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surely you're only "broke" when you can't meet your obligations. The day Treasury cheques bounce will be the day that they are broke. Which will be, like, never.
Look at all of the comments over there saying basically, "yeah, finally the truth is out".
This guy is saying we don't have money for SS or Medicare etc. Is like a guy from the 17th century saying that we will never have money to send a rocket to the moon. The fact is we don't know what resources we will have in the future. But it has nothing to do with money, since we all know where that comes from.
"…we all know where that comes from…"Well, at least three of us do anyway.
If these so-called 'alternative' media outlets do not start providing equal time for the 'alternative' view, then they are just as bad as the moron mainstream media imo.Some "alternative".HEY GET MIKE ON THERE TASK AND BLODGET!!!!
"we will never have money to send a rocket to the moon."Ha ha!!
Notice the interview was set up like an infomercial with Scott Trade ads all over it. Its fear mongering and playing to people's instincts. "Oh honey, we better get aggressive with our investments before the country goes broke!"
A well-worn tactic:1.Say a big scary number.2.Say something nice about "the children".3.Say something bad about politicians.4.Propose lower taxes for the rich.
Mike said that to say US has too much debt and cannot pay It is like saying the earth has too many people and gravity is going to end. It cannot be so hard to understand issuer paradigm yet they refuse to. If they were intellectually honest they would redicule this guy but they are not. Krugman keeps repeating the debt is real instead of saying WE CAN NEVER RUN OUT OF MONEY.
"If they were intellectually honest they would redicule this guy but they are not. "Correct!Or at least have the alternative viewpoint on for equal time how about it....rsp,
I really blame Obama for this terrible crisis in public misperception. When Obama decided to appoint the Simpson-Bowles-Peterson commission and turn his administration away from economic growth and unemployment toward long-term deficit reduction, and then declared we were "out of money", Americans took away the bi-partisan message that the country is facing insolvency. It's hard enough for even relatively well-educated people to learn to distinguish the private sector debt crisis from very different matter of public sector debt issue. It's almost impossible to get the right message out to the general public when political leaders of both parties are misleading them.We're facing years of stagnation, misery and unemployment because our leaders have stabbed ordinary Americans in the back with their lying debt hysteria and idiotic deficit vapors.And as much as I have been skeptical in the past of the "confidence fairy", I believe this public debt scam has empowered the paranoid and government-phobic idiots in our society, and is having a pulverizing effect on business and consumer confidence. You can't tell the country that the most powerful government in the world is "out of money" and expect those people to engage in confident economic spending on consumption and investment. When people believe the whole country is on the verge of bankruptcy, they hoard. Just read all the crazies on all those economics websites and investment websites. They think the damn sky is falling! Washington has created a condition of persistent economic panic. The Republicans are lying about being out of money so they can get people to cut spending and destroy the social safety net, and Obama is lying about being out of money so that he can get people to tax the rich more heavily. We're all squeezed in a pincer movement of bipartisan malevolence and stupidity.We are not out of money. Government agencies - we the people - do what we do in the public sector by using legislation to take control of real resources so as to put them to work for public purpose. It's entirely up to us how many of these resources we wish to place in public hands and how many we want to leave in private hands. Money and other financial instruments are things we create at will for the purpose of conveying these resources from place to place. We are not out of real resources. We have them in abundance, although we are stupidly choosing to leave many of them unemployed.
Dan K: "We're facing years of stagnation, misery and unemployment because our leaders have stabbed ordinary Americans in the back with their lying debt hysteria and idiotic deficit vapors."This was not a stupid move by the president and it is not based on ignorance. This is the execution of a highly intelligent and disingenuous plan to separate fools, oops, "the little people," from their money. Cutting middle class benefits is pretty much equivalent to raising taxes on the middle class.This is an important piece of the plan to cut "entitlements" and bring an end to the "welfare state" so that the American empire can flourish under the rule of corporate statism aka institutional fascism.There are cyrpto-fascists on both sides of the aisle and they are league with the oligarchy, opps, I mean donors.
"interest rates and fiscal sustainability" was written as a critique of Kotlikoff's analysis, btw. Scott Fullwiler
Tom, I now believe Obama is just stupid, and that his policy is mainly rooted in ignorance, not diabolical machinations. He has a self-image of himself as the defender of a responsibility ethic, and really believes that we are out of money and thus need to reform entitlements and contract fiscally to live more responsibly and "within our means". He has swallowed the whole Peterson rap - hook, line and sinker.He's also afraid of people with established social position and power, and overly impressed by them. Like Bill Clinton, he's a born social climber with an insecure craving for social validation from people in what he views as higher social strata. In other words, he's the kind of guy who is always looking for another di** to suck and another poobah to impress.
