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Paying Down The Debt Is Now Almost Mathematically Impossible
Submitted by Simon Black via Sovereign Man blog,
Exactly 199 years ago, in 1815, a “temporary” committee was established in the US Senate called the Committee on Finance and Uniform National Currency.
It was set up to address economic issues and the debt accrued by the US government after the War of 1812.
Of course, because there’s nothing more permanent than a temporary government measure, the committee became a permanent one after just one year.
It soon expanded its role from raising tariffs to having influence over taxation, banking, currency, and appropriations.
In subsequent wars, notably the American Civil War, the Committee was quick to use its powers and introduced the union’s first income tax. They also detached the dollar from gold to help fund the war.
This was all an indication of things to come.
Over the subsequent decades there was a sustained push to finally establish the country’s central bank that will control money and credit, as well as institute a permanent income tax to feed the expanding aspirations of government.
They succeeded in 1913 when the Federal Reserve Act was passed and the 16th Amendment ratified, binding the country in the shackles of central banking and taxation of income.
Over the century that followed, the US has gone from being the biggest creditor in the world to its biggest debtor.
Decades of expanding government programs, waste, endless and costly wars, etc. have racked up such an enormous pile of debt that it has become almost impossible to pay it down.
A lot of folks don’t realize that, since the end of World War II, the US government’s total tax revenue has been almost constant at roughly 17% of GDP.
In other words, even though the actual tax rates themselves rise and fall, the government’s ‘slice’ of the economic pie is almost always the same - 17%.
I’ve worked out a mathematical model which shows that, even with absurd assumptions (7%+ GDP growth for years at a time, low interest rates, etc.), it is simply not feasible for the US government to ‘grow’ its way out.
Default has become the only option. And that could mean a number of things.
They could default on their creditors (other governments like China who loaned money to the US government). But this would spark a global financial and banking crisis.
They could default on the Federal Reserve, which owns trillions of dollars of US debt. But this would create an epic currency crisis for the US dollar.
They could also default on their obligations to their citizens—primarily to future beneficiaries of Social Security (who collectively own trillions of dollars of US debt).
Or they could choose to default on their obligations to every human being alive who holds US dollars… and engineer rampant inflation.
None of these is a good option. And simply put, the US government has reached a point of no return.
I aim to demonstrate this to you in today’s video podcast episode. It’s a very sobering realization.
Join me to see it for yourself:
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Or, you know, the US gov't could default.
They've been soft defaulting for years. Everytime they run a deficit that increases the debt (money) supply it is a default.
Of course history has hinted that we have already defaulted when FDR called in the gold and the republic basically closed and a new form was inserted in it's place.
pods
When has "paying down the debt" with debt EVER been possible?
It is another term for bankrupt.
Strike the "almost" and you're good to go.
Debt + unfunded obligations = 242T.
Uncle Sam has reneged on his obligations before. He will (is -- ref. SS) do it again.
True but if the printing press funding for EBT stops for more time than it takes to get hungry, the whole place is going to burn to the ground.
If we can't pay down the debt, maybe we can pray it down!
Or hope it down.
One massive QE could theoretically do it if it is channeled clearly, just as quickly as minting a few hundred trillion dollar coins would do.
Back in 1989, when Lotus 123 still dominated the upstart Microsoft Excel, a spreadsheet program called "Javelin" appeared that offered an intuitive time-series modeling framework using names rather than 2-dimentional cell locations. By the time before Ross Perot came on the scene, I had built a model of the macro-level of GDP, tax rates, revenues, expenditures, demographics, and Government deficits and debt. Admittedly fed by my conservative interpretation of data and trends, I drew the same conclusions you have.
dbTX: The Rubicon was crossed circa 1990 (with kind appreciation to those who think 1913), and Rome is burning. I fear for my family in the medium term, while hoping for better days as the technological Singularity approaches.
there were only 2 ways out of it: inflate or default. i don't think default is something they would ever touch. they'd rather literallly print $18 trillion fresh dollar bills & drop it off on japan, china, the fed, and whoever else holds our debt's doorsteps.
on the glass 1/2-full side, looks like bernanke & yellen may have inadvertantly pulled-off the single greatest trade in history of mankind - the way things are going, the U.S. 10-year is gonna be breaking 2.00% pretty soon on its way to 1.00%. she's long & strong what, $4.5 trillion??? her P&L gonna start throttling soon the more fucked we get.
oh, and if 1 more person on CNBC says "the move in oil is a good thing" or "its a tax cut" my heads gonna explode. guess they forgot how lehman got started.
all i know is sold 1/2 my 401k when the SPY were at 190.00 and the other 1/2 at 205.00. between at 190 when i thought "it" was starting (moved higher) and at 205.00 when japan revised their shit GDP lower, china & european data falling off a cliff, and the U.S. 10-Year dead-cat bouncing & now breaking the "capitulation-day-low" - that was it for me. ill continue to add every month of fresh $$$ from paychecks to markets, but i already watched my 401k gets sawed in 1/2 once. dow can go to 50,000 and i won't blink with that $$$. hardest thing last time was to NOT sell & just watch it get burried & HOPE it came back. well, it did and im taking my chips off the table & saying thank you to the fed for pumping that balloon back up. this thing will get donkey-punched again and when it does, i firmly believe they will come in & straight-up buy equities (and tell people about it). at that point, ill go all back in because thats when the real inflation will kick-in because they will just start basically nationalizing U.S. compaines with printed $$$ because they will be they will be the only entities making any real $$$ (since all the sovereigns are friggin broke already) but they will all continue to trade under the "guise" of capitalism (ie. stock exchanges), hence forcing the dow to 100,000. we'll have 75% of the country on food stamps but whoever's in office will say how great the economy is because the market is up a gazillion % since they took office.
what a sad way to see a global economy run
nationalize the fed and erase the debt
Are you insane? END THE FED and ERASE THE DEBT!
If you actually believe that you should be buying LEAP calls, not equities.
Correct, but think outside the box. How will they default. Here's my guess.
Below is the story; There's An Electronic Currency That Could Save The Economy — And It's Not Bitcoin, in it’s entirety by Danny Vinik originally published in the Business Insider:
The United States has been marred in slow economic growth and a weak recovery for years now. Unemployment remains high. This is despite extraordinary efforts by the Federal Reserve to stimulate the economy. This drawn out period of low inflation and high unemployment has gotten more and more people talking about a "new normal" of mediocre growth.
Economists have been looking for ways to give central banks more power to combat recessions and prevent these long, drawn out recoveries. Larry Summers laid out this major impending economic challenge in his recent speech at the IMF. Normally, when a recession hits, central banks cut interest rates to incentivize firms to invest and to spur economic growth. But when interest rates hit zero, those banks lose one of their most important tools to combat recessions. This is called the zero lower bound.
Hitting the zero-lower bound means that interest rates cannot reach their natural equilibrium where desired investment equals desired savings. Instead, even at zero, interest rates are too high, leading to too much saving and a lack of demand. Thus we get the slow recovery.
