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Old 01-16-2013, 10:02 AM #85
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Quote:
Originally Posted by AlphaNeo36 View Post
It most certainly is. It's a pointless limit that is used as a bargaining tool to get what the vocal minority wants at the potential cost of the US economy. Look at what <del><del><del><del>****</del></del></del></del>ty deal had to be made with the GOP to raise the limit, it almost pushed us into a recession with sequestration. All it accomplishes is that it places a cap on the amount of bonds the Treasury can sell that Congress already appreciated. That is pointless.
Ah yes the crux of my point. You think it is pointless because it limits our revenue(read: debt) when really the problem is our spending. The point of a limit on the amount debt you should get yourself into is so you don't spend money you don't have.

So I guess from a "let's take all the money we can get no matter how much debt we take on and spend it on more and more things" perspective then no I guess it does not matter.

From a responsible spending, actually figuring out how to pay for things perspective limits are good.

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The US is not a business, it is not a household. Do not compare them. Investors do get their money back... when bonds mature and interest is paid...
Yes but underlying principles of debt still remain. Leverage is leverage. It is good up to a certain point but once you are leveraged to the hilt things get a little dicey.

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Yeeeeah, you do what we have been doing for decades. You grow the economy at a 3-4% rate and pay your debts in time as the economy has grown substantially, comparatively.



It's rather self explanatory. GDP increases, tax revenue increases, fast forward 30 years and bond redemption is paid. In 30 years our GDP will be around $30T assuming a small ~2% increase annually. It really isn't complicated. Large bond payments happen quite often. I remember the first time a year or two ago when the GOP refused to raise the ceiling and a rather large debt payment to investors around $100B was approaching. The Treasury almost had to not give old people money for medicine because they would have needed to pay investors instead because they could not create more debt. But it's important we have limits!

How vocal will you be when our debt hits $100T? Maybe you'll have learned a thing or two by then.


Why do you keep saying we don't have a plan? Do you mean to say you do not understand?
Except Americans don't like tax increases. In addition, you are saying that we should pay off old investors by obtaining financing from new investors, correct?

Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation.

When people stop deciding to invest, it will be awefully hard to pay what we owe out of tax revenue, considering people are *****ing about a 2% increase in their payroll tax.
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Old 01-16-2013, 10:38 AM #86
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Originally Posted by benji25 View Post
Please tell me what I am "making up"
Since no one answered this for you I figured I'd help you out:

Literally every word you've posted in this thread, you don't have the slightest, remotest grasp of how sovereign debt works and have spent the last 3-4 pages ignoring the people trying to explain it to you.

Its like watching a 14th century sailor go into a frenzied rant about how if we don't turn this ship around now we're going to sail off the edge of the world.
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Old 01-16-2013, 01:00 PM #87
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Originally Posted by Snake13 View Post
Since no one answered this for you I figured I'd help you out:

Literally every word you've posted in this thread, you don't have the slightest, remotest grasp of how sovereign debt works and have spent the last 3-4 pages ignoring the people trying to explain it to you.

Its like watching a 14th century sailor go into a frenzied rant about how if we don't turn this ship around now we're going to sail off the edge of the world.
I understand what sovereign debt is. You know who else understands it and how ****ty it can be? Europe.

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The European sovereign debt crisis (often referred to as the Eurozone crisis) is an ongoing financial crisis that has made it difficult or impossible for some countries in the euro area to repay or re-finance their government debt without the assistance of third parties. From late 2009, fears of a sovereign debt crisis developed among investors as a result of the rising private and government debt levels around the world together with a wave of downgrading of government debt in some European states.
But that's OK. We are the United States. Nothing bad can happen to us.
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Old 01-16-2013, 03:33 PM #88
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Theres a fairly large coalition within the GOP that are literally ****ing insane and believes their own propaganda. So I wouldn't put it past them.
http://www.citybaseapartments.com/uk/uk-apartments.php

Check it out, might find something your speed.
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Old 01-16-2013, 03:53 PM #89
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Originally Posted by benji25 View Post
I understand what sovereign debt is. You know who else understands it and how ****ty it can be? Europe.



But that's OK. We are the United States. Nothing bad can happen to us.
The sovereign debt crisis is just a symptom of ultra-tight monetary policy from the ECB, which is why it subsided when Mario Draghi made his speech promising to purchase sovereign bonds.
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Old 01-16-2013, 03:56 PM #90
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Benji, I want you to do a couple things for me:

1) Explain how we paid back our WWII debt

2) Tell me what you think the current yield on 10 year treasuries is

3) tell me what you think our long run inflation expectations are anchored at
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Old 01-16-2013, 04:15 PM #91
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It's interesting that Republicans feel the budget deficit is so dangerous that its worth plunging the world into catastrophe over, but not dangerous enough to consider raising any additional revenue...
Why wouldn't the United states be able to make payments if the debt ceiling isn't raised? Are you telling me that debt payments are the ONLY form of government spending?
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Old 01-16-2013, 04:32 PM #92
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Ah yes the crux of my point. You think it is pointless because it limits our revenue(read: debt) when really the problem is our spending. The point of a limit on the amount debt you should get yourself into is so you don't spend money you don't have.
Since when has anyone said anything related to limits on revenue? Every time you post you show a real lack of understanding. The debt limit has nothing to do with revenue. Revenue is procured from tax code set by Congress. The debt limit caps the Treasury on procuring funds through selling bonds, bills, and notes to the public to fund government operations that Congress already appropriated. Essentially, Congress gets to vote on spending in the budget then votes again to pay for it. So, again, it's pointless. You're also doing a great job saying debt is inherently evil without explaining why.

