Monday, May 9, 2016

Yahoo Finance pumping out more WRONG crap about Bernie Sanders and the debt

Yahoo Finance

Yahoo Finance is on a mission to be stupider than CNBC.

On a recent post, which looks like it was picked up from Associate Press, there's a claim that Sanders, if elected, would add $18 trillion in "debt" as a result of his programs and that would "blow a hole in the deficit."

Leave aside for a moment that the writer mixes up the "debt" and the deficit.


The "debt" is the total amount of dollars issued--over the entire history of our republic--that have not yet been redeemed for payment of taxes. That means it is the total net of dollar financial assets held by the non-government here and throughout the rest of the world.

The deficit is the difference between total withdrawals/spending and total deposits/revenues, usually expressed on an annual basis.

Anyway,the guy gets that wrong.

Next he says that Bernie's programs would add $18 trillion in "debt." He doesn't know this. Nobody knows this for sure, but let's say it's true. So what? In reality that is nothing more than ADDING $18T of dollar financial assets, as I've explained above. The highest quality and the most liquid assets in the world. Added.

And somehow that's supposed to be bad for the economy?

Okay, let's say he doesn't understand that, which clearly he doesn't.

So let's go and look at the last time we added $18T in "debt." That was the period from 1980 until now. In 1980 the national "debt" was $800 billion and today it's over $19 trillion, So we've added more than $18 trillion in debt.

And what happened?

The economy grew from $6 trillion in output (GDP) to $16 trillion. That's 170%, in real dollars. That means, adjusted for inflation.

They can look this all up. It's public information. But I guess it's just easier to make ridiculous statements that have no bearing in truth whatsoever. They figure you're just dumb and won't question it.

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