Dan / Tom - if either of your opinions of Barry O are correct, then are we better off with Romney?My theory was that the House Republicans are a terrifying breed and that a Republican in the White House would give them way too much power.Or could it be that the House Republicans are just SOBs and are trying to sabotage Obama at any cost just to get a Republican into the White House. Once that is accomplished they'll become more reasonable and enact policies that will actually benefit this country?What say you?
I don't think we are better off with Romney, in himself. But if I had to choose between a veto proof Democratic Congress with Romney, or a majority Republic Congress with Obama, I would choose the Democratic Congress with Romney.But we don't get to make that choice that choice. With Romney we will probably get a Republican Congress, and get more Alitos, more dismantling of regulation, more inequality, more laissez faire environmental free-for-all and more empowerment of the Radical Republican enemies of everything progressive.Right now, things suck in this country, and we are going to get a big steaming pile of suck either way.
Dan -I like how you chose the one option that apparently is not available to us... Dem Congress / GOP Pres.I think I'm leaning towards the gridlock of inept Obama and frustrated GOP Congress blocking each other from doing anything.
I think, and I am not alone in this, that Obama is Clinton II. He is New Democrat, as revealed by his appointments. The New Democrat strategy is to form a coalition of conservative and mondere Dems and moderate Repubs, which would be unbeatable since it would own center and capture the independent vote. Clinton had intended to take on entitlements is his second term but Monicagate. Obama will try to finish the job if re-elected.Romney over Obama? Only if you think that neoliberalism and neoconservatism are the future of America and the world.As I said during the campaign for the nomination lat time around that Obama was a snake in the grass. Most people thought I was crazy then. Then after Obama got the nomination, I said that if Obama wins, there will be disaster, but if McCain wins there will be catastrophe. Same with Obama v. Romney.Neoliberalism is cresting and TPTB are going for the moon, and as a result overreaching. This won't be reversed until after the inevitable crack-up. Why inevitable? These people live in a bubble and are clueless about reality. And reality is the great teacher, whose lessons are harsh and bitter and where learning is hard.
Broll: Dan / Tom - if either of your opinions of Barry O are correct, then are we better off with Romney? My theory was that the House Republicans are a terrifying breed and that a Republican in the White House would give them way too much power. Or could it be that the House Republicans are just SOBs and are trying to sabotage Obama at any cost just to get a Republican into the White House. Once that is accomplished they'll become more reasonable and enact policies that will actually benefit this country? What say you?The TP Republicans being elected now are true believers, extremists, and many are crypto-fascists. Their rule would be an unmitigated catastrophe. Romney is an oligarch. The oligarchs and the TP conservatives are united now in a fractious coalition. Oligarchs are generally pragmatists, so It will be pragmatists against true believers. The country would be polarized between left and right, and the governing party would be divided. How could that possibly be good?
With the balance of seats up for re-election in the Senate heavily favoring Dems, the probability is good that rule in the Senate will change hands. Republicans will lose some seats in the House but odds are that it will remain in GOP hands.Romney is the underdog right now, and it looks like a GOP congress and Democratic president. But way too early to get a clear fix. Most people haven't really started to focus yet, and not many people follow politics closely. Moreover, propaganda shapes most people views, so it is isn't exactly an informed electorate. Add to this the the identity vore and single or limited issue vote, i.e., people with highly skewed priorities.Nate Silver is great with keeping up with the latest statistically though. He provides excellent analysis free that politicians pay pollsters a lot of money for.
The TP Republicans being elected now are true believers, extremists, and many are crypto-fascists. Their rule would be an unmitigated catastrophe.The Mea Party continues to dominate in primaries though, simply because no one else is paying attention. See Ted Cruz, who will be the next senator from Texas. Elected with 8% of the vote of those who voted in 2008 election.Even for a foaming-at-the-mouth red state like Texas, there is no way Ted Cruz represents this electorate.
I think I'm leaning towards the gridlock of inept Obama and frustrated GOP Congress blocking each other from doing anything.Broll, I'd prefer a free-spending and activist Congress with a President who can't do anything to stop them.