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Originally Posted by benji25 View Post
So I guess from a "let's take all the money we can get no matter how much debt we take on and spend it on more and more things" perspective then no I guess it does not matter.

From a responsible spending, actually figuring out how to pay for things perspective limits are good.
The Treasury doesn't "take all the money we can get", they create what they need. I've said like three times already that we know how to pay for debt redemption... keep ignoring it I guess...

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Yes but underlying principles of debt still remain. Leverage is leverage. It is good up to a certain point but once you are leveraged to the hilt things get a little dicey.
Yet, we are not at the dicey point. We could have, and arguable should have from a scientific economic aspect, had much stronger stimulus packages in Obama's first term. Percentages will start to go down after we get further from the recession and GDP returns to normal paces. That's why recessions are bad. Plus, that's assuming the GOP doesn't take any additional hard stances and start another finance crisis like they did in 2011.

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Except Americans don't like tax increases.
I honestly don't care what some uneducated redneck thinks about fiscal policy. There are enough people in this country that know Bush Tax Cut level revenue will not last forever and you can see that with the increased tax on the wealthy.

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Originally Posted by benji25 View Post
In addition, you are saying that we should pay off old investors by obtaining financing from new investors, correct?

Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation.

When people stop deciding to invest, it will be awefully hard to pay what we owe out of tax revenue, considering people are *****ing about a 2% increase in their payroll tax.
Can I have your autograph Rick Perry?! This is the epitome of ignorance. I'm just going to ignore you from now on. There's no point anymore. You seriously do not understand what I am saying and more importantly what you are saying. If there is anything I have learned from battling stupidity on the internet, it's that resistance is futile. Enjoy the world you've painted for yourself.
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Old 01-16-2013, 06:00 PM #93
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Quote:
Originally Posted by AlphaNeo36 View Post
Since when has anyone said anything related to limits on revenue? Every time you post you show a real lack of understanding. The debt limit has nothing to do with revenue. Revenue is procured from tax code set by Congress. The debt limit caps the Treasury on procuring funds through selling bonds, bills, and notes to the public to fund government operations that Congress already appropriated. Essentially, Congress gets to vote on spending in the budget then votes again to pay for it. So, again, it's pointless. You're also doing a great job saying debt is inherently evil without explaining why.
You realize the proceeds from issue debt is a source of revenue, correct? I guess not. That is why we specify taxes as "internal revenue". So to limit the amount of debt is to limit a source of income, which would mean a debt ceiling has an impact on revenue. Debt is inherently evil because you owe someone money. Why is it bad to owe someone money? Because they want it back. What happens when they want it back? We either have to pay for it (fat chance) or they will stop lending us money. What happens when we don't have money? Not good things.


Quote:
The Treasury doesn't "take all the money we can get", they create what they need. I've said like three times already that we know how to pay for debt redemption... keep ignoring it I guess...
And my argument is our "need" is absurdly high with all of the current programs that we cannot afford. The whole point of my statement was that we don't "need" more money, we need to cut spending.

You keep saying that we will theoretically be able to pay for it when "GDP gets better." What you fail to realize is that spend as a % of GDP is increasing as well.


Compared to tax revenue as % of gdp:


Based on:http://www.taxpolicycenter.org/taxfa....cfm?Docid=205

So not only will we have to put future money towards current debt, we will have to put it towards our increased spending. I think several affluent/educated people agree with me, including Obama:

The National Commission on Fiscal Responsibility and Reform (often called Bowles-Simpson/Simpson-Bowles from the names of co-chairs Alan Simpson and Erskine Bowles; or NCFRR) is a Presidential Commission created in 2010 by President Barack Obama to identify "…policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run."[1] The commission first met on April 27, 2010.[2] A report was released on December 1, 2010,[3] and although the Commission was supported by over 60% of the members (11 out of 18),[1] and an equal number of Democrats and Republicans, the report did not reach the 14-vote threshold required to formally endorse the blueprint and have it sent to Congress for approval.[4] Proponents of the plan praised it for hitting all parts of the federal budget and for putting the national debt on a stable and then downward path. Prominent supporters include JP Morgan Chase CEO Jamie Dimon,[2] Democratic Leader Nancy Pelosi (although at first she opposed the proposal)[3] and Republican Senator Tom Coburn,[4] Democratic Representative Chris Van Hollen[5] has called for a deal based on the Simpson-Bowles framework. Critics say that it would cut entitlement and safety net programs, including Social Security and Medicare. Prominent opponents include Paul Krugman,[6] Republican Vice-Presidential nominee Paul Ryan,[7] President of the Americans for Tax Reform Grover Norquist[8] and Democratic Representative Jan Schakowsky[9]


God forbid we woudl have to start making cuts.

