Here’s why you better fear the crisis over the debt ceiling

[NoleSoup4U]

What on Earth makes you think - much less say - something so absurd? Of course we can print our own money.

Yelling that it can't be done doesn't make it true.

No we can't. We do not control our own money supply. That power was giving to the federal reserve in 1913. You claim that raising the debt ceiling doesn't cause inflation, but what you fail to realize is that you then actually have to pay the bill which DOES cause inflation. That inflation causes a rise in prices on things like rent, food, utilities, and transportation, which disproportionately hurts people that don't have the extra income to pay these rising prices.

 

[NoleSoup4U]

"Trolling" is relative.

That is true. I'm not TRYING to troll anyone.

 

[HawktimusPrime]

That is true. I'm not TRYING to troll anyone.

From everything that I've read from Parser so far in this thread, I'd say he's the one on Pa-troll here.

Parser,...printing money, just for the sake of printing money raises inflation, and therefore hurts those in the lower end of the income spectrum. Wouldn't it make more sense to make sure you already have the money before you decide what you are going to buy, rather than deciding what you're going to buy, using it, and then realizing you don't actually have the money to pay for everything?

How it should work:

Have money on hand, know what you want to buy, buy what you want, according to how much money you have. Purchase the product,...and boom, end of story.

Here's how the government works:

Make a list of what we want, go get it. Use it, abuse it, who cares if we lose it. It goes something like this.

Debt holders(Fed,China, etc.): "Okay now, we need you to pay for everything you got this year.

Govt: "Whoops", we don't have the money. We're already in debt, and we still owe you from 100 times ago.

Debt holders(Fed,China, etc),.."Okay.....so why are we going to approve any more purchase orders in the future then?"

Govt: " Because we can just Raise the taxes on the rich."

Debt holders(Fed, China, etc.), "Lol, we are the rich, and ummm....no, what we'll do is that we'll print for you, and tack interest onto that money."

Govt: "Thanks, and we'll actually pay you back for real this time."

Debt holders(Fed, China, etc.), "Of course you will."


Meanwhile, the taxes increase for Joe and Jane, though many of them are hidden, and Joe and Jane start to wonder why prices keep increasing........

 

[What Would Jesus Do?]

Are there any reputable economic experts who agree with your "just print some money" solution?

So . . . you can't think of any way to refute it and you want me to do your work for you? I'll pass.

A better question is why you don't want to do what I suggest. I won't ask you to cut and paste. Just tell us what's wrong with the idea.

Some people say we can't do it. Which if true - sort of like I can't lift a bus is true - would be a reasonable objection. But it isn't true.

As far as the "debt ceiling crisis" is concerned, there is no intrinsic difference between saying "just print the money" and "just borrow the money." They have similar impact on currency value and so on. They both create "money" out of thin air.

The only important difference for "debt ceiling crisis" purposes is that printing the money doesn't require raising the debt ceiling. Crisis averted. You're welcome.

Printing the money also doesn't increase the debt. Not a penny. DUH! Because not a penny is being borrowed. You'd think our cons would love that.

Think of it. A future without rising national debt. A future where interest rates don't take an increasing chunk of the national budget due to rising indebtedness.

What's not to like?

Sure, we'll still have arguments over restraining spending. That won't change. Let me say it again: that won't change. But at least we'll have this part of the problem under control.

 

[What Would Jesus Do?]

That is true. I'm not TRYING to troll anyone.

OK, you're just being stupid then.

 

[strummingram]

WWJD's plan on balancing debts and deficits:

Ignore that the FED exists.

Great plan.

 

[What Would Jesus Do?]

From everything that I've read from Parser so far in this thread, I'd say he's the one on Pa-troll here.

Parser,...printing money, just for the sake of printing money raises inflation, and therefore hurts those in the lower end of the income spectrum. Wouldn't it make more sense to make sure you already have the money before you decide what you are going to buy, rather than deciding what you're going to buy, using it, and then realizing you don't actually have the money to pay for everything?

I've raised this several times. One of these days someone will notice. Perhaps you will be the first.

I'm not arguing that printing is without consequences. Some - like increasing the probability of inflation, and hypothetically reducing the value of the dollar - are serious. BUT, borrowing has those very same consequences.

Point being we aren't choosing between a way of paying the bills that causes these problems and a way of paying the bills that does not cause these problems. Both approaches - printing or borrowing - will cause these problems.