Trixie: "Even for a foaming-at-the-mouth red state like Texas, there is no way Ted Cruz represents this electorate."And this is why there is going to be buyers' remorse over a lot of these people. But it is a necessary step in the cresting of this wave. Things often test extremes before reverting to the mean, and in the process of reverting overshoot in the other direction, and another wave begins to rise and then inevitably fall. That is how the historical dialectic works, as various positions are tested against each other through successive historical "moments."
Sadly I agree our best hopes would be a Dem congress and GOP president, but sadly I don't think that will happen. Obama in the Whitehouse on term 2 and he'll try to be the "great compromiser" and cut SS and Medicare (and everything else) with a GOP congress to save us from the pending fate of Greece.The combination or arrogance and ignorance is just mind boggling.And sadly I too worry that Tom is so right. We have to have another mother of all crisis to re-teach the elite that if they want to have a lot they have to share appropriately - without the rest of us there is no economy for them to take millions. If they over reach they will cut their noses off despite their faces - and sadly we'll all pay for that lesson to be learned.
@Tom,"Things often test extremes before reverting to the mean, and in the process of reverting overshoot in the other direction, and another wave begins to rise and then inevitably fall. That is how the historical dialectic works, as various positions are tested against each other through successive historical "moments.""So what's your estimate on time frame? How bad will the swing be (I'm guessing as bad or worse that 1933)?
Maybe we should put in power whoever is most likely to crash the economy. A heart attack or slowly bleed to death? At least with a heart attack there seems a better opportunity for resuscitation.
"So what's your estimate on time frame? How bad will the swing be (I'm guessing as bad or worse that 1933)?"Hard to put a clock on it with governments and central banks in the picture. They are incredible powerful and can act decisively when they feel the need to do so. It is still possible to fix things along MMT principles and the proposals of MMT professionals like Warren, Randy, Bill Mitchell, and Bill Black. But that would require a lot of vested interests to step out of the way, so it is unlikely.I expect governments and central banks to attempt to sustain the status quo by any means necessary until some shock intervenes and upsets the apple cart. Shocks are surprises by definition, so even though it is possible to see where a shock might come from it is difficult know which and when.Wider war in MENA that disrupts the global oil supply? Widespread realization that global warming is a serious threat that need to be dealt with ASAP. Another financial crisis sparked by the situation in the EZ spinning out of control political or through a major failure? Political stalemate in the Us resulting in a US downturn that does viral? Popping of the Chinese bubble?There is lots of system risk now, and the widespread use of derivatives has greatly upped the leverage, amplifying the effect. Moreover, corruption reigns unabated.The good news is that it seems that the likelihood of another 9/ll or worse is declining. The bad news is that this has been at the expense of militarization and the rise of the surveillance state, and even police state. So this improvement of security has come at the cost of increasing institutional fascism, including distrust and even persecution of minorities and dissenters.So while it is still possible to escape a crack-up, the odds are against it right now. It seems to me that the odds of something happening in the near future are increasing, judging from the dominant trends.I think that the world is poised on the brink of generational change since the culture that is emerging is vastly different from the culture that is being replaced. It is deep-rooted, too, being based on a different ontological view of the world, human nature, and humanity's place in the scheme of things. The ethics is also greatly different, and increasingly spirituality on one hand and humanism are replacing institutional religion as predominant cultural forces. This trend began back in the Sixties and we are coming full circle on an upward spiral, on one hand, and a downward spiral on the other.Again, I encourage looking at Ravi Batra's analysis as an economic historian and Strauss and Howe's generational theory in sociology. Wikipedia articles are sufficient to get the drift.I continue to recommend Meher Baba's short discourse entitled "The New Humanity" for a spiritual perspective on what's to come.When? The future is uncertain, but crises have been a recurring phenomenon. No reason to think that this time it will be different, especially now that "the Great Moderation" has been discredited and all the pieces that led to the last crisis are still in place, with the financial system even more consolidated.The poisonous political situation makes any policy shifts difficult too.My view is that "insurance" is through networking, especially local networking. There is a lot of positive thought and action wrt the rising wave that will be visible as the present wave crests and falls. What's coming won't arise out of a vacuum. It's already in the works among those experimenting and exploring options. Lots of positive opportunity out there now as people realize that those who don't hang together will hang separately.
JK "Maybe we should put in power whoever is most likely to crash the economy. A heart attack or slowly bleed to death? At least with a heart attack there seems a better opportunity for resuscitation.What I am most concerned with in the case of a sudden big crash is war. Politicians know that in extremis war is the solution to all problems.
