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OfflineFalcon91Wolvrn03
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Re: We really should cut the defense budget [Re: DieCommie] * 1
    #16261025 - 05/21/12 02:21 AM (8 years, 1 month ago)

I'll put it in different terms.  With a balanced budget, everything is a trade off.  If you cut here, you gain there, and you debate what the country’s priorities are.

However, with deficit spending, every deficit dollar is an extra dollar in the economy that appears that otherwise wouldn’t be there.  So it helps the economy today, but cost us later.  Similarly, cutting from the deficit has zero benefit today, (although it lowers costs in the future).  It’s money that simply goes away; it doesn’t show up anywhere else (though in the future, we’ll have less debt).

What leader wants to take from today, so that the next guy can better off?  As Enlil said, it will only cost jobs if we reduce the deficit.  No one would be better off today.

That's why deficit spending should never be allowed, unless the economy is serious trouble and in need of help.


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InvisibleEnlilM
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Re: We really should cut the defense budget [Re: Falcon91Wolvrn03]
    #16261547 - 05/21/12 07:22 AM (8 years, 1 month ago)

Quote:

DieCommie said:
You can do that with debt too though. :confused:



This is irrelevant...the whole point of cutting spending is to reduce deficit...not to spend the same money elsewhere...

If you cut the amount you borrow by 500 billion and spend 500 billion less on defense, that 500 billion is gone...it's not in someone else's pocket...it's not going to another person to create jobs...it never existed..

The 1.4 trillion dollars that we will borrow this year is created out of thin air...If we borrowed .5 trillion less..there would be .5 trillion less created out of thin air and therefore not available to go to anyone...private or public sector.

Creating jobs is a noble goal, but it's just shoveling shit against the tide when we're borrowing more every year.  Zappa has this dream that the national debt will be paid off, but that's not going to happen.  The best we can hope for is that we will get to a point where the national debt is no longer being added to, and inflation makes the debt a less significant amount of money.

The country is like a family that gets 2-3 new credit cards every year and maxes them out.  It doesn't matter if they keep getting pay raises...it won't ever be enough to outpace the amount of debt that is amassing.  It wouldn't matter if we had 0% unemployment in this country.  That would not create enough revenue to keep up with the national debt we are amassing.


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Offlinezappaisgod
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Re: We really should cut the defense budget [Re: Falcon91Wolvrn03] * 1
    #16261791 - 05/21/12 10:21 AM (8 years, 1 month ago)

Quote:

Falcon91Wolvrn03 said:
I agree with Enlil on this thread.  His arguments are correct.

Here's my observation on zappa.  If you ever even suggest that anything the Government does might be good, his brain switches to "does not compute - must use ad hominem attacks" mode.





What ad hominem?  In what way is he correct that we can borrow and borrow and borrow and never get the bill?  Most people know that the piper gets paid, one way or the other.


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Offlineqman
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Re: We really should cut the defense budget [Re: Enlil]
    #16261984 - 05/21/12 11:42 AM (8 years, 1 month ago)

Quote:

Enlil said:
Quote:

DieCommie said:
You can do that with debt too though. :confused:



This is irrelevant...the whole point of cutting spending is to reduce deficit...not to spend the same money elsewhere...

If you cut the amount you borrow by 500 billion and spend 500 billion less on defense, that 500 billion is gone...it's not in someone else's pocket...it's not going to another person to create jobs...it never existed..

The 1.4 trillion dollars that we will borrow this year is created out of thin air...If we borrowed .5 trillion less..there would be .5 trillion less created out of thin air and therefore not available to go to anyone...private or public sector.

Creating jobs is a noble goal, but it's just shoveling shit against the tide when we're borrowing more every year.  Zappa has this dream that the national debt will be paid off, but that's not going to happen.  The best we can hope for is that we will get to a point where the national debt is no longer being added to, and inflation makes the debt a less significant amount of money.

The country is like a family that gets 2-3 new credit cards every year and maxes them out.  It doesn't matter if they keep getting pay raises...it won't ever be enough to outpace the amount of debt that is amassing.  It wouldn't matter if we had 0% unemployment in this country.  That would not create enough revenue to keep up with the national debt we are amassing.





"the $1.4 trillion we borrow is created out of thin air"  Under normal market conditions, the bonds are issued onto the market, and $1.4 trillion worth of dollars is extracted from the economy to purchase the bonds. Today, the Federal Reserve buys almost all of the bonds, so yes, the money to purchases the bonds is created out of thin air (QE or money printing).

The $16 trillion of debt can never be paid off, we are getting to the point where if interest rates even moved just a few percentage points higher, just making the interest payments on the debt would be extremely challenging.

Tax revenue has basically been flat the last 12 months, what confirms there is no growth taking place in this economy, even if the GDP numbers say 2.0% growth.