So if you would rather borrow than print, you need a different reason to justify that choice.

Or if you would rather tank the economy and trash our national credit rating than either borrow OR print, then you really need to explain why you think that's a better idea.

 

[NoleSoup4U]

OK, you're just being stupid then.

What I'm telling you is the truth. You have two other people telling you the same thing. I don't know what else to tell you. I'm trying to understand why you think Congress can just print the money. Do you not realize what the Federal Reserve is?

 

[NoleSoup4U]

I've raised this several times. One of these days someone will notice. Perhaps you will be the first.

I'm not arguing that printing is without consequences. Some - like increasing probability of inflation, and hypothetically reducing the value of the dollar - are serious. BUT, borrowing has those same consequences.

Point being we aren't choosing between a way of paying the bills that causes these problems and a way of paying the bills that does not cause these problems. Both approaches - printing or borrowing - will cause these problems.

So if you would rather borrow than print, you need a different reason to justify that choice.

Or if you would rather tank the economy and trash our national credit rating than either borrow OR print, then you really need to explain why you think that's a better idea.

"Hypothetically?" If there's 100 dollars in the entire economy and I have ten of that. I own 10% of the wealth in the economy. Now, if someone creates another 100 dollars, then I own 5% of the wealth in the economy. My purchasing power just went down.

Long story short, dollars do not equal wealth.

 

[What Would Jesus Do?]

WWJD's plan on balancing debts and deficits:

Ignore that the FED exists.

Great plan.

When did you become a Fed lover?

You and Soup and I have long agreed that the Fed is a problem. How come when I say let's bypass the middleman/usurer you and Soup become the Fed's biggest defenders on HROT?

 

[HawktimusPrime]

I've raised this several times. One of these days someone will notice. Perhaps you will be the first.

I'm not arguing that printing is without consequences. Some - like increasing the probability of inflation, and hypothetically reducing the value of the dollar - are serious. BUT, borrowing has those very same consequences.

Point being we aren't choosing between a way of paying the bills that causes these problems and a way of paying the bills that does not cause these problems. Both approaches - printing or borrowing - will cause these problems.

So if you would rather borrow than print, you need a different reason to justify that choice.

Or if you would rather tank the economy and trash our national credit rating than either borrow OR print, then you really need to explain why you think that's a better idea.

I suggest we have the money on hand before we get it is what we think we need then from now on. If we need more, then we need to have more money on hand, or we don't get it. See my last post as a example of why this works better.

 

[NoleSoup4U]

When did you become a Fed lover?

You and Soup and I have long agreed that the Fed is a problem. How come when I say let's bypass the middleman/usurer you and Soup become the Fed's biggest defenders on HROT?

It's isn't that we like the Federal Reserve, we HATE the Federal Reserve. The difference is that we understand that the Federal Reserve controls the money supply, and what you're advocating can't be done without amending the Constitution.

 

[pablow]

I've raised this several times. One of these days someone will notice. Perhaps you will be the first.

I'm not arguing that printing is without consequences. Some - like increasing the probability of inflation, and hypothetically reducing the value of the dollar - are serious. BUT, borrowing has those very same consequences.

Point being we aren't choosing between a way of paying the bills that causes these problems and a way of paying the bills that does not cause these problems. Both approaches - printing or borrowing - will cause these problems.

So if you would rather borrow than print, you need a different reason to justify that choice.

Or if you would rather tank the economy and trash our national credit rating than either borrow OR print, then you really need to explain why you think that's a better idea.

Well it seems if we just start brazenly printing money then other countries would be forced to follow suit. The result would be the country with the most paper and ink would rule the world.

 

[What Would Jesus Do?]

What I'm telling you is the truth. You have two other people telling you the same thing. I don't know what else to tell you. I'm trying to understand why you think Congress can just print the money. Do you not realize what the Federal Reserve is?

The difference is that I'm explaining why my approach makes sense. You are merely saying "no no no no nooooo." Two people saying "no" does not cancel actual explanation.

Look, I get it. Everybody has been fed the same stories about runaway inflation in the Wiemar Republic. Scary stuff. Must avoid at all costs.

Sometimes I think the only lessons Americans learned from the entire 20th century were
--no printing money
--no tariffs
--no appeasement

All, as it turns out, probably bad lessons if adhered to in a knee-jerk fashion.

