Check out this interview that Alan Simpson did on the Today Show this morning.
| "There's people that we owe $16 trillion bucks to." "We're in deficit to the tune of $1 trillion one hundred million. If that isn't a stimulus then the drinks are on me." "Unless you get in there these people are going to say, I got an idea for you...you're addicted to debt, and we're gonna loan you more and we want more money for our money and then when we do that interest rates will kick up and inflation will kick in..." |
First off the gov't owes about half of that $16 trillion to itself, so let's just correct him right off the bat and by the way, why doesn't he make that clear? The answer is, because it's part of his campaign to manipulate you. He has no leverage if you're not scared.
Next he says we're in a deficit to the tune of $1.1 trillion. And he says, "if that's not a stimulus then the drinks are on me."
Ok, I'm confused here. Is he agreeing that the deficit is a stimulus?
Moving on he's saying that we owe money. Let's get real...WE owe nothing. WE got paid, in dollars. That's what WE own not owe. Dollars. That's it. The world (including parts of our own government) got to keep $16 trillion dollars because in the past 234 years that's the amount of dollars the gov't spent into the economy in excess of what it took away from us in taxes. Those people/nations/institutions...whatever...are holding those dollars in dollar equivalents called Treasuries, just like you holding your money in a savings account at your bank. How does the bank "pay you back?" It debits your savings account and credits your checking account. That's it. Done. Nobody screaming where's the bank gonna get the money to pay you back? Nobody saying the bank has to go on austerity in order to be able to move your money from your savings account to your checking account. The bank just makes some accounting changes and your savings account balance goes down and your checking account balance goes up. Same thing with how we "pay back" holders of Treasuries. The Fed just debits their securities account (at the Fed) and credits their reserve account (also at the Fed). In fact this has been done to the tune of $11.6 trillion so far this fiscal year. We're talking two and a half months! In that time the national debt has been almost completely rolled over (paid back).
Let's keep going. Simpson says, people are loaning us the money because we're addicted to debt. So, who is loaning us money? What money? Dollars? Simple question for Alan that the interviewer should have asked: If we make the money, why do we need to borrow? Where is that person who is lending it to us, getting it from? Finally, the most idiotic claims of all about rates going up and inflation going up.
Take a look at the charts below.
US Public Debt and 10yr Treasury yield
And this...
US Public Debt and Inflation
Interest rates have been collapsing even as the debt has been skyrocketing. Inflation has been non-existent even as the debt has been skyrocketing. If these guys can't see this by now it's a joke. If the media can't call these fools out on this by now it's a disgrace.
11 comments:
"Next he says we're in a deficit to the tune of $1.1 trillion. And he says, "if that's not a stimulus then the drinks are on me."
Ok, I'm confused here. Is he agreeing that the deficit is a stimulus?"
right Mike... 'inability to discern contradiction' which is a textbook moron...
Then in the youtube video he warns our youngsters that "they will clean out the Treasury on you"....like the govt has to SAVE in it's own currency!?!?!
What in idiot!
Great stuff... rsp,
The other day, Lindsey Graham said that entitlements need to be cut because Social Security faces "imminent bankruptcy". That is just a damn lie. And Graham is a big fat shameless liar. It's not an alternative "interpretation of the facts". It's a LIE. A BALD LIE from a LYING SCUMBAG who has somehow gotten himself elected tot the US Senate.
And if the media doesn't point this out, they are also corrupt, compromised collaborators participating in a scheme to deceive an fleece the American people. They all suck.
They all do suck, Dan.
Dan,
Here's Graham's quote:
http://dailycaller.com/2012/12/02/lindsey-graham-i-think-were-going-over-the-cliff-video/
"“I think we’re going over the cliff,” Graham said. “It’s pretty clear to me they made a political calculation. This offer doesn’t remotely deal with entitlement reform in a way to save Medicare and Medicaid and Social Security from imminent bankruptcy. It raises $1.6 trillion on job creators that will destroy the economy, and there are no spending controls.”
"“We’re becoming Greece because of out-of-control entitlement spending. There’s no age adjustment for Medicare and Social Security. There is no means testing in the president’s plan. We should do what Ronald Reagan and Tip O’Neill did — adjust the age for retirements, a means test benefit, do it together, and Republicans should put revenues on the table. The president’s plan does nothing but damn us to becoming Greece.”
Looks like he thinks that with the 'imminent' retirements of the boomers, SS/MC revenues will soon get overtaken by outlays... and wants to means test and push the age back as a preventive measure so we dont become Greece...
I guess a judgement call as to whether he is "lying" or is a "moron"....
I give him, a GOPer, along with Dems who exhibit the same cognitive deficiencies, the benefit of the doubt and come down on the side of the latter...
rsp,
Matt, I think it's "liar". These guys get very detailed and high level reports from all of the government bean-counters. They know better. He's just lying.
I suspect Lindsey Graham is a moron rather than a co-conspirator. It's the people in the business that cannot be morons unless they are totally incompetent, and it's hard to believe that they could have risen to the top while being morons. But I guess anything is possible.
Mike,
Alan Simpson may be cherry picking facts in order to make his case, but your argument is illogical.
By your logic that the debt and deficits don't matter, why don't we just do away with all taxes and fund the government on 100% new borrowing? Why not go even further and pay every citizen $10,000 in addition to no taxes and borrow that money too?
If you take your argument to it's logical extreme it is obvious that inflation will eventually be the result of more and more debt and money printing.
Steve
"It's a LIE. A BALD LIE from a LYING SCUMBAG who has somehow gotten himself elected tot the US Senate."
C'mon Dan you're holding back a little here.
"If you take your argument to it's logical extreme it is obvious that inflation will eventually be the result of more and more debt and money printing."
Your statement above this is not the logical extreme, in fact there is no logical extreme.
No one has said deficits don't matter…deficits tell us how much new spending the government must add to the budget or the economy will contract. It's a signal.
The deficit is a measure of how much new net wealth was created in the previous cycle, businesses and households borrowed funds to fuel that growth and now it must be monetized, or it will vaporize.
A separate issue is whether parasites are removing huge sums of money from the system while producing relatively little…that has to be dealt with, the system is not designed for huge levels of savings or hoarding within a small cohort…funding that behavior is pointless and destructive.
…and I don't mean poor people or deadbeats…a dollar stays in their pocket for about 10 minutes, their spending helps others even if they don't produce anything.
why don't we just do away with all taxes and fund the government on 100% new borrowing? is this it?
Who needs borrowing? The monetary sovereign should simply spend its money into existence and tax only SOME of it out of existence again.
What you are apparently missing is that the banks create 95-97% of our money supply as debt. Even the interest for that debt must be borrowed from the banks unless the monetary sovereign deficit spends it into existence. And when the banks slow down on lending as they inevitably do, then the money supply goes back to nothing, just as it was created from nothing.
Things aren't as simple as you suppose.
By the way, you can catch Joe Firestone live right now talking MMT and the fiscal cliff. h/t @deficitowl
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