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Bankrupting America
Townhall.com ^ | April 8, 2020 | John Stossel

Posted on 04/08/2020 4:55:29 AM PDT by Kaslin

Two weeks ago, President Donald Trump signed the largest stimulus bill in U.S. history: more than $2 trillion.

For once, both Republicans and Democrats agreed. The Senate voted 96-0. The House didn't even bother with a formal vote.

At the White House, a reporter asked the president, pointing out that the bill includes $25 million for the Kennedy Center, "Shouldn't that money be going to masks?"

"The Kennedy Center has suffered greatly because nobody can go there," Trump responded. "They do need some funding. And look -- that was a Democrat request. That was not my request. But you got to give them something."

"Something" they got. The bill includes $25 million for Congressional salaries, $50 million for an Institute of Museum and Library Services and lots of other wasteful things.

Only a few politicians were wary. Rep. Thomas Massie complained that he wasn't even allowed to speak against the bill.

Rep. Alex Mooney asked: "How do you pay for it? Borrow it from China, borrow it from Russia? Are we going to print the money?"

Those are good questions.

Our national debt is already $24 trillion. Now it will jump, percentage-wise, to where Greece's debt was shortly before unemployment there hit 27%.

Greece was bailed out by the European Union. But the United States can't be bailed out by others.

How will we pay off our debt? That's the topic of my new video.

There are really three options:

1. Raise taxes.

2. Print money.

3. Default.

Let's consider each:

1. Raising taxes on rich people is popular. Even Michael Bloomberg wants "higher taxes on billionaires" like him.

But raising taxes on the rich often kills the wealth and jobs some rich people create. And it won't solve our debt problem. Even if we took all the billionaires' wealth -- reducing their net worth to zero -- it would cover only an eighth of our debt.

2. Some on the left now say, "Don't worry about debt, just print money!"

This belief, called Modern Monetary Theory, destroys lives.

Zimbabwe's dictator tried it. Eager to spend more money on wars, higher salaries for government officials and luxury for himself, he had his government print more money. But that meant more money pursued the same goods. That caused explosive inflation. Soon, a $2 bag of onions cost $30 million Zimbabwean dollars.

The more money the government printed, the more inflation there was. They eventually even issued 100 trillion dollar bills. Today those 100 trillion bills are worth about 40 cents.

Inflation wrecked lives in 1920s Germany, Argentina and Russia, and in modern-day Venezuela, too.

3. America could simply refuse to pay our debt. But that would betray everyone who invested in America, and bankrupt Americans who bought Treasury Bonds.

Defaulting on your debt wrecks economies, too. When Argentina defaulted, unemployment rose to 21%.

Once you're deep in debt, no option is good.

How did we get to this point?

Presidents have talked about the dangers of debt for decades. But they didn't deal with it; they just talked about it.

"We have piled deficit upon deficit, mortgaging our future and our children's future," warned Ronald Reagan. "We must act today to preserve tomorrow."

Bill Clinton said, "We've got to deal with this big long term debt problem."

Barack Obama called driving up the national debt "irresponsible" and then proceeded to do exactly that.

Donald Trump complained that Obama "doubled" the nation's debt. But now, under Trump's presidency and the new CARES Act, our debt will grow even faster.

This will not end well.

So far, the deficit spending hasn't done enormous harm. But it will. You can stretch a rubber band only so far, until it breaks.

Our debt will wreck our children's lives.

Yet, today politicians mostly talk about spending more.


TOPICS: Business/Economy; Culture/Society; Editorial; News/Current Events
KEYWORDS: 4dchess; artofthedeal; budget; caresact; coronavirus; democrats; nevertrumpers; pork; spendingbill; trumpadministration; trusttheplan
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To: Kaslin

There is no “secret” or “unconsidered” way to do away with the debt. There is only one way, and no president, Trump included, is willing to do what has to be done.


41 posted on 04/08/2020 6:54:02 AM PDT by skimbell
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To: skimbell

The best way and the traditional way to alleviate government debt is with a tariff. It has other benefits too like protecting and promoting domestic industry.


