Does the defecit matter?

It matters first in terms of promises made and kept (or not).

Additionally, if the choice is made to default (effectively) my monetizing the debt (printing money) this will have the effect of basically taxing (and stealing wealth from) people who save and people on fixed or relatively fixed incomes.

While I agree that the numbers are not very encouraging, and default is probably inevitable, taking the position that it doesn't matter how much we borrow in the face of this situation would be downright immoral. It would be the same thing as stealing.

Think of it at an individual level: Imagine you knew there was no possible way to repay your debts, and you had no intention to do so...but you keep borrowing money to buy goods and services that you need or want. In effect you are stealing from your lenders.

It's no different for a nation.

ive held a similar opinion to enumbers for a while.

The debt is impossible to pay back, and there is no point trying.

I think more damage will be done attempting to do the impossible than just carrying on as normal.

Basically, we know its inevitable that Western society is going to collapse some short time in the future and there is Nothing we can do about it. We might as well keep partying up to the point we all get slaughtered, than be miserable for the remaining few years up to the slaughter.

Its tough MJ1970, just tough. Remember - everything you own/have/saved has been created by this merry-go-round, in most part by stealing/exploiting from people and nations less fortunate than you.