Until recently, we hadn't hit that bound. But since the Great Recession, we've been stuck up against it and the Fed has been forced to use unconventional policy tools instead. What Summers warned of is that this may become the new normal. When the next recession hits, interest rates are likely to be barely above zero. The Fed will cut them and we'll find ourselves up against the zero lower bound yet again and face yet another slow recovery.
So what's the answer?
University of Michigan economist Miles Kimball has developed a theoretical solution to this problem in the form of a new electronic currency that would allow the Fed to bring nominal rates below zero to combat recessions. He's been presenting his plan to different economists and central bankers around the world. Kimball has also written repeatedly about it and was recently interviewed by Wonkblog's Dylan Matthews.
"If you have a bad recession, then firms are afraid to invest," he told Business Insider. "You have to give people a pretty good deal to make them willing to invest and that good deal means that the borrowers actually have to be paid to tend the money for the savers."
But paper currency makes this impossible.
"You have this tradition that as it is now is enshrined in law in various ways that the government is going to guarantee to all savers that they will get [at least] a zero interest," Kimball said.
If the Fed lowered rates below zero in our current financial system, savers would simply withdraw their money from the bank and sit on it instead of letting it incur negative returns. The paper currency itself — because it's something that can be physically withdrawn from the financial system — prevents rates from going negative.
This is where Kimball's idea for an electronic currency comes in. However, unlike Bitcoin, which prides itself on its decentralization and anonymity, Kimball's digital currency would be centralized and widely used. He would effectively set up two different types of currencies: dollars and e-dollars. Right now, your $100 bill is equal to the $100 in the bank. If you're bank account has a 5% interest rate, you earn $5 of interest in a year and that $100 bill is still worth $100. But what would happen if that interest were -5%? Then you would lose $5 over the course of the year. Knowing this, you would rationally withdraw the $100 ahead of time and keep it out of the bank. This is where the separate currencies come in.
"You have to do something a little bit more to get the negative rate on the paper currency," Kimball said. "You have to have the $100 bill be worth $95 a year later in order to have a -5% interest rate. The idea is to arrange things so let’s say $100 in the bank equals $100 in paper currency now, but in a year, $95 in the bank is equal to $100 in paper currency. You have an exchange rate between them."
"After a year, I could take $95 out of the bank and get a $100 bill or if I wanted to put a $100 bill into the bank, they would credit my account with $95."
Got that? After a year of a -5% interest rate, $100 dollars are equal to $95 e-dollars. This ensures that paper currency also faces a negative interest rate as well and eliminates the incentive for savers to hoard dollar bills if the Fed implements a negative rate. Presto! The zero lower bound is solved.
The benefits of this policy go even further though: We can say goodbye to inflation as well.
"Once you take away the zero lower bound, there isn't a really strong reason to have 2% inflation at this point," Kimball said. "The major central banks around the world have 2% inflation and Ben Bernanke explained very clearly why that is. It's to steer away from the zero lower bound."
He's right. Back in March, Ryan Avent asked Bernanke why not have a zero percent inflation target. Bernanke answered, "[I] f you have zero inflation, you’re very close to the deflation zone and nominal interest rates will be so low that it would be very difficult to respond fully to recessions."
But if nominal interest rates are allowed to go below zero, then the Fed has ample room to respond to recessions even if rates start out low. This is another major benefit from eliminating the zero lower bound.
What Kimball, whose blog is titled Confessions of a Supply Side Liberal, is most excited about is moving beyond the demand shortfall the economy currently faces to the supply side issues that hold back long-term growth.
"If you care at all about the future of this country, one of the things you need to realize is we need to solve the demand side so we can get back to the supply side issues that are really the tricky thing for the long run," he said. "The way to solve the demand side issues that is the most consistent with not messing up our supply side is monetary policy and making it so we can have negative interest rates."
At the moment, e-dollars are still only a theoretical concept, but Kimball is hopeful that they could be put into action in the near future. He believes that if a government bought in, it could be using an electronic currency in three years and reap the benefits of it soon after.
"This is going to happen some day," he concluded. "Let me tell you why. There are a lot of countries in the world and some country is going to do this and it's going to be a whole lot easier for other countries to do it once some country has stepped out."
Talk about a patch! There are plenty of problems with this article such as how they don’t indicate why borrowers will not borrow to invest, but we know it is because there is already too much debt. They also use the word invest in place of what should be the word borrow. Insert borrow for invest and the story will make more sense. The cause of the slowing or stopping of borrowing to invest is not some strange physiological new normal; it’s a rational realization that the nation as a whole, in all sectors, already has borrowed enough. But this solution makes perfect sense for central planners in the Fed, member banks, and the government. So much so that I think it is going to be put in place in the not so distant future, although that’s just an educated guess.
The reasons start with the fact that this plan maintains the unbreakable covenant of changing monetary systems, the powers that be, the government and the banks get stronger. After a number of years eventually paper dollars would lose so much valve they would go extinct.
The list of ways this helps the government is long. First, since eventually the old paper dollar would go extinct and all commerce would be electronic, it would be easy for the government to track money thus easier to tax. This would certainly please tax and spend liberals who try and vilify anyone who attempts to avoid taxes, even though that is what this nation was founded on.
Another benefit of being able to track the new e-dollars is black market transactions in dollars would disappear. This would delight right of center. Without cash, illegal drug trade would have a major barrier. An even a bigger feather to the right is that it would be more difficult for people to hide secondary income thus take advantage of entitlements while working “under the table”. Illegal immigrates would also have a much more difficult time living in the US, talk about a plus for the conservatives. The government also wouldn’t need to spend money to create new bills and coinage.
Finally the biggest pro is the governmental debt will be priced in the “old” dollars, meaning the burden of the national debt would decrease by as much as the Fed decides to set the negative interest rate at annually.
So we’ve pleased both sides of the isle, now on to the banks.
Well the benefit to the banks is quite clear, not only are you forced to keep your savings with them to speculate with and collect their standard fees on, but they also will be able to charge you interest for the privilege.
Some of the concerns that run a distant third, those of the people of the United States COULD also be addressed. I emphasize COULD because they will only help a certain portion of the population and only if the powers in the government and banks feel as if they need more popular support for the E dollar. As with the government debt, the new system COULD allow ALL old debt to be priced in the old dollars thus lessening the burden on anyone holding previous debts, and with a large portion of the population with underwater home mortgages and huge student loans I’m sure the relief would be welcome.
The losers in this would be those who were prudent and didn’t take on large debts but since there are far more debtors then savers, politically the plan would still be a winner. I have to admit before learning the truth about our system I racked up my fair share of debt and a little piece of me would be relieved.