42 posted on 04/08/2020 6:57:08 AM PDT by central_va (I won't be reconstructed and I do not give a damn....)
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To: Moonman62
It’s not guaranteed. Rates can go lower and the bond will go up in price.

That’s speculation not investing.

A subtle but important difference.

43 posted on 04/08/2020 7:28:53 AM PDT by Pontiac (The welfare state must fail because it is contrary to human nature and diminishes the human spirit)
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To: Kaslin

There’s actually a fourth option:

Have China pay for all of it.


44 posted on 04/08/2020 7:34:10 AM PDT by 3boysdad (The very elect.)
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To: Kaslin

Jon Stossel doesn’t understand what is going on. Trump is not bankrupting the US. Trump is bankrupting the Federal Reserve a private bank as part of his plan to reshape the US economy and pay off our national debt.


45 posted on 04/08/2020 8:05:00 AM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped)
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To: Kaslin

4. The Constitution says that only gold and silver can be used as money. But who cares what that dumb old scrap of paper says.


46 posted on 04/08/2020 8:15:17 AM PDT by Colinsky
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To: Kaslin
Are we going to print the money?"

Yes.

It is invisible.

47 posted on 04/08/2020 10:47:14 AM PDT by Elsie (Heck is where people, who don't believe in Gosh, think they are not going...)
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To: Kaslin

How FAST we print it will make a BIG difference.


48 posted on 04/08/2020 10:47:49 AM PDT by Elsie (Heck is where people, who don't believe in Gosh, think they are not going...)
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To: central_va

tariff?

who pays it?

the US customer.

it’s just another TAX on me.


49 posted on 04/08/2020 10:55:04 AM PDT by Elsie (Heck is where people, who don't believe in Gosh, think they are not going...)
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To: Elsie
it’s just another TAX on me.

Who better to pay taxes than you the consumer of FOREIGN made goods? We income tax out worker and let in foreign made goods duty free. That is plain damn evil.

50 posted on 04/08/2020 10:58:47 AM PDT by central_va (I won't be reconstructed and I do not give a damn....)
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To: skimbell
Hamlet in Act 1, scene 3 and is spoken by Polonius:    “Neither a borrower nor a lender be, for loan oft loses both itself and friend, and borrowing dulls the edges of husbandry.”
 
Romans 13:8 (KJV) Owe no man any thing, but to love one another:

Deuteronomy 15:6  "For the LORD your God will bless you as He has promised you, and you will lend to many nations, but you will not borrow; and you will rule over many nations, but they will not rule over you.
 
 
We just won't listen!

51 posted on 04/08/2020 11:05:54 AM PDT by Elsie (Heck is where people, who don't believe in Gosh, think they are not going...)
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To: eyeamok
4. Abolish the 3rd Central Bank and go back to Real Money that isn't "loaned" into Society with Interest Attached.

I've never seen any interest attached to my cash. Do you pay interest for it? Or do you receive interest?

52 posted on 04/08/2020 2:36:20 PM PDT by Toddsterpatriot (TANSTAAFL)
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To: Colinsky
The Constitution says that only gold and silver can be used as money.

You're confused.

53 posted on 04/08/2020 2:37:38 PM PDT by Toddsterpatriot (TANSTAAFL)
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To: Georgia Girl 2
Trump is bankrupting the Federal Reserve a private bank as part of his plan to reshape the US economy and pay off our national debt.

Neat trick. How's he going to do it?

54 posted on 04/08/2020 2:43:32 PM PDT by DoodleDawg
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To: Pontiac
If governments are selling bonds that produce negative yields, I would say we are already have a damaged economy.

Bonds don't have negative rates. If they did nobody would buy them. Negative interest rates are applied to deposits that banks have with the central bank. The purpose is to provide an incentive to banks to use that money to lend rather than have it on deposit.