The debt will be dealt with through currency devaluation, as we all know we can never pay the debt with today's dollars. The big losers in this game, US bond holders, holders of US dollars, and the average US citizen who now has 1/2 of the purchasing power than once had.


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InvisibleSlashOZ
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Re: We really should cut the defense budget [Re: qman]
    #16262200 - 05/21/12 12:39 PM (8 years, 1 month ago)

Quote:

qman said:
Today, the Federal Reserve buys almost all of the bonds, so yes, the money to purchases the bonds is created out of thin air (QE or money printing).





The numbers I'm finding show that the federal reserve holds about 12% of U.S. debt. The S.S. trust fund holds about 19% of our debt. China holds about 8%.


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"Life sucks but in this really beautiful way" - Axl Rose
"Life's a bitch and then you die that's why we get high cuz you never know when you're gonna go." - NAS
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"Look up at me I am God, look down on me and I am evil, look at me I am you." - Charles Manson.
"Don't question my reality." - Me (as far as I know)


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Offlineqman
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Re: We really should cut the defense budget [Re: SlashOZ]
    #16262292 - 05/21/12 01:01 PM (8 years, 1 month ago)

Quote:

SlashOZ said:
Quote:

qman said:
Today, the Federal Reserve buys almost all of the bonds, so yes, the money to purchases the bonds is created out of thin air (QE or money printing).





The numbers I'm finding show that the federal reserve holds about 12% of U.S. debt. The S.S. trust fund holds about 19% of our debt. China holds about 8%.




Fed balance sheet is listed around $2.8 trillion today, and they just started the QE program in early 2009. While it is listed that the Fed bought 61% of all bonds last year, the big banks bought the remaining amount, funded by the Federal Reserve.

Who is going to buy the debt for the remaining months this year and next year? China has stopped, Russia sold all their US bonds and wants no part of it, Europe, UK and Japan are all broke. The only buyer moving forward will be the Fed and its printing press, no other choice.


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InvisibleDieCommie

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Re: We really should cut the defense budget [Re: Enlil]
    #16262368 - 05/21/12 01:21 PM (8 years, 1 month ago)

Quote:

Enlil said:
Quote:

DieCommie said:
You can do that with debt too though. :confused:



This is irrelevant...the whole point of cutting spending is to reduce deficit...not to spend the same money elsewhere...





Why not?  Why isnt the point to spend the same money elsewhere?  I think the point could be and is both of those, to reduce the deficit/spend that money elsewhere/put it an another workers pocket.  For a lot of people the main point of reducing defense spending is to curtail the military, not necessarily save money.


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InvisibleEnlilM
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Re: We really should cut the defense budget [Re: zappaisgod]
    #16262643 - 05/21/12 02:31 PM (8 years, 1 month ago)

Quote:

zappaisgod said:
In what way is he correct that we can borrow and borrow and borrow and never get the bill? 



When did I say this?


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Offlinezappaisgod
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Re: We really should cut the defense budget [Re: Enlil]
    #16262679 - 05/21/12 02:40 PM (8 years, 1 month ago)

"The 1.4 trillion dollars that we will borrow this year is created out of thin air.."


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InvisibleEnlilM
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Re: We really should cut the defense budget [Re: zappaisgod]
    #16263020 - 05/21/12 04:11 PM (8 years, 1 month ago)

Quote:

zappaisgod said:
"The 1.4 trillion dollars that we will borrow this year is created out of thin air.."



And how is that an equivalent of "we can borrow and borrow and borrow and never get the bill?"


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Offlinezappaisgod
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Re: We really should cut the defense budget [Re: Enlil]
    #16266366 - 05/22/12 07:30 AM (8 years, 1 month ago)

Because you think money comes out of thin air.


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OfflineSeussA
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Re: We really should cut the defense budget [Re: zappaisgod]
    #16266493 - 05/22/12 08:53 AM (8 years, 1 month ago)

> Because you think money comes out of thin air.

With fractional reserve banking, every time a loan is granted, money is literally created from nowhere.  With a 0.1 reserve ratio, a bank holding $1000 in reserve can (working with another bank) create $9000 in loans.  Of the $9000, only $1000 exists, while $8000 was created from nowhere.  The system works great as long as there is not a run on the bank (where everybody tries to pull their deposits out at the same time) and as long as the entities that get loans do not default.

The people that don't like the federal reserve (it is really fractional reserve banking they have an issue with) dislike the fact that there is no way the hole created by the banks loaning money can ever be repaid.  The system creates a state where the size of the debt is always larger than amount of money that exists.  This is fine as long as the economy continues to grow, which tends to happen as long as the population continues to grow, but is very bad should deflation occur.


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Offlinezappaisgod
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Re: We really should cut the defense budget [Re: Seuss]
    #16266509 - 05/22/12 09:00 AM (8 years, 1 month ago)

Our dollar bills a re promissory notes.  All money is full faith and credit.  So are IOUs.  An IOU doesn't come out of thin air any more than any one of our dollars.  The non-thin air that is going to come due will either be the repayment of the debt or the devaluation of the currency.  Neither is thin air.  Both are costs.  Big costs.