Though I think the Government would allow all debt to be priced in the old dollars the only debt that must be would be the government debt. It would certainly be fairer to price all old debt in the old dollars, but I would not be surprised if the banks were able to use their substantial influence to swap old debts into the gradually more valuable E Dollar. This is historically what has taken place when there have been failed currencies, and even though the debt agreements may have been made in those currencies the banks attempted, and were often successful in demanding payment in gold. Even the most powerful such as President Thomas Jefferson was subject to such a debt payment.
at that point, ill go all back in because thats when the real inflation will kick-in because they will just start basically nationalizing U.S. compaines with printed $$$ because they will be they will be the only entities making any real $$$
Think you'll get a chance to buy what they are holding?
Merry Xmas,
DTCC & Cede
It's impossible to pay off the debt in a debt-money system. The Rubicon was crossed back in 1913.
Fuck you Woodrow Wilson.
nationalize the fed and erase the debt
Please include the Rothchilds and other primary bank historic controllers.
Here's what Wilson said after he was blackmailed by Warburg into signing.
This is from “The New Freedom: A Call for the Emancipation of the Generous Energies of a People: “
"However it has come about, it is more important still that the control of credit also has become dangerously centralized.
It is the mere truth to say that the financial resources of the country are not at the command of those who do not submit to the direction and domination of small groups of capitalists who wish to keep the economic development of the country under their own eye and guidance.
The great monopoly in this country is the monopoly of big credits. So long as that exists, our old variety and freedom and individual energy of development are out of the question.
A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men who, even if their action be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved and who necessarily, by very reason of their own limitations, chill and check and destroy genuine economic freedom.
This is the greatest question of all, and to this statesmen must address themselves with an earnest determination to serve the long future and the true liberties of men.This money trust, or, as it should be more properly called, this credit trust, of which Congress has begun an investigation, is no myth; it is no imaginary thing. It is not an ordinary trust like another. It doesn’t do business every day. It does business only when there is occasion to do business.
You can sometimes do something large when it isn’t watching, but when it is watching, you can’t do much. And I have seen men squeezed by it; I have seen men who, as they themselves expressed it, were put “out of business by Wall Street,” because Wall Street found them inconvenient and didn’t want their competition. -Benedict Woodrow Wilson
"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men." -Woodrow Wilson, after signing the Federal Reserve into existence
Wilsons lament was in relation to the US and the FED creation. That relation has now been extended to the FED as the Central Bank to the World.
Foreitn subsidiary bank coverage in US, SWAPS, FUTURES, the BIS, Bank of Japan, Bank of Chica, EU Central Bank, as ell as all Major Industrial Countty Central Banks.
Like the famous Sherwin Williams paint company ad - THE FED NOW COVERS THE WORLD. There can never be a failure of any large industrial Country Central Bank that is currently under the protection of the FED.
Wasn't Woodrow Wilson a liberal progressive Democrat ?
And Roosevelt ? New Deal, Social Security, etc
And Johnson ? War on Poverty, etc
And Obama ? Socialist Health Insurance
stupid article. in a debt based monetary system, which is what we have, you are not suppose to pay off the debt. because the debt is the money supply. paying off all debt would mean there would be no money in circulation.
bingo.
Retarded article just meant to poke the proverbial beehive.
Yeah but I used to love doing that. Yellow jackets are some mean ass MF'ers when you mess with their hole in the ground.
pods
Well I was thinking the treasury should charge the FED to hold TBILLs.
NIRP works both ways mother fuckers.
As to nationalizing the FED - why not. The US getting ready to nationalize 401K's etc.
Regarding paying anything back. If anyone would bother to do the calculation on what $1T means they'd have understood how ludricous the idea of paying down the now nearly 20T of national debt is.
Hint every working US citizen working at $10/hr full time with 100% taxes barely touches $1T in a YEAR. If you think the US still exports something if you count star search, and a few movies then maybe. Otherwise NO we import way more than we export.
American value is the markup on Chinese value.
Pay off the debt yeah. ANyone remember how much whining went on in like 1998, 1999 when the US was about to run a surplus and start buying bonds back.. LMAO That was such a BIG problem they had to stop that shit cold within a year..
Tell us some more zerohedge. God the bullshit is really deep around here.
OldE_Ant
Stick thunderbombs in and run... Wait for them to calm down and do it again, there is a corollary here somewhere
The real value of the debt can always be paid down by devaluation of the currency.
I think you meant to say, zero-sum game.
That was the whole point. Get it so high that it becomes an august charter member to that very very exclusive club along with the Financial Biggies, TOO BIG TOO FAIL.
"They could default on the Federal Reserve, which owns trillions of dollars of US debt. But this would create an epic currency crisis for the US dollar"
Here, let me fix that...
"They could default on the Federal Reserve, which owns trillions of dollars of US debt. But this would create an epic currency crisis for the FEDERAL RESERVE NOTE."
The U.S. Dollar is a silver coin weighing no less than 371.25 grains of pure silver.
who are you?
My hero
Uncle Scam will continue putting millions of illegals on welfare and others on Social Security disability.
Bernanke and Yellen assured the government they will continue printing. Printing until the US dollar free-falls.
One possibility that you left out... A mountain sized pure gold asteroid hits DC.
nationalize the fed and erase the debt
The only solution historically to a debt problem is death, or sudden population reduction. Either by war or some other massive hazzard.
nationalize the fed and erase the debt
What good would that do. To nationalize them would that the big banks would own them. The Fed is only there for the big banks.
Me thinks you are up-arrowing your own comments. That's like masturbating in public...STOP IT!
The phrase "We owe it to ourselves" is specious and tells us nothing.
In truth, productive people who are net tax PAYERS owe it to those who are net BENEFIT COLLECTORS. The latter group includes people who lent to the government.
There is no "we" or "ourselves".
Good morning! I see you've been asleep for the last 8 years.
Here's the funny thing - when the Federal Reserve magically forgives all the treasury debt it holds - people will go right on as if nothing happened. Rationally they should abandon the dollar as a store of value, but if people were rational we wouldn't be here now would we Alice?
Debt forgiveness to the big boys won't work anymore with the current communications technology. Popular uprising would lynch them. Now the only way to do this would be to first disable all communications.
Ahh but it will. They just guaranteed banks against losses in derivatives trading and there's no marching with pitchforks in D.C. We're good with it! Keep the EBT card charged up, refill my anti-depressants prescription, what's new on Netflix?
If the Fed were to buy all Federal debt the month before it matured, then shred the contracts (bonds, T-bills, etc.), no new money (wealth) would be created, the Treasury would not have to sell new debt to specifically pay off old debt (refunding), and the National Debt could slowly decline.
The reason it's not done, I think, is that it would give Congress a huge incentive to lower corporate taxes and inheritance taxes to zero and quadruple the Defense budget, thereby increasing new money and debt way faster than the economy could handle without inflation.
Ditto the trillion-dollar coins paying off the debt.
Congress' most powerful excuse to cut all benefits and ream those who can't afford lobbyists is "but, but, but the debt is outta control!!!" So love your 18 trillion while it lasts. It'll be 180 trillion next decade!