55 posted on 04/08/2020 2:48:22 PM PDT by DoodleDawg
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To: Georgia Girl 2
Trump is bankrupting the Federal Reserve a private bank

First, the Fed is part of the US government.

Second, how does a bank that can print money, for free, ever go bankrupt?

56 posted on 04/08/2020 3:07:58 PM PDT by Toddsterpatriot (TANSTAAFL)
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To: Toddsterpatriot

The Federal Reserve is a private bank that creates currency out of thin air and !oans that currency to the US govt at interest. How do you think we amassed $23 trillion in debt? Govt spending did not get us to $23 trillion. The express purpose of the Federal Reserve is to transfer wealth to the financial elites on wallstreet.

President Trump is in the process of getting rid of the Federal Reserve and at present is effecting a massive wealth transfer of money back to American citizens. This current $2 trillion stimulus unlike TARP is not bailing out banks. Its going to individuals and businesses. Look for another $2 trillion coming shortly behind the first. Much of it to rebuild infrastructure.

The Fed is on life support and Trump is letting them bleed out issuing currency at zero percent interest. Sit back, relax spend your stimulus check and enjoy the show.


57 posted on 04/09/2020 6:41:08 AM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped)
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To: Georgia Girl 2
The Federal Reserve is a private bank

It really isn't private.

that creates currency out of thin air and !oans that currency to the US govt at interest.

Can you clarify this claim? Do you think the Fed creates $20s, $50s, $100s, etc. and lends them to the US government?

How do you think we amassed $23 trillion in debt?

By spending more than we collect in taxes.

Govt spending did not get us to $23 trillion.

Sure it did.

The express purpose of the Federal Reserve is to transfer wealth to the financial elites on wallstreet.

How?

President Trump is in the process of getting rid of the Federal Reserve

He really isn't.

This current $2 trillion stimulus unlike TARP is not bailing out banks. Its going to individuals and businesses.

Are you confusing Treasury actions with Fed actions?

The Fed is on life support and Trump is letting them bleed out issuing currency at zero percent interest.

You said they can create currency out of thin air, how does zero percent interest make them "bleed out"?

58 posted on 04/09/2020 9:13:04 AM PDT by Toddsterpatriot (TANSTAAFL)
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To: Toddsterpatriot

Yes the Federal Reserve absolutely creates currency and loans it to the US government at interest. Hence the Fed interest rate. Even worse it allow banks to borrow the dollars and then lend out 9Xs that amount ie fractional banking.

Every dollar that goes into circulation arrives with debt attached that is owed to the Federal Reserve. Now that Trump has driven them to zero the new currency is going into circulation with no debt. Those are equity dollars and do not add to the national debt. In fact Trump is just bleeding the Fed dry and is going to stick them with their bloated balance sheet.

Don’t worry its all going to turn out fine. By the end of Trump’s second term he will either have absorbed the Fed into the US Treasury Dept or nationalized them or just let them die on the vine and instruct the US Treasury to begin constructing their own instruments for currency creation like the constitution intended. Enjoy the show.


59 posted on 04/09/2020 9:24:29 AM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped)
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To: Georgia Girl 2
Yes the Federal Reserve absolutely creates currency and loans it to the US government at interest.

When was the last time the US government used $20s?

Hence the Fed interest rate.

The Fed Funds rate is what banks charge each other for overnight loans. Nothing to do with the US Treasury.

Even worse it allow banks to borrow the dollars and then lend out 9Xs that amount ie fractional banking.

Banks fully fund every loan. What that means is $1000 in deposits allows a maximum of $1000 in loans.

Every dollar that goes into circulation arrives with debt attached that is owed to the Federal Reserve.

I've got a $20 in my wallet. Do I owe interest to the Fed? Did I ever?

In fact Trump is just bleeding the Fed dry and is going to stick them with their bloated balance sheet.

The Fed's balance sheet is bigger than ever. They hold more interest paying securities than ever. How does that "bleed them dry"?

60 posted on 04/09/2020 9:52:39 AM PDT by Toddsterpatriot (TANSTAAFL)
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