Posted on 09/09/2020 1:59:06 PM PDT by nickcarraway
Thank you Reagan, Bush, Clinton, Bush, Obama and trump.
This is a stocks vs. flows argument.
Debt and GNP aren’t exactly commensurate, but historically there’s been some sort of correlation.
Here’s a thought experiment: If I give you $1 million (make it trillions if you like), at zero percent interest, is it just a gift? I’d say the answer depends on whether or not its a perpetual (or rollable) loan, or there’s a hard payment date. If you can extend indefinitely, isn’t it a gift?
Unfortunately, our Treasury has borrowed at extremely low rates with a finite term. In 10, 20, or 30 years, those debts will have to be rolled over and reissued, likely at higher interest rates.
As a once-engineer, the key parameter I keep my eye on is whether or not real interest rates (nominal rates minus inflation) are positive or negative. If negative, credit is expanding. If positive (think Volcker), credit (and likely the economy) is contracting. They’ve been almost universally negative here and abroad for the last generation.
There, fixed it for you.
There is no Democratic mess that the Republicans can’t make worse.
There is no Republican mess that the Democrats can’t make worse.
“There, fixed it for you.”
No you didn’t, the deficit was rising even before the coronavirus hit.
Nothing that cancellation of our debt to China and confiscation of the ill-gotten gains of corrupt NGO’s and fake charities can’t solve.
> America missed its chance to get the debt and deficit under control. Now, it is thoroughly out of control. <
True that. So what are the options going forward?
Will the United States start making an effort to pay down the debt? No.
Will the United States raise taxes insanely to pay down the debt? No.
Will the United States repudiate the debt? No.
So what’s left? Crank up the printing presses! Devalue the debt. It’s the only viable option. The only question is when that will happen.
Side note: I always liked Johnny Cash. I wouldn’t mind seeing him on a future US $100,000 bill. And that might buy you tank of gas.
Cancellation of debt to China might be fun, and it might actually be just, but it likely have a bad effect on U.S. creditworthyness.
> No you didn’t, the deficit was rising even before the coronavirus hit. <
You’re right. I’m a huge fan of Donald Trump. I see him as the last hope for the Republic. But he has done nothing to address the deficit.
History will judge that as perhaps his biggest failure.
Because “We the People” don’t want to do anything about the deficit.
Everybody says, “Cut Spending”, until it comes time to cut their pet program.
What could go wrong?
> Everybody says, “Cut Spending”, until it comes time to cut their pet program. <
Agreed. But perhaps a small percentage cut across the board might have flown. I’m actually a bit surprised Trump has not used the bully pulpit to push for this.
Trump - of all people - should know that an organization simply cannot run annual deficits forever.
I wonder how many true conservatives understand this on here?
Hold on to your gold and silver and lead. The 2020's are going to be a wild ride.
There was no deficit before COVID-19.
Bush allowed something to creep up on his watch.
Trump was blind-sided by COVID-19.
As much as we carp about some of these things, I don’t think
we would have liked some of the alternatives under Bush
or Trump.
What bothers me more than anything is that we don’t make cuts
to get us on a pathway to doing better. Welfare is estimated
to cost us over a trillion dollars a year with all things
combind.
Sunset that thing. Give people five years to get off it.
Make their payments shrink 1/60th each month until it is
gone. Then never start it up again.
That alone would be one trillion less per year.
And by the way, be careful of blanketing everyone after
Carter with anything. It makes him sound as if he was the
last good president. LOL
I don’t know anything about carter. I was 8 years old. I guess I remember the gas lines vaguely. I always thought he was the worst president because of that.
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