Rampant inflation. It leaves all contractual commitments intact and thus leaves the politicians blameless (ha).
Every other option gets someone in trouble, and they hate that.
Decades of misguided fiscal and monetary policy has brought us to this. We've been in a depression since 2007. The establishment continues to work hard at covering this up. You can't cover up a sickness forever. Eventually the sick person will collapse and everyone will know that there is a problem. I believe that Jim Rickard's explanation is spot on for what we are actually in the middle of. He was an insider and apparently now he is an outsider (I say outsider because he's blowing the whistle and pointing out that the king is no longer wearing any clothes). I agree with him. My big question? How to most effectively prepare for the future? Actually, maybe it is more accurate to ask, "How do I prepare for the now?" because the future is here. We are in a DEPRESSION. Things will go lower and it will last for decades.
http://dailyreckoning.com/welcome-new-depression/
Deciphering the Shape of Economic Recovery
Some philosophy:
Numbers don't exist...ever touched a number ?
Gold and Silver exist as tangibles.
Next question ?
(Math is one of my favorite subjects)
Please keep your hands and feet inside the car at all times.
Time is fleeting...
Escaping an endless debt spiral and resulting financial ruin became impossible in 1913 with the creation of the Fed.
And let's not forget, in the minds of sociopathic banksters, all problems can be solved with MOAR WAR. Trade wars, currency wars, WORLD WARS.
First and foremost, American can pay off its total indebtedness without bankruptcy; but it would require a radical shift in our fiscal priorities and a strong dose of nationalism to do so.
First, impose a massive tariff on all goods and services coming into the United States. The rate should be punitive: at least 30% but not more than 50% of the cost of good service as delivered to its end user, minus whatever wages were paid to people living inside the United States, who are physically involved in the transport/delivery of those goods and services to the end user. To be fair and to prevent loopholes, the same rate should be paid on everything from everywhere outside the United States and its territories.
Second, encourage inflow of capital into the country. No taxes, no restrictions as to sources and amounts of capital coming into the country. And, impose mandatory withholding of 30% of cash being taken out of the country.
Third, impose a flat tax of 30% on all personal income above $12,000 per person in a household. Eliminate all itemized deductions and tax credits. (Example: 3 persons live in same address can file jointly and collectively deduct $36,000 from their collective income before the 30% tax rate is imposed.) Eliminate the requirement that people filing jointly must be married, related, or dependents of other persons within the household.
Fourth, convert to a cash-basis for accounting for investments and businesses. Put an end to depreciation, amortization, deferred income/compensation and expenses, tax credits and stock options. Money spent for business and investment purposes are to be expensed against income. Money received from business operations and the sale of assets will be considered as income.
Fifth, merge the Federal Reserve into the US Treasury. The Treasury will no longer issue sovereign debt. The Treasury will simply write checks against the flow of tax revenues, and -where this is insufficient- write checks against future revenues. As Treasury bonds mature they will paid by checks written against the US Treasury; and as necessary, these checks will be written against future tax revenues. In essence, the debt of the United States Treasury will be converted into an investment in the United States or used to purchase something made in the United States..
Taken together, these measure assure that the amount of wealth and money created by economic activity generated by the U.S.A. will stay in the U.S.A. The wealth-bleeding effect of off-shore tactics and transfer-pricing by individuals and corporations will be cut off. And America must either pay as we go, or the entire economy -meaning us- will directly absorb the effects of dollar devaluation.
We would all be in it together.
First and foremost, your plan does not include the long term results of such stated policy. One of which would be the 80% that hold the debt would burn the country down in a matter of weeks, whilst the 20 percent who are well off enough to care less, would be in their enclaves on foreign soil until things cooled off, waiting, understandably, for the "buy low" signal to come about.
Gotta say it's a nice dream, but the outcome would be horrific. Good Luck!
It is a nice dream, isn't it?
But if 60% of Republicans elected to the Congress were like Ron Paul, Ross Perot, and Teddy Roosevelt, and if 60% majority of Democrats elected to Congress were like Gerry Brown, Dennis Kucinich, and Andrew Jackson, something very close to this could be put together.
You see, "Nationalism" isn't right-wing or Left-wing. It isn't xenophobic nor imperialist. It is "Country First!" and "People First!".
If...Big if!...America was goverened as a truly "one man = one vote" republic, the "greatest good for the greatest number of people" would prevail over time.
Prohibit political contributions by foreigners, dual-citizens, corporate entities, PACs and advocacy groups. Limit not the amount of dollars an individual can contribute to political campaigns; but restrict such donations to only those elections in which the individual is eligible to vote in. Then, we will have one man=one vote in this country.
The economic system is not air-tight or water-tight. There is an avenue for money to leave the country or for imports to come in. But there is simply going to be an established price for doing so. Freedom of choice and ideas, economic freedom and healthy competition would still thrive within.
We would all pay the same tax rate, minus allowances for basic subsistence. We would all have to pay the equivalent of additional income tax, if we bought goods/services made/provided by/through imports. The inflation effect of deficit spending, and of paying off our debts with what amounts to vouchers to buy stuff made in America, would be borne equally by all Americans. And the capital controls to keep the money in America that was "made in America", would boost the growth rate of the American economy toward maximum potential.
Mentioning Ron Paul in the same sentence as Teddy Roosevelt signals to me that you have no understanding of either man.
And it's an insult to Dr. Paul.
Roosevelt was a war-mongering progressive nightmare who laid the groundwork in the Pacific for what happened in 1941. He was just another fucking lunatic psychopath from one of the families most responsible for wrecking this country.
Dr. Paul would not bakc any sort of nationalism. Of course if you actually read his words that might help. The man is also for the elimination of "taxes" as outlined in your proposal.
Just sayin'
And by the way I have no interest in any "solution" that is either shared or "borne equally by all Americans" I didn't have a hand in creating this shit mess, have never contributed to it, voted for it, or otherwise condoned it, profited from it, or benefitted at all from the so-called birth lottery of having to forcibly have a SS number and a US passport so I say let those who fucked it all up pay the tab and make the sacrifices. And to those who are dead, then their heirs can fork it over.
Otherwise LET IT FUCKING BURN.
Oh, and what you propose is just a flowery version of Fascism.
IF YOU equate "nationalism" with "fascism", then you are correct. It would be fascism in that sense. Similarly, Jews equate anti-zionism (the Jewish variant of fascism) with anti-semitism. So in that sense, there is a moral imperative to be "anti-semitic".
I refer you to the "New Nationalism" speech, delivered on Aigust 31st 1910 at Osawatomie, Kansas by Theodore Roosevelt. He praised those who created great wealth for themselves but descried the tendency for such people to garner too much wealth without consideration for the fate of those around them. TR was also anti-union because he thought that government should be the ultimate protector of the "Common Man" from predatory practices of employers. Henry Ford agreed with him and gave -not just a living wage, but a middle class wage- to his employees. Ford's example induced George Eastman and Harvey Firestone to do the same. Eventually, Thomas Edison (GE) went along with them. These men were not nazis and they were not commies, either. They were "patriots" (an euphemistic substitute for nationalists that you may prefer).