If the ECB finally steps in to control eurozone bond yields, average people who pay attention might finally get a clue about what's really going on.They might start asking themselves what all the 'bond vigilante' stuff was about, and why the ECB did nothing about this earlier.
did he use an abacus to calculate the $222 trillion..?no wonder boston university is the favorite hang out for asian rich kids in search of a 'no studying required' degree.
…did he use an abacus to calculate the $222 trillion..?…Not only that, but unfunded liabilities are a function of LEVERaging NFA's thru the credit circuit to create value.Then "economists" (I use the term loosely) are surprised when they realize we haven't printed the money yet to actually "fund" those "assets" should some cohort want to cash out. So lets not print the money and let the "air" out?Just because a bunch of assets has value on paper does not mean the actual net dollars exist to monetize them other than at some fraction of their value.Why isn't this obvious?
paul: Why isn't this obvious?Because for them, it is thinking the unthinkable.
"Why isn't this obvious?"The money multiplier fallacy.
Most people here are missing the elephant in the room.Hyperinflation tends to always be the outcome of governments than run deficits and accumulate debt that can only be made good with printing money.The US government CAN declare bankruptcy if they refuse to print money to make good on their promises. Just put yourself in their shoes. Suppose you issued your own currency that was accepted all around the world as reserve currency.Suppose you had the choice of either not defaulting on your debt by printing more money, but then losing the world currency reserve status for your currency, OR, defaulting on your debt by abstaining from more money printing, but maintaining world reserve currency status.In other words, what would be more valuable to you? Losing reserve currency status, or losing credibility on your debt?I think most central bankers would choose default. Not because they are mechanically compelled to do so, but because it is in their interests.
major,To so-called "pay the debt off" to foreigners, all that has to happen is these amounts seen in the computer in this report here:http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txtHave to be transferred via a double entry accounting transaction to this computer report here:http://www.federalreserve.gov/releases/h41/Current/and the "debt" is "paid off".Everything happens within these government computer systems.If you have questions about this process please do not hesitate to post them here.rsp,
…Hyperinflation tends to always be the outcome of governments tha[t] run deficits…Hyperinflation is more the result of a collapse in production than printing money. Printing is generally the result of hyperinflation, not the cause.See Weimar, Zimbabwe.
Hyperinflation is more the result of a collapse in production than printing money.I disagree. You can't have the rates of hyperinflation on the basis of collapsed production. For the collapse in production would have to be on the order of collapsing back to the stone age.You can't have Weimar and Zimbabwe rates of hyperinflation on the basis of falling production. That requires massive money printing.
…You can't have Weimar and Zimbabwe rates of hyperinflation on the basis of falling production…We aren't talking about falling production. In both casses there was a massive collapse……Weimar as a result of foreign occupation of their main manufacturing region, exascerbated by huge war reparations owed in gold that Germany didn't have……Zimbabwe because agriculture was taken from white farmers and handed over to inexperienced African natives, coupled with external debt in US dollars.Not really a big mystery. Hyperinflation never is.Not sure anything is.
In 1900 total US government spending was apparently $629 million.The apollo space program cost about $25 billion.If you'd asked someone in 1900 if the US would ever be able to afford the future apollo space program at that cost, they would probably have said no - impossible.The total cost of the Iraq and Afghanistan wars was about $4 trillion.Could have built a colony on Mars for that. But anyway I don't trust people who1.Say a big scary number2.Say something nice about "the children".3.Say something bad about politicians.And then4.Propose lower taxes for the rich.1 tends to be bogus.
I wouldn't be surprisd if Kotlikoff factored in sky-high interest rates on government debt (once those bond vigilantes come knocking).
Mugabe destroyed his country's only real 'industry' and handed it over to army cronies, who left it to fall to pieces. Then Mugabe printed impossibly large quantities of Zim dollars and handed it to his cronies. Then he said "Blame the British!" and murdered loads of people.
Who actually issues the US currency?Wikipedia:“The Treasury prints and mints all paper currency and coins in circulation through the Bureau of Engraving and Printing and the United States Mint."
Yes, but that's just minting and printing. Notes and coin are distributed to banks by the Fed in exchange for rb, which the Fed issues. Moreover, when the Tsy spends, it uses rb for settlement, which it must get through issuance of tsys. Only the Fed can issue rbs.
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