". This country does not have any money that is not accounted for. There is no Seigniorage over our currency. It is all backed by debt. There is no way to pay off the national debt with out incurring more debt.

Think about it!

 

You think the US can't pay down its debts? You mean you aren't sure? What are you trying to prove anyway? Are you pushing the gold standard?

 

Absolutely not. My point is "we" as a country have our own currency. It just happens that our currency is introduced through debt. There is absolutely no other way under current legislation to create money.

I most definitely do not advocate a gold standard. I love America's system. I'm just trying to let people know that the national debt is not what they think. It is not the amount of money the Government has "borrowed". It is the amount of assets the Government has created!

Just think about it logically. Ever since we left the gold standard our debt has gone from $200 billion to $14 trillion in the span of 40 years. How do you think that is? How do you think people in this world came up with $14 trillion (or $9.9 trillion in realistic standards) to "lend" to the Government.

Honestly, think about it logically. How does a country with a made up currency create the made up currency?

My theory, well I can't claim it, but it is that the National Debt is equivalent to the amount of gold we had in the gold standard. Our currency is backed by debt... not gold. Think about it.

 

and once again I will say that the US can get away with what they do because they have the reserve status.....once its lost then the dollar will collapse like the zimbabwe dollar.....too bad you just cant grasp that!

 

There is no difference between the interest and the principal of our debt. This years interest is part of next years principal. If taxes are used, ACCORDING TO YOU, to pay on the interest, that is exactly the same as taxes being used to pay on the principal. Your silly argument only holds water because we run constant deficits and constantly add to the debt. If we ran a surplus, then your premise would obviously be completely wrong and there are only a few reasons why we do not run a surplus and that is stupid politicians buying reelection votes with giveaways, and consolidating and increasing their power..

 

Lol, you are just assuming that if we ran a surplus that is what would happen, yet you have no proof what would happen if we did. What would the money be called that paid off the debt? Who's balance sheet would it be on? Would it be money "in-float"? Because every single dollar in existence is someones liability.

I guarantee you if we ran a gross surplus, they would invest the money back in to themselves and not use it to pay off maturing debt.

And you make no sense. "Yesterday's deficits are today's principal"?

Well no crap. Today's deficits are today's "borrowing". The point is the principal has to be created by the Government. The reason the Government has to "borrow" to pay for interest on the national debt and deficits is accounting wise that money does not exist anywhere.

You are taking a very simpleton point of view on this and not really getting in to the meat of reserve accounting and the checks and balances of our system.

Think of the debt as the amount of "gold" we would have in the gold standard. Think about it really hard!

 

Now you're "KARNAK THE MAGNIFICENT," Seer of the Future, as well as the expouser of financial theories that remain unproven.

All I see from your posts is what comes out of the south end of a well fed, north facing bull.

 

All I'm talking about is how the system works, I'm not talking about whether it will fail or not. Too bad you just cant grasp that.

And for some reason people think it is intelligent to compare us to country's like Zimbabwe or Weimar. Watch Fox News much?

 

Show me the transaction that would occur that would allow your tax dollars to pay off the principal of maturing national debt.

How would that affect the nation's balance sheet. I can show you how the balance sheets are affected by every single transaction there is, but there is nothing that can get the balance sheets to balance if taxes are used to pay off principal on debt.

The only thing that can pay off debt is debt itself.

So please, bullcrap aside, show me how it would work in our system.

Thanks!

All you are saying is that you "think" it would happen. It's time to "prove" how it would happen.

 

Sounds like you are stuck in the current state and root causes stages of 6-sigma. I have moved onto forming solutions.

 

Granny cashes in a $25.00 Savings bond, at maturity . The bond was purchased for less than $25.00. The govt sends her a check for $25.00. Part of that $25.00 paid the interest and part of it paid the principal of that old debt.. Now $25.00 of US debt has been retired.

 

Either say something of substance or move along. I can't help you out if you don't even try to understand it.

 

Show me how that affects the Federal Reserve balance sheets, the Treasury's balance sheet, and the country's balance sheet.

Where you have a fundamental misunderstanding is you think that there is money that is just floating around the economy with out any existence point. You are wrong. Every single dollar is accounted for.