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InvisibleEnlilM
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Re: We really should cut the defense budget [Re: zappaisgod]
    #16266571 - 05/22/12 09:30 AM (8 years, 1 month ago)

Quote:

zappaisgod said:
Because you think money comes out of thin air.



Believing that money comes out of thin air and believing that we can borrow ad infinitum without the bill ever coming due are not the same at all..

I guess that's why you're in construction and not in a field that requires precise use of language or reading comprehension.


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Offlinezappaisgod
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Re: We really should cut the defense budget [Re: Enlil] * 1
    #16266696 - 05/22/12 10:21 AM (8 years, 1 month ago)

Quote:

Enlil said:
Quote:

zappaisgod said:
Because you think money comes out of thin air.



Believing that money comes out of thin air and believing that we can borrow ad infinitum without the bill ever coming due are not the same at all..

I guess that's why you're in construction and not in a field that requires precise use of language or reading comprehension.



:rofl2:  Oh that was funny as fuck.  Wasn't the term "weasel words" invented to describe lawyer speak?


I'm sorry but IOUs and currency devaluation are no more thin air than the dollar itself.  It says so right on the bill.  "Federal Reserve Note".  If it came out of thin air there would be no cost.  Typical lawyer thinks contracts are imaginary.


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InvisibleEnlilM
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Re: We really should cut the defense budget [Re: zappaisgod]
    #16266702 - 05/22/12 10:22 AM (8 years, 1 month ago)

Again...what does any of that have to do with believing that we can borrow and borrow without the bill ever coming due?

If you're going to claim that I believe something, maybe you should have something to back it up other than pure speculation...


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Offlineqman
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Re: We really should cut the defense budget [Re: Seuss]
    #16266703 - 05/22/12 10:23 AM (8 years, 1 month ago)

Quote:

Seuss said:
> Because you think money comes out of thin air.

With fractional reserve banking, every time a loan is granted, money is literally created from nowhere.  With a 0.1 reserve ratio, a bank holding $1000 in reserve can (working with another bank) create $9000 in loans.  Of the $9000, only $1000 exists, while $8000 was created from nowhere.  The system works great as long as there is not a run on the bank (where everybody tries to pull their deposits out at the same time) and as long as the entities that get loans do not default.

The people that don't like the federal reserve (it is really fractional reserve banking they have an issue with) dislike the fact that there is no way the hole created by the banks loaning money can ever be repaid.  The system creates a state where the size of the debt is always larger than amount of money that exists.  This is fine as long as the economy continues to grow, which tends to happen as long as the population continues to grow, but is very bad should deflation occur.





Well said, most people don't understand that banks are very risky leveraged investments on the economy. They are money machines when there is solid economic growth, but when things turn downward for several years in a row, this leveraged investment becomes insolvent in little time. Most banks in the US and Europe are insolvent today, they are living a lie with mark to market accounting.


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OfflineSeussA
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Re: We really should cut the defense budget [Re: zappaisgod]
    #16266726 - 05/22/12 10:31 AM (8 years, 1 month ago)

> An IOU doesn't come out of thin air any more than any one of our dollars.

With fractional reserve banking, the money that backs the IOU does come from nowhere, and is backed by a promise that the borrower will repay.  When a loan is created, the bank does not actually possess the money that is being loaned (as an asset or as physical currency), nor does the bank borrow the money that is being loaned.  The money magically appears from nowhere, backed by the borrowers promise to repay.

As long as entities continue to borrow money, then money is created, therefore there is money to repay the loans.  Unfortunately, the hole created by the loans is always larger than the money being created (to fill the hole), thus the system will forever be in favor of the bankers.  Personally, as long as the bankers don't get greedy, then I don't view this as a bad thing because it allows the economy to grow very quickly.


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Offlinezappaisgod
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Re: We really should cut the defense budget [Re: Seuss]
    #16266746 - 05/22/12 10:38 AM (8 years, 1 month ago)

My entire point is that the Promise is not "thin air" any more than any other financial instrument.

If you want to make an argument that it is all a house of cards and magical thinking........


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InvisibleEnlilM
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Re: We really should cut the defense budget [Re: zappaisgod]
    #16266760 - 05/22/12 10:44 AM (8 years, 1 month ago)

Quote:

zappaisgod said:
In what way is he correct that we can borrow and borrow and borrow and never get the bill? 



This is what you said...this clearly assumes that I have claimed that we can borrow and borrow and borrow and never get the bill...

I think it's clear now that I never said anything of the kind...and you're just trying to twist other things I've said into the equivalent of that statement...

Are you that incapable of admitting that you're wrong?  By now, you know that I never made that statement...is it so hard for you to just admit it?


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