Ron Paul was not against taxes, per se. He was against the abuses of government that use the tax system to reward some and to punish others. He was opposed to government intrusion into private affairs. He opposed imperialist ventures in the Middle East, which are the foundation for our interminable war to enforce the "New World Order". And above all, he would support the decisions arrived at democratically by ourgovernment, respectfully disagreeing with some of those decisions, I am sure.
All the political figures that I included were chosen because they were patriots who called for fair play and decency for the entire body politic. I am surprised that you did not single out Andrew Jackson, who was an egregious racist and true believer in our "manifest destiny". But he was a populist, who didn't like foreign meddling and big banksters.
If you consider calling for a new democratic consensus among politicians, who put nation first over the interests of privateers, speculators, and foreigners, to be "NAZI", then you are part of the problem. As a citizen, who votes in elections, pays taxes, and lives in this country, you are gaining considerable benefit from the economic system within the United States, its social order, and the protections and opportunites it provides for its citizens....you and me, plus everybody else who live in this country.
America has its problems. The enormous debt burden is one of its biggest. It needs to be addressed by us all as a nation. No one should be excused, least of all, those who have supported wars and international interventions on one side, or social welfare on the other, or minority rights and worker safety regulations in between. It is our country and it is our burden. Come! Share it with your fellow countrymen.
If your plan is ever implemented, please wear a large red dot on your chest & back when you go out in public so that you can get proper "credit" from the victims of your proposal.
Can we all wear those hsarp brown shirts as well? Perhaps with some sort of cool symbol on it?
Hey the Obammy campaign symbol looks cool.
Your comment/"solution" is a redux of the kind of thing that brought about "the good war".
And guess what! That's where it would (will since some of the shit is already in the making) lead. Just think we can have another "greatest generation", pat ourselves on the back for how great we are and incinerate another few million civilians thousands of miles away so we can pump up-or prop up-our military/banking crime syndicate!
Fuck yeah Amerika!
Fucking nonsense.What you have outlined is akin to living within the boundaries of a Mob boss and providing the solution to the woes of that microcosim as further empowering said crime syndicate and further destroying what little wealth and liberty anyone has left.
By the way you can CONFISCATE all the wealth of the multis and not even make a dent in the annual budget much less pay debt.
"Paying down the debt is Now almost mathematically Impossible"?....
How is it possible that the shit head making this statement now didn't figure out the math and the foreign policy objectives of the U.S. government in the looting and murder department(s) in the Middle East and Eastern Europe since the banker bailouts in '08?...
Simon buddy!....
Yeah.
I'll have to agree with you that I think it's pretty clear to those doing business with the United States these days that the Hart Schaffner and Marx suits have been traded in long ago for a pair of polyurethane camo and that since '08 it was pretty clear that we never had any intention whatsoever of making the interest payment(s) on both those short and long term bonds!
Just goes to show how worthless Simon Black is.
SSSHHH or you will have an unlimited stay at a re-education camp.
Debth knell.
here is how i look at it (did QE, or gov't intervention work) - From 2008-20130GDP grew from $14,718 to $16,768. Aggregating additional annual GDP over the base $14,718 shows aggregated GDP (over $14,718) of $4.2T. As for Debt: (slight mismatch it dates but...) debt grew from $10,025B 9/30/08 to $16,768B on 9/30/13, for net growth of $6.7T. $6.7T in new debt to receive $4.2T in incremental GDP?
Sure there are a million ways to look a this number with valid arguments on both sides, but still......
They could just pay the debt with all that deep storage gold. Just lay claim to all the gold ever produced anywhere, then work out a payment plan.
Not to worry! There is a simple two word solution for this problem - "bail in." There, all fixed...
Most costly, endless, and self-destructive war ever: War on Poverty
"None of these is a good option. And simply put, the US government has reached a point of no return."
How about we get the fuck out of about 150 different countries, close the bases, cut FEDGOV and STATE gov by about 60% and then get back to some semblence of a viable peace loving country.
P < P + I. New debt must be issued or else!
There is a simple solution.
Have the Fed buy all the outstanding debt with printed (digitally created) money and, as per existing arrangments, the interest paid on that debt owed to Fed is then rebated back to U.S. Treasury. Fed already owns 13 precent of our debt, and the interest paid on that 13 percent is paid back to govt. https://www.nationalpriorities.org/campaigns/us-federal-debt-who/?gclid=CJGY8c6bwcICFQsSMgodZ10ASA
But I'm sure everyone here would rather freak out about a debt that has never been paid and will never be paid, go for the drama and waste of taxpayer dollars if you want, but there is no need for a soveriegn country that produces its own currency to fear their debt - the only thing that should be feared inflation and speculative finance with low interest money - those are internal policy issues a soveriegn democracy can address as they see fit - but paying interest to foreigners to finance something
Why pay it off at all? PARTY ON BITCHEZ! The sheeple will guarantee the bills........if there is a tomorrow!
LMAO
Am new to ZH, did not know it is a premiere comedy site ...
what fools actually believed that the politicians ever intended that the gubmint debt, ie vote-buying expense account, would ever be paid off ???
the chinese?
Good reply, but "buyer beware" !
"Default has become the only option. And that could mean a number of things."
Unfortunately, this is wrong. I am wondering if the author of this piece heard of Alicia Munnell, who was an economic advisor to Bill Clinton in 1993.
http://www.nysun.com/comments/25284
excerpt: (this is alarming stuff here)
---------------------------------------------
"Alicia Munnell was an economist with the Federal Reserve Bank of Boston when she proposed a tax on private pensions in an article which appeared in the New England Economic Review (Jan-Feb 1992). Then in 1993 she was brought into the Clinton Administration as an economic advisor.
Now this is scary. Munnell proposed a one time 15% tax on the value of ALL private pensions including your IRA, 401k, all state pension funds, and private pension funds. This would have given the government a one time $600 billion to $1 trillion windfall. THEN Munnell proposed a tax on the earnings made within your IRA/401k -- - - which would have KILLED the majic of compound interest. Not done yet, Munnell wanted to tax the employers contritution to your 401k."
----------------------------------------------
The amount of money this sort of seizure could generate today would be much, much larger than what it would have generated in 1993. The (proposed) 15% target could also be ratcheted up as deemed necessary. Munnell wanted the money to be injected into the Social Security system at that time, but the money could be directed to address the national debt today.
Don't be too shocked if this sort of idea gets floated again... in the name of "national security" to stave off a "national fiscal crisis". If Hillary Clinton is the next POTUS, someone like Alicia Munnell might be eagerly awaiting a position in her administration.
FUBAR_to_Hell
IIRC, BCG was pitching this theme a few years back.
piketty and graeber have a go at it.