Quote:
Yet, we are not at the dicey point. We could have, and arguable should have from a scientific economic aspect, had much stronger stimulus packages in Obama's first term. Percentages will start to go down after we get further from the recession and GDP returns to normal paces. That's why recessions are bad. Plus, that's assuming the GOP doesn't take any additional hard stances and start another finance crisis like they did in 2011.
So let me get this straight. If we are headed towards a cliff, you wouldn't try and stop the car/change its direction BEFORE we get to said cliff? Granted there is no finite point where we hit a "cliff" but as described above we are headed towards rough waters.

Quote:
I honestly don't care what some uneducated redneck thinks about fiscal policy. There are enough people in this country that know Bush Tax Cut level revenue will not last forever and you can see that with the increased tax on the wealthy.
Are you referring to me as an uneducated redneck or was that an example of a typical american? And, to verify, you are supporting broad taxes increases or increases on the top earners?

Quote:
Can I have your autograph Rick Perry?! This is the epitome of ignorance. I'm just going to ignore you from now on. There's no point anymore. You seriously do not understand what I am saying and more importantly what you are saying. If there is anything I have learned from battling stupidity on the internet, it's that resistance is futile. Enjoy the world you've painted for yourself.

How is this ignorance? You are advocated increasing our debt, increasing our spend AND more importantly advising that we pay off old debts by securing money from new investors as opposed to actually coming up with a sustainable plan to run the government. THAT is pure ignorance.

Last edited by benji25 : 01-16-2013 at 07:34 PM.
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Old 01-16-2013, 08:10 PM #94
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How is this ignorance? You are advocated increasing our debt, increasing our spend AND more importantly advising that we pay off old debts by securing money from new investors as opposed to actually coming up with a sustainable plan to run the government. THAT is pure ignorance.
No, thats how sovereign finance works. Thats what we did after WWII.
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Old 01-16-2013, 08:24 PM #95
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Old 01-16-2013, 09:30 PM #96
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Old 01-16-2013, 10:12 PM #97
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Debt is inherently evil because you owe someone money. Why is it bad to owe someone money? Because they want it back.
i cant comment much on economics as i have an accounting background, so i stay out of these threads, but having debt is not evil. its cheaper to have debt in some cases than having a large cash on hand, because of the losing of money via opportunity cost. having too much debt is bad, but debt is not inherently evil by itself.
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Old 01-16-2013, 10:15 PM #98
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Your debt is someone else's investment. It's the epitome if narrowmindedness to consider debt inherently evil.

That said it is at least arguable that the concept of interest and fees for lending is problematic, because it leeches capital. I believe this is why certain religions forbid usury.
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Old 01-16-2013, 10:37 PM #99
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Which is why many posts back I said "a certain amount of debt is ok". If I can borrow money at 5% and earn 7% with it then why would I not take out a loan? It would be stupid not to. However if I only make 30k per year I shouldn't take out 140k in loans.
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Old 01-16-2013, 10:42 PM #100
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you can manage a 140k mortgage on a 30k a year salary if you budget correctly

if you change 140k to 500k maybe thats a better example
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Old 01-16-2013, 10:46 PM #101
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Which is why many posts back I said "a certain amount of debt is ok". If I can borrow money at 5% and earn 7% with it then why would I not take out a loan? It would be stupid not to. However if I only make 30k per year I shouldn't take out 140k in loans.
If you're a sovereign you'd actually be making yourself poorer by not taking that loan.

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Old 01-16-2013, 10:51 PM #102
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You should if you can earn 7% off of it. You're throwing money away if you don't.
And if you happen to lose your job? Run in to unexpected medical expense? The investment does perform as well as hoped? You will be stuck trying to repay a balance significantly more than your annual salary. Personally not worth the risk for me.

If you have 100% sure investment the. Yes take as much as you can. Unfortunately there is never a 100% safe investment.
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Old 01-16-2013, 10:55 PM #103
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so then you wouldn't be earning a 7% return...furthermore the U.S. has no job to lose, theres essentially zero risk.
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Old 01-16-2013, 10:57 PM #104
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here's a 100% safe investment for the U.S:

borrowing money at <2% interest rates

We'd still profit even with a 0% return
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Old 01-16-2013, 11:05 PM #105
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Your debt is someone else's investment. It's the epitome if narrowmindedness to consider debt inherently evil.

That said it is at least arguable that the concept of interest and fees for lending is problematic, because it leeches capital. I believe this is why certain religions forbid usury.
If I do recall correctly. It was some Italian nobility or royalty who were among the first, if not the first who ended up breaking from religious bans on usury and made a killing. I believe there were reprocussions, mainly social and probably excommunication but its been so long and I've drank too much chianti to remember the details.
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