Posted on 11/18/2005 11:40:48 AM PST by Robert Drobot
According to the Treasury Department, from 1776-2000, the first 224 years of U.S. history, 42 U.S. presidents borrowed a combined $1.01 trillion from foreign governments and financial institutions, but in the past four years alone, the Bush administration borrowed $1.05 trillion. ... "No American political leadership has ever willfully and deliberately mortgaged our country to foreign interests in the manner we have witnessed over the past four years," said Tanner. "If this recklessness is not stopped, I truly believe our economic freedom as American citizens is in great jeopardy." [CNSNews]
I wonder if there are any implications...
"The facts are not partisan, and they're not ideological," said David Walker, the nation's comptroller general. He should know. He's the nation's chief accountant and signs off on the government's balance sheet. America's fiscal future, he said, "is worse than advertised."
When the government next reports these numbers Dec. 15, the total is expected to reach $46 trillion to $50 trillion.
How much is $50 trillion? About $166,000 for each of the almost 300 million Americans. [Seatle Times]
American "wealth" is an illusion based on borrowed funds that will soon be cut off, followed by creditor claims. Are you ready to repay the $166,000 spent on your behalf?
If five of us pitch in, it's $20 each.
Sloth: Your math sucks.
Drobot: Maybe. But it brings attention to a very real issue.
Gosh, that sounds like "the documents were fake but accurate."
You've got it. Maybe he should talk to everyones favorite math major. HAVOC!!!
It is complete irresponsibility by Bush and Congress. There are about 536 fools in D.C. All you have to do is check http://www.publicdebt.treas.gov/opd/opdpenny.htm to see how much the U.S. is in debt. It is absolutely ludicrous, irresponsible, and selfish the way these fools spend our money. No control. No vision. Out of touch with reality. And it will not get better until we have a President with the guts and courage to tell Congress that if they give him a budget that exceeds X, the only thing they will see coming out of his pocket would be a big veto pen. If I were President, I could and would do just that.
OK, smartie pants. You're so smart, YOU can pay back my half mill plus.
You mean we got TVs, VCRs, kitchen utensils, clothes, watches and sporting goods - and the Chinese took an IOU?
ha ha ha ha.
Stupid Chinese. Didn't they learn from the Japs?
You seem as confused about math as Robert Drobot.
Our public debt is $7.9 trillion. The Chinese hold about $200 billion.
Unless your definition of most is less than 3%?
You are right. There are a lot of misconceptions about how the Fed operates. As I said, there are positives and negatives about the Federal Reserve as an institution. It has fulfilled some of the promises it held at its founding, but it also has failed in major ways as well. Clarifying both the good and the bad is something would be a useful thing.
Personally, I dislike the role the Fed plays in the monitization of our currency. Most people have no idea how any of this stuff works, because it it generally in the government's interest to hide it through opacity and misinformation. I recently read a great story that has a rather interesting take on economics in general, and I've considered writing about it. If you are a R.A. Heinlein fan, you might want to check out "For Us, The Living". It was his first novel, that wasn't actually published until just a few years ago, though it was written in the mid 30's.
alley cat - see post 163 esp. tag line
It's a pain, isn't it, when freepers correct grammar? What's his name did it first though.
Okay, I'll pay back your half mill plus!
Could you please explain further what exactly the Fed does that's so bad?
Does the US Treasury take Visa? If not, can I just pay the interest until I can start paying on the unpaid balance?
I'm quite willing to pay what I owe, I just need a little grace period to rearrange my other obligations. Another 20 or 30 years ought to do it.
SWWEEEeeeeeeeet!
The now cut that out! Don't you know the sky is falling?
Anyway, it's ALL Bush's fault. I'm not sure what the problem is, but whatever it is it's Bush's fault.
In a nutshell, here's how FRNs (Federal Reserve Notes) are monitized: The Bureau of Engraving and Printing prints up a bunch of FRNs. Let us say, in this example, that it is $1,000,000 in $20 bills. That is 50,000 $20 bills. The FedGov sells these 50,000 notes to the Fed for aproximately $1500. (4¢ each.- Roughly the cost of printing) The Fed then loans these back to FedGov at face value, thus creating a debt $998,500. This debt is an obligation generally in the form of T-Bills or other instruments that is backed by the "full faith and credit" of FedGov. The bottom line meaning of that term, "full faith and credit" is FedGov's ability to tax you and I at whatever level they think is appropriate.
This is how part of this works in a nutshell and is based on research I did about 15 years ago, so you'll have to bear with me on any discrepancies. I Googled around a bit and came up with a few links that talk a bit about how some of this stuff works. Granted, many of the hits were from folks wholly in the camp of those who want to see a return to hard currency, as is demanded by the Constitution, but some of their concerns, and much of the descriptions given of how things work are valid.
I don't think our economy could operate efficiently at this point on a metallic or bi-mettalic standard. Liquidity would suffer too much from it IMO, but at the same time, the implications and results of fiat money aren't altogether good things either.
I do not like the power the Fed takes upon itself to restrict the growth of the United States to a narrow band that they deem to be sustainable. In too many periods of our history, this restrictive stance has hurt the people of this country much more than was necessary. The power they have over the money supply is too easily manipulated for political gain. IMO, the recession of Bush 41, which was largely responsible for Clinton's election, was a creation of an overly restrictive Fed (with a lot of collusion on the part of the MSM).
One document about the federal reserve system is "Modern Money Mechanics", which was published by the Chicago Federal Reserve Bank. You might be interested in reading it.
Now I understand your confusion. The Fed loans $1,000,000 to the FedGov. Now the FedGov has a liability of $998,500 and an asset of $1,000,000.
Doesn't sound like such a bad deal. You have a better objection?
Thanks for the link. I'll take a look.
Speak for yourself, but keep your mitts off my private property. Typical lefty approach. Doing good deeds with other people's money.
I don't see where you get an asset out of this. One of the fundamental problems with the way this is done is that the debt is essentially created out of thin air, but the money to pay the interest never is. Banks do the same thing every day. Let's say you deposit $1,000 in a bank. The bank can put that $1,000 in a vault, and then loan out $10,000 because of the way that bookeeping works for banks. The bank creates $9,000 out of nothing, which has to be paid back, but again plus interest. I wish I had a license to print money.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.