Now turn your brain back on and think about what I'm saying. What's wrong with printing as opposed to borrowing?

 

[HawktimusPrime]

Well it seems if we just start brazenly printing money then other countries would be forced to follow suit. The result would be the country with the most paper and ink would rule the world.

Which China is already starting to do. They are far behind currency wise at least, but they are doing their best to change that. They may destroy themselves in doing it, but they'll take us with them if we don't start wising up.

 

[Jan Itor]

Only one team has been successful in addressing the deficit in modern times. If this is a voting issue for you, Clinton is your choice.

Bill & Newt

 

[What Would Jesus Do?]

Well it seems if we just start brazenly printing money then other countries would be forced to follow suit. The result would be the country with the most paper and ink would rule the world.

Some might. Just as some borrow too much. It's a concern. But it isn't a reason not to print any more than it's a reason not to borrow.

 

[NoleSoup4U]

The difference is that I'm explaining why my approach makes sense. You are merely saying "no no no no nooooo." Two people saying "no" does not cancel actual explanation.

Look, I get it. Everybody has been fed the same stories about runaway inflation in the Wiemar Republic. Scary stuff. Must avoid at all costs.

Sometimes I think the only lessons Americans learned from the entire 20th century were
--no printing money
--no tariffs
--no appeasement

All, as it turns out, probably bad lessons if adhered to in a knee-jerk fashion.

Now turn your brain back on and think about what I'm saying. What's wrong with printing as opposed to borrowing?

The dollar is "printed" all the time. Our whole financial system is based off debt. Every single dollar that you see in the deficit, is a dollar that has been created and is in circulation somewhere in the world.

Look, if you want to end the Fed and return the power of the dollar to Congress, I'll stand beside you, but you need to realize the struggle that Andrew Jackson had with the second Bank of the United States, and you also have to realize that the last president to stand against the banks (John F. Kennedy) was assassinated.

 

[What Would Jesus Do?]

Which China is already starting to do. They are far behind currency wise at least, but they are doing their best to change that. They may destroy themselves in doing it, but they'll take us with them if we don't start wising up.

Still not a reason for borrowing instead of printing.

We went on a borrowing spree mainly starting under Reagan. No doubt we thought we had good reasons to do so. Almost certainly stimulated a lot of growth.

Put yourself in China's position. Maybe they want that same boost. But who is going to lend to them? They are lending to us! And why run up huge interest charges by borrowing? Why not print instead of borrowing? Especially effective for them since they don't let their currency fully float.

Not saying that's their reasoning, but could be.

 

[NoleSoup4U]

Still not a reason for borrowing instead of printing.

We went on a borrowing spree mainly starting under Reagan. No doubt we thought we had good reasons to do so. Almost certainly stimulated a lot of growth.

Put yourself in China's position. Maybe they want that same boost. But who is going to lend to them? They are lending to us! And why run up huge interest charges by borrowing? Why not print instead of borrowing? Especially effective for them since they don't let their currency fully float.

Not saying that's their reasoning, but could be.

We've been borrowing money since 1913.

 

[What Would Jesus Do?]

Look, if you want to end the Fed and return the power of the dollar to Congress, I'll stand beside you....

Yes I do.

I'm just saying this is a perfect time to do it. If necessary, use a presidential order to print the money and then pay the bills. Let the chips fall where they may. There will probably be lawsuits. Perhaps injunctions. If there are injunctions, ignore them. Keep printing until the appeals get through the Supreme Court. By then anything could have happened.

While this is playing out, maybe the GOP in Congress will agree to raise revenues enough to pay the bills. Maybe the Dems in Congress will agree to cut spending enough that existing revenues will pay the bills. Who knows?

But here's the thing . . . In the interval, the bills will get paid, the national debt will not grow. And if by some fluke Congress should start being responsible, the dollar and our credit rating will probably strengthen.

Worth a shot, I say.

 

[What Would Jesus Do?]

I suggest we have the money on hand before we get it is what we think we need then from now on. If we need more, then we need to have more money on hand, or we don't get it. See my last post as a example of why this works better.

Just like everybody does before buying a house or car, right?

Kiss our military goodbye. Watch our federal highway system wink out of existence.

 

[NoleSoup4U]

Just to let you know, raising taxes doesn't necessarily raise revenue. I'm not saying it can't, I'm just saying that it's not something that is 100% for sure.