Even if they went this route, it would not make the government solvent. At best it would only allow them to kick the can a while longer.
As of the 3rd quarter of 2014, the total net worth of households and non-profit groups in the U.S. was approximately $81.3 Trillion. If the wealth seizure were large enough, the current debt could be eradicated. That would be an extreme case, but it would not be shocking if this general idea gains traction. The powers that be are not going to fold up their tents and close up shop without considering all their options to raise revenue.
It would be the last throw of the dice as all faith in the economic system vanishes.
"Bully Mexico"? Really? You don't know your history as well as you think you do.
Did anyone believe they could kick the can for this long? Nothing that happens surprises me anymore.
DEBT IS PAYED IN BANKER'S BLOOD !
do you agree ?
yes, we can all afford that
It is always and forever an impossibility to pay down debts in a credit money system. Our existing system is about 97% credit as money.
Money as Credit has a debt instrument on its other side. In other words, our credit as money is hypothecated into existence at the moment when loan transacts. When the credit returns to ledger, a positive number meets a negative number, and the “Credit” vanishes from existence. What came from nothing returns to nothing.
Debt instruments grow as a mathematical function related to usury or compounding exponentially by rolling over the usury into new debt instruments. This is how Greece got into trouble, by rolling over their debt. It is impossible to make enough goods as prices to then attract money out of supply, to then pay down exponential debt instruments.
Therefore the credit as money that is created cannot return to destroy the debt instrument. It is an impossibility because the instrument’s demands have now increased in ratio relative to money in supply. People here may know the ratio of debt to money in supply. I’m sure it is a very large number.
Who holds the debt instruments? Typically it is finance; those who create debt instruments at moment of hypothecation.
Debt instruments are of different types, so we should be talking about instruments nature. For example, If wall street engages in a scheme to lift jobs out of the U.S. and send to China, to then take wage arbitrage, and those now Chinese dollars eventually recycle to buy TBills – that should be considered onerous debt and therefore void. VOID.
The jobs lost and transfer of knowledge more than offsets the debt claims formed. In fact, buying TBILLS in the scheme spins the dollars out into U.S. government (if they deficit spend to make more TBills), and then U.S. government spends on unemployment so the unemployed can buy more Chinese crap, while simultaneously keeping the dollar strong to then destroy more U.S. jobs in trade deficit.
Or What about DEBTS created through re-hypothecations such as that during the housing bubble? That distorted asset prices and then the banker criminals were rewarded with QE.
We will need a legal entity to be formed to then look at the DEBTS and figure out which ones are onerous and illegal. Those debts need to be erased. ERASED not paid off. Legally torn up and flushed.
Then we will need a new type of money system. I prefer a sovereign money system. This changes the nature of money from “credit” to “wealth” and would have tremendous knock on effects, remaking society. Private Creditors have shown their hand, the money power should be stripped away from them.
http://sovereignmoney.eu/. With this type of system you can also have a dividend such that labor is rewarded for being a beneficiary of productivity of past inventors and machine production. Financial Capitalism and debt type money distributes to finance, not to producers.
Sovereign credit in the system can be aimed at the commons and productivity. So some credit is good, but it must be the right type.
Yes a reasoned argument but the solution won't work, there has to be enough muppets first willing to walk out of corrupted financial capitalist system and move to tangibles. At the same time, agitating for return of locked savings.
When this takes place, let the 1% play with each other with the next tier of the 9% being gobbled by the 0.1%. Engendering cannibalism.
Interesting, but you're confusing two issues:
1) the debt-money system
2) the way capitalism distributes rewards ("to finance, not to producers")
These are two independent problems. Believe me, the elite would figure out a way to keep #2 intact even without #1, and vice-versa. Even in a "sovereign" monetary system, you must have lenders and borrowers if you're going to have capitalism. And if you dont' have capitalism (and financial markets) then how are you going to direct investment? Central planning does not work.
#2 is the more important problem, and MUST be faced this century, as increasing automation causes structural unemployment to approach 100%. How are we going to distribute rewards, when NO ONE is producing because the machines are doing all the work? Humanity will eventually face this moment... and the Old Testament/conservative "work in order to eat" paradigm will suffer a massive public coronary.
Money can be directly injected into famiies or perhaps state government. They then have political control over it as it serves their political interests.
This is key in order to keep pyschopaths from having money power.
Also, money circulates on its own and is not recalled to the ledger at a high rate (as with credit). Therefore, some savings are then allowed, and hence the brain centers of the population become less pathological.
A return or a injection from our productivity is necessary as labor becomes less and less part of production. Gifts of the past and wealth from the commons ar everybody's inherintance.
So, to dismiss workable solutions as unworkable is not a good starting point... despairing is not a solution.
Lenders and borrowers are creditors and debtors. Credit and debt relations can be canceled with goods or with money. Credit and Debts cancel each other and if money is used, it can spin out to cancel yet more credit/debt relations.
Government is the most efficient actor in its sector. It needs to be limited to its sector only...and the commons are part of its responsibility.
All economies are planned, and those that don't plan are taken over by money powers. In the Case of the U.S. it is private money power led by wall street.
I passed the point of no return once I realized that Santa Claus is just a story to make chillins feel better.
...yes, but as an adult, you have recourse to the Flying Spaghetti Monster.
All is well!
Paying down global debt IS mathematically impossible. Paying down US debt is practically impossible. It's a debt bubble of historic proportions...
http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...
For me, and I think for most americans as a driving culture, the best understanding of a trillion dollars is driving for over an hour, legal freway speed, along not a concrete curb but tightly packed $1,000 (thousand) dollar bills 67.9 miles long.
Before the math I guessed as being no longer than a City block !
At one time a billion dollars was a lot of money and it still is. Most people that haven't given it much thought might not think so considering how modern media and politicians throw the "B" word around. On several occasions I have heard both Washington politicians and the news media accidentally confuse a billion dollars with its much smaller sister the million marker.
This drives me crazy. With a billion dollars being a thousand time larger this confusion is undefendable. The article below is a primmer on the ugly math of our debt delving into how much it cost each and every American when the government spends a billion dollar.
http://brucewilds.blogspot.com/2014/10/an-ugly-math-primer-on-american-debt.html
Correct - unless the total amount owed fails to be paid when it becomes due at note experation time. Then all bets are off. Lehman is a prime example on a small scale, when compared to sovereign states, including the US
Except that regimes have unique special powers that Lehman did not have:
Regimes can create new debt
Regimes can buy their own debt
Regimes can create money
Regimes can roll-over maturing debt
Therefore, for regimes, the judgement day of having to actually repay principal can be many, many, many hman generations, literally centuries, away, depending upon economic and exogenous factors.
The only problem with this argument is that the government has never defaulted on its debt, and probably never will.
...whereas "subprime" loan holders regularly default.
The interest rates on loans reflect this (vast) difference.