Therefore, show me how the balance sheets would be affected by your tax dollars paying off the principal of granny's savings bond, that she purchased with previous existing money backed by debt?

 

You need to take your "ECONOMICS FOR DUMMIES" book back to the campus book store. It was on sale because its missing a lot of pages.

Or you show me how that does not show up on the United States Government's balance sheet.

On the Federal Reserve Bank's balance sheet, if they redeemed Granny's bond, then they have a $25.00 debit on their balance sheet and they have possession of a $25.00 US Savings Bond. They turn that bond into the US Treasury and the FED gets a $25.00 credit to offset the debit from Granny's transaction and the Treasury of the United States posts $25.00 against the accumulated debt of the US Government.

You interchange terminology faster that a church bingo machine mixes balls.

 

The insults are very amusing, especially when backed up by complete lies.

First off why is the Federal Reserve in possession of the $25 Savings Bond? You are mixing up the Treasury's account at the Fed, with the Fed itself. The Federal Reserve does not purchase the Savings Bond from granny.

This is how it would work in the real world.

The Treasury would tax $25. The $25 would be credited to their account at the Fed. Reserves would be debited out of the banking system by $25.

If the bond were redeemed. The Treasury would credit $25 in to Granny's account. Reserves would increase by $25.

NOW, here is the million dollar question. What would be the asset on the Fed's balance sheet that backs the $25 liability in reserves. If you can pull that off, then I will believe you.

 

What a crushing bore. Granny doesn't have an account. She got the money. By what route the CASH came to her, it started in the US Govt.
The govt now owes $25.00 less. If that's a lie,,,,,,,,,,,,,
And good bye. Even retired, my time is too valuable to waste on utter nonsense that you purvey.

 

Lol, what a cop out.

You have absolutely zero clue how our system works.

Reserves are interchangeable with Treasury Deposits. As T-Deposits increases, reserves decrease.

All reserves + T-Deposits are backed by debt...
Real World Source: http://www.federalreserve.gov/releases/h41/current/h41.htm

If taxes were debited out of the system, the T-Deposits would increase and the reserves would decrease. If taxes were used to pay off the national debt.

Reserves would increase
T-Deposits would decrease
"Debt" would decrease

Now you notice how there are two debits in the economy but only 1 credit. What would be the corresponding asset that would back this $25 that is in the banking system?

The system would have $25 that is "in-float". And currently we do not allow money "in-float". So you need to get back to the drawing board, and start looking at this from the top down to the bottom. Unless you can show me what the asset would be in return for the two debits... then you should just leave this thread for good!

Any other takers?

 

When did the Federal Reserve Bank and the US Treasury merge?

 

The Treasury uses it's account at the Federal Reserve to handle all Government receipts/expenditures.

The Federal Reserve has no part in what the Treasury does. When the Treasury issues debt, the Federal Reserve plays no part in that. When debt is redeemed, the Federal Reserve plays no part in that.

The only time the Fed's come in to play is when they purchase Government debt to increase reserves in the banking system.

But regardless, your example of grannies $25 still leaves $25 in the system that is unaccounted for. This would work if we had some sort of "float" or equity column on the asset side of the balance sheet. But it doesn't work like that, so you still have not proved what would happen if tax dollars were used to pay down the national debt.

I am being dead honest, if you can show me how it would work, I will change my theory. I only want to know the truth. And the truth is, if you go through every single transaction from the Government issuing debt all the way to individuals paying taxes... there is checks and balances throughout. And taxes paying off maturing debt creates an "unchecked" balance.

Like I said, picture the national debt like the amount of "gold" we had. You can't destroy gold, you can take it away from people and not give it back. That would be the only way to destroy the national debt is to take money out of the economy and not give it back.

 

You are a horribly confused young person. One debit vs. one credit equals balance.

Does the Treasury issue a check to buy a tank? Does the Treasury electronically transfer a Social Security benefit? Does the Treasury issue a check to pay off a redeemed Savings bond? Yes, yes, and yes. The Treasury has to balance their books. Outflow-income+loans[OR SURPLUS]=balance. Redeemed Treasuries are part of outflow. Newly issued Treasuries are part of loans..

That the Fed buys and sells Treasuries is a whole different issue. They buy cheap, sell high. Maybe you heard of that. The Federal Reserve is supposed to make an operating profit.