As for the rest of your post, I guess you need to elect someone who isn't scared of being assassinated. Obama is just a puppet, so don't expect him to do anything. Also, be prepared for the bankers to try to tank the economy, just like they did the last time that scenario played out. The biggest differences are 1) that there was still a gold standard last time, and 2) the second Bank of the United States didn't have near the power that the Federal Reserve does.

 

[HawktimusPrime]

Just like everybody does before buying a house or car, right?

Kiss our military goodbye. Watch our federal highway system wink out of existence.

That's what happens when you completely destroy your own credit. If I have thousands upon thousands in car debt, who in their right mind is going to give me a loan to buy another car?

Ain't you one of them types that want the military thinned out quite a bit anyways, eh?

 

[What Would Jesus Do?]

We've been borrowing money since 1913.

Longer than that. I didn't spot one in dollars, but this shows debt back to the beginning.

 

[What Would Jesus Do?]

That's what happens when you completely destroy your own credit. If I have thousands upon thousands in car debt, who in their right mind is going to give me a loan to buy another car?

This would make sense if you had established that printing money rather than borrowing it would destroy our national credit. You haven't established it. You haven't even tried.

You know what would risk destroying our national credit? Not paying the bills.

My way pays the bills. It doesn't increase the national debt. It doesn't program in future interest payments.

 

[What Would Jesus Do?]

Just to let you know, raising taxes doesn't necessarily raise revenue. I'm not saying it can't, I'm just saying that it's not something that is 100% for sure.

As for the rest of your post, I guess you need to elect someone who isn't scared of being assassinated. Obama is just a puppet, so don't expect him to do anything. Also, be prepared for the bankers to try to tank the economy, just like they did the last time that scenario played out. The biggest differences are 1) that there was still a gold standard last time, and 2) the second Bank of the United States didn't have near the power that the Federal Reserve does.

According to Laffer, we are nowhere near the turning point on his curve. When I saw him comment on this a few years ago, he pegged the top rate where that turn was likely to happen as being around 48-49%. We have a lot of room.

 

[Titanhawk2]

Sorry, our justice system, our food safety programs, our military, our safety net, our education system . . . these are not leeches. They are programs nearly all Americans want our government to undertake.

Even the most aggressive spending cutters of recent years have yet to produce a balanced budget without projecting it out into a future when they won't be accountable.

We don't need to kill the programs that Americans want. We just have to take responsibility and pay for them.

Justice system? You mean federal marshals, because I don't think there will be fewer cops on the street
Food safety - I doubt the food industry will digress to the middle ages if the USDA doesn't make their appointed rounds for a short time - cook your meat and wash your veggies
Our safety net is still self sufficient if it were left alone, but it is continuously stolen from
Education system - feds contribute something like 7% to the local school budgets, hardly school closure amounts

 

[What Would Jesus Do?]

As for the rest of your post, I guess you need to elect someone who isn't scared of being assassinated. Obama is just a puppet, so don't expect him to do anything. Also, be prepared for the bankers to try to tank the economy, just like they did the last time that scenario played out.

Those are legit, pragmatic concerns.

If Obama should plan to go this route, he may want to identify where the trouble will come from and begin softening the targets. A shame he didn't send some top CEOs of financial institutions to jail for their role in the Great Recession. It would have set a useful precedent.

 

[MemorialRedWarrior]

There is a lot of information and ideas coming from the left in this thread. It started out as if they we're correct in their thinking and the Republicans were the ones being insidious. Then it just became a big mess of bad ideas from the left on this site.
I would like to clarify that I think both parties are responsible for this, but that they ultimately answer to the ones who have the money. There is lots of blame to go around.

 

[MemorialRedWarrior]

Those are legit, pragmatic concerns.

If Obama should plan to go this route, he may want to identify where the trouble will come from and begin softening the targets. A shame he didn't send some top CEOs of financial institutions to jail for their role in the Great Recession. It would have set a useful precedent.

Shame yes, surprising no.

 

[What Would Jesus Do?]

Justice system? You mean federal marshals, because I don't think there will be fewer cops on the street
Food safety - I doubt the food industry will digress to the middle ages if the USDA doesn't make their appointed rounds for a short time - cook your meat and wash your veggies
Our safety net is still self sufficient if it were left alone, but it is continuously stolen from
Education system - feds contribute something like 7% to the local school budgets, hardly school closure amounts

Did you read the post I was responding to? Your comments are not in context.