So
either you are Edgar Cayce or you and the kids are still enjoying your holiday along de Nile.
lets just do it the way the federal reserve, and politicians did it in 1913, pass a law, this time dissolving the federal reserve, retro-active back till 1912.
It's only impossible politically, insofar as no one ever wants to cut spending.
If the political will existed, it would be very simple.
Not almost, it is impossible.If there was no debt, there would be no money.
Ah, that old bit of monetary crankery..
Paying off the debt would not somehow magically "destroy" money. If the government borrows less, all that means is that the money which it would have received from Treasury buyers is still in the hands of those Treasury buyers - available to buy something else. It doesn't disappear.
sorry to break the news to you but you are wrong. We have a debt based monetary system. In a debt based monetary system all money is debt. if all debts were paid off there would be no money in existance.
And how exactly is money destroyed when debt is repaid?
Explain the actual process.
Mike Maloney
https://www.youtube.com/watch?v=iFDe5kUUyT0
I think there is some (understandable) confusion; money (a unit of value) and currency (a promissory note) are very different.
You seem confused... currency does not need to be a promissory note (pennies and dimes are not promissory notes) and a promissory note certainly does not need to be used as "currency" to exist, even if that is how we use them today.
I'm referring to fiat currency vs. money. And yes, coin is also a type of promissory note, it's just in a different form than a paper note.
It is removed from circulation.
When a note is retired, i.e. returned to its issuer, it is no longer in circulation and so no longer functions as "money."
Interest payments to the Federal Reserve Bank take money out of circulation.
Of course, most of the time, more notes are issued than are retired... but "money" is being destroyed nonetheless.
Huh? What "note" are you talking about? Treasuries do not circulate as money in the first place, so when they mature and cease to exist, no money is drawn out of circulation. Money = federal reserve notes, treasury coins, or demand deposits, and they are not "returned to their issuer" when they're used to repay a debt, they just change hands (the same as when anything else is bought and sold).
Let me explain how it works with a simplified example.
Suppose the national debt is $1000 and the budget is balanced. Every year the government rolls over the full $1000. But then one year the government decides to start shrinking the debt. So it increases taxes by $100, and when the time comes to roll over the $1000 national debt, it only rolls over $900, and uses its newfound $100 in tax revenues to pay off the remaining $100 in debt. In other words, instead of issuing $1000 in new treasuries, it only issues $900.
What happenened to the money supply? Nothing, it's unchanged. The taxpayers now have $100 less and the people who would have bought that $100 in treasuries that the government chose not to issue now have $100 more. The total oustanding value of federal reserve notes, treasury coins, and demand deposits is the same as before. No money is created or destroyed.
John, you reason in circles with no beginning and no end.
No, I clearly explained the process by which federal debt would be repaid, and why it would not reduce the money supply.
You have offered nothing in response, no rebuttal, no alternative explanation, no facts, no argument: nothing.
You don't understand, John. There has never been enough "money" created to pay the debt.
After all the "money" in the world has been used to pay "the debt", there would be "debt" remaining unpaid.
....and I base this claim on absolutely nothing.
:-o
Wrong. There is some debt-free currency in circulation, specifically, all coins issued by the U.S. mint.
A quarter dollar coin is exactly what it says it is. It is not a promissory note.
Next up: how to buy an F-16 with loose change.
A quarter coin is silver-clad copper. Old silver coins are worth many times the face value of the coins.
In 1873 Congress, in its infinite corruption unconstitutionally declared silver to NOT be "money", in violation of the Constitution, which declares the coin of the land to be silver and gold. Congress was constitutionally empowered to "regulate the value thereof", they have NOT been empowered to demonitize silver.
When Ovomit's friends in Iran decide to nuke the U.S. they should consider attacking just the District of Criminals. They could solve most of the world's problems with just one well-timed sneak attack, and leave the rest of us alone.
Starve The Beast!!
Since 1965, the US quarter-dollar and ten-cent (dime) coins have contained no silver whatsoever. They are made of copper with a cupro-nickel alloy as cladding. You may be confusing them with the 1965-1970 Kennedy half-dollar coins, which had an alloy core made of about 80% copper/20% silver and was clad with an alloy of 80% silver/20% copper.
Just tryin' to help.
There would be gold. At actual true value, gold would be able to pay off this debt. If gold were 20 grand an ounce, as it should be, we could pay off US debt. No gold? That is what wars are for. Yoohooo boys (and girls)!!! There has been a change in plans ::evil grin::
The only gold the FED had belonged to other people......who are currently trying to get it back from the arch criminals at the FED.
Why can't you just call Controlled Demolition and ask them to do the FED the same way they did World Trade Center 1, 2, and building 7?
Hell, the FED would be an easy job compared to WTC 1, 2, and building 7. Just break out the Military grade thermite and presto all the debt is wiped out and you can lease the space back to a Goldman Sachs hedge fund so they can build new condos for Chinese oligarchs. Have you people learned nothing since 911 or what? USA always takes the easy way out of everything and you know that the debt will never be paid back. Hell, the Pentagon blew the fuck out of their accounting office so why can't you just light a little fire under the FED's arse and call it a day, eh? wtf?
Americans must be high on cocaine or meth, methinks.
:|
Who cares what a bunch of crooks in Washington D.C. do. They haven't been part of our country for a long time.
Wow, so ticking that box on my tax return and all that doesn't help? Aw, shucks. What a disappointment.
Don't worry, some dumbfuck sell side analyst sympathetic to Keynesian theory will claim that it doesn't matter that the debt will never be paid.
Paying down the debt in 2014 dollars is impossible. Default is also impossible, because we can print unlimited dollars. One answer would be to introduce a 'new dollar' and leave the debt in 'old dollars' - then fix the exchange rate favorable enough to allow 'old debt' to be paid. Otherwise it is up to inflation/devaluation to let 'old debt' be paid with much less valuable 2030 dollars. Or we 'do the Greek' and say - turn in your old debt at 40 cents on the dollar - and if you miss the deadline you get nothing!
If they revalue/reschedule the currency, the non-Chosenites will get royally screwed......You can bet the ranch on it.......And it will only delay the inevitable collapse and make the Babylonian Chosenites much, much, much, richer.......And, of course the rest of us more hungry, homeless, impoverished, desperate, and bloodthirsty.
Starve The Beast.
"Almost", lmfao. Something like winning the lotto has better odds, I 'almost' won the Power Ball!
Who talks about paying debt? Seriously, That is sooooooo old school hater talk. I don't think we had a chance once Andy Jackson lost his mo jo with the banksters. The fraud is complete and looting is 24/7 until the Rnterprise breaks apart and the di lithium crystals fuel the EBT no longer.
the answer can only be tying it all to gold
Keeps coming back to FOFOA and foa doesn't it.
Idealistically, sure.
Butt, the ones who would get hurt the most in a move to the gold standard, ironically, in order of importance:
1) 7 billion Human beans who have none, or very little
2) the banks, yep the banks, as the vote in Switzerland just proved (the banks in Switzerland put on an all out assault on the vote to move to gold standard, succeeded in swaying 78% of the human beans).