 

[NoleSoup4U]

According to Laffer, we are nowhere near the turning point on his curve. When I saw him comment on this a few years ago, he pegged the top rate where that turn was likely to happen as being around 48-49%. We have a lot of room.

It isn't just that. First off, there are too many loopholes that the rich create for themselves. You'll have to revamp the whole system in order for it to work the way you want it, and good luck getting your Congressman to choose you over his major campaign donors.

Thomas Sowell also brought up a great point in his book, but I can't remember it atm. I'll have to go find it and post his thoughts in this thread.


Edit: Sowell talks about how people react to increases in the tax rates, which kind of goes with my first point. He talks about how rich people have more avenues to avoid tax rate increases than poor people do.

 

[What Would Jesus Do?]

There is a lot of information and ideas coming from the left in this thread. It started out as if they we're correct in their thinking and the Republicans were the ones being insidious. Then it just became a big mess of bad ideas from the left on this site.
I would like to clarify that I think both parties are responsible for this, but that they ultimately answer to the ones who have the money. There is lots of blame to go around.

Only 2 ideas from the left that I'm aware of. Two doesn't seem like enough to constitute a "mess." As for whether they are "bad," perhaps you can back that up. Here are the 2 lefty ideas. What's bad about them?

1) raise the debt ceiling, borrow the money, pay the bills.

2) bypass the debt ceiling (and the Fed), print the money, pay the bills.

[For those who are thinking l left out the trillion dollar coin, that's just a version of printing the money that some think would more easily pass constitutional muster.]

[There's actually a third view that says the prez can just borrow without worrying about the debt ceiling - on the theory that borrowing is implicitly authorized whenever Congress passes a spending bill and the money isn't in the treasury. Make sense to me, but I wonder who would do the lending.]

 

[What Would Jesus Do?]

The helpful HROT alert system tells me I'm 16 alerts behind. I doubt I'll ever catch up. Especially since I need to hit the bank (while any are still open).

Let me know what you decide.

I enjoyed the conversation. Apologies if I offended anyone in the heat of the moment.

 

[NoleSoup4U]

The helpful HROT alert system tells me I'm 16 alerts behind. I doubt I'll ever catch up. Especially since I need to hit the bank (while any are still open).

Let me know what you decide.

I enjoyed the conversation. Apologies if I offended anyone in the heat of the moment.

I don't get offended, so you'll never have to worry about me.

 

[MemorialRedWarrior]

Only 2 ideas from the left that I'm aware of. Two doesn't seem like enough to constitute a "mess." As for whether they are "bad," perhaps you can back that up. Here are the 2 lefty ideas. What's bad about them?

1) raise the debt ceiling, borrow the money, pay the bills.

2) bypass the debt ceiling (and the Fed), print the money, pay the bills.

[For those who are thinking l left out the trillion dollar coin, that's just a version of printing the money that some think would more easily pass constitutional muster.]

[There's actually a third view that says the prez can just borrow without worrying about the debt ceiling - on the theory that borrowing is implicitly authorized whenever Congress passes a spending bill and the money isn't in the treasury. Make sense to me, but I wonder who would do the lending.]

Two words,..won't happen. That is what is wrong with your proposals. It won't happen because the 'prez' has no intention on doing so, and because the controlling interests have the ability to put a stop to it one way or another. They have given the Fed the power to control the currency, and therefore the Fed would most definitely retaliate to such measures.
Option 1 contributes directly to the Fed and whomever else we can borrow from. The United States needs to understand it is not above staying true to financial obligations.
Your options lead to the same place if you think about it. What about the option of staying within a budget that accounts for the debtj already owed? Rather than staying in a budget that adds to the debt, even if it is added to more slowly. Is that a crazy idea, or is there some merit to it do you think?

 

[naturalmwa]

Bill & Newt

Exactly, you got the Newt part of the equation in place. Now you just need a Clinton to get things done.

 

[NoleSoup4U]

Exactly, you got the Newt part of the equation in place. Now you just need a Clinton to get things done.

And then you need an economic bubble. Good luck with that last part.

 

[naturalmwa]

And then you need an economic bubble. Good luck with that last part.

I like bubbles.