,
Max out debt, take out an education loan like Ben Bernanke's son for $400,000 and buy PMs for delivery outside the US.
Then skip out of the county. The TBTF banks will seize all the rest in the US.
The sheeple in the US are going to get fleeced and be pacified while it happens.
Convert those dollars while you have them and others will take them.
This article is redundant. We ZHer's have known all along that this debt is unsustainable!
Yeah, robnume, but thinking out loud about that in a video podcast helps to focus one's mind upon that fact!
Ok, everyone here is how this works out, basic human psychology as in everyone wants to believe in something for nothing but most semi intelligent people know better. So government with help from financial/ media industries will have to come up with a new creditor or a new super valuable wealth generating scheme to satisfy the debt. I am talking way outside the box huge hoax stuff. Like an actual perpetual motion energy source or aliens contacting us and wanting go trade gold for carbon monoxide or something plentiful but useless like inner city dwellers. You know how hard would it be to con people into believing all the wealth is really real wealth and if we just go with this new dramatic revolutionary method or invention everyone will be Cree from want and worry.
There's a couple of things you teenage-libertarian types always forget when you start barking about "producers" and "takers" etc:
1) Wealth cannot exist outside of society, because it has no meaning outside of society
2) wealth is created by society, not by individuals
#1 is not easily falsifiable since it is impossible to remove yourself from society (retreating to your posh 4-bedroom chalet in the fashionable Montana hinterland does not count.)
However, if you doubt #2, go out alone into a field and try to create some wealth. Get back to us on that...
Geezus h u r one stupid troll
Go out in a field, plant your seed corn, tend to it, harvest it and feed yourself and wealth is thus created.
Too complicated for a dumbfuk like u? Or do u not understand what real wealth is? Hint, is doesn't have a dead president's picture on it.
Real wealth is being able to operate as an entropic pump of energy, because there is some gradient there, which is how and why one ended up evolving to be there in the first place.
Human animals are entropic pumps of energy, which means that they are organized systems of lies operating robberies. Human societies are groups doing that together, with most of human history being based upon warfare between different groups, for control over the natural resources, which could be transformed, by more entropic pumping ...
The background bigger problem is that industrial revolutions created new situations, in which social pyramid systems based on backing up lies with violence could get away with deliberately ignoring the longer term consequences of what they were doing ON A WAY LARGER SCALE, WAY FASTER! Human ecology was always controlled by death controls based on the maximum deceits, backed by destruction, which then became the political economy based on financial frauds. That reality is what should be understood, in order to understand anything about the deeper realities of basic economics.
The deeper questions are whether or not we could survive to develop better integrated human, industrial and natural ecologies. At present, the history of warfare, whose success was based on deceits and spies, has enabled an economy controlled by enforced frauds, whereby "money" is made out of nothing, in order to "pay" for everything, in ways which are impossible to reconcile with any other energy systems, in which energy can not be created out of nothing, nor destroyed to nothing.
Anyone who thinks that they could be purely "productive" should address the issue that the production of destruction controls production. Those who were farming could be invaded by those who simply robbed their produce. Any kind of "trade" only takes place in the overall context of a balance of the rates of robbery, since whatever could be traded could simply be robbed instead.
To understand the real economy requires facing the facts that when human beings operate as entropic pumps of energy that actually is best described as the fractal patterns of the principles and methods of organized crime. THE BASIC PROBLEMS ARE THAT THERE ARE NO WAYS TO AVOID THOSE BASIC PROBLEMS (WHILE THE VAST MAJORITY OF PEOPLE TEND TO CONTINUE TO DO THAT!)
Can you check the math on the bitcoin protocol and let us know if it is a viable replacement and hedge? Why do people say it is better than gold? It makes sense as far as I can see, but what do you think?
https://en.bitcoin.it/wiki/Bitcoin_whitepaper
In time bitcoin too shall show its real value... worthless.
Even gold is worthless if no one wants it.
There is no such thing as "inherent value." Value is conferred by human beings. Ask a chimpanzee or a giraffe how much they care about gold.
No one disagrees that ALL forms of money eventually become worthless. The question is, on what time scale? If Bitcoin has a lot of value for the next FIVE HUNDRED YEARS, then perhaps it's worth picking some up.. especially since, at current rates of inflation, one Bitcoin in 2085 will be worth about $35,000. Save some and pass them on to your grandkids...
Query: Will bitcoin inflate/deflate at the same rate as fiat.
If yes, why?
If not, why not?
I really don't understand the perceived advantage in bitcoin. I am sometimes dimwitted in such matters. I would really like to be enlightened.
Starve The Beast!!
If it is viable, the FED will find a way to eliminate it.
The video:
Back then it was:We spent the money, it is our responsibility, we have to pay it down....
Let's raise tariffs
Raising someone else's tariffs and taxes does not have anything to do with responsibility. It is just paying debt down with someone else's money you are holding at gunpoint.
The federal debt can only be paid with tax money. There is nothing else to pay it with.
yrbmegr
How about your money. Are you keeping too much of it and not sharing it with the other 6 billion people in the world?
The holographic universe has an explanation for all of this (and maybe quite unfortunately).
If the tax rate was 100% it would not "pay down" the debt. That's why more debt money must be created--- to pay for the old debt money. No matter how much money (debt) is created, it is never enough to pay the interest on that created debt (money). Classic Ponzi.
The difference between a modern economy and a Ponzi scheme is that a Ponzi scheme quickly exhausts available participants, whereas a modern economy relies upon increased population growth and consumption growth to expand. As the economy expands, it needs greater volumes of money to function... money is not "debt" in the sense that it is intended to be fully repaid, like a loan. The debt is not intended to be "paid off."
We live in a finite world. Already the Elite are planning ways to reduce the population, as they claim there are already too many people to feed.
Infinite debt will inevitably "hit the wall" of functional currency expansion.
$1,000 for a candybar anyone?....by 2025?
$10,000,000 for a new Chevy?
All while real wages are decreasing?
Weimarland ueber alles
1964 - A candy bar was a nickel. Today it's about $1.
40 years, and 95% currency devaluation. The same will occur, just faster.
Hard to believe that a convenience store candy bar will cost a ten spot within ten years. But it will.
It has ALWAYS been mathematically impossible to pay down the debt - that is the way the system is designed.
"Money" is actually an interest bearing loan, and the interest portion of the loan doesn't exist - only the principal portion exists. In order to pay the interest on the very first loan, a subsequent loan needs to be taken.
Every loan of "money" in existance in the entire world is nothing more than another layer in history's largest ponzi scheme.
The comparison with a "Ponzi scheme" is inaccurate, since a Ponzi scheme necessarily becomes top-heavy and fails.
The petrodollar recycling system does not need to end. It can continue indefinitely, until it is replaced (smoothly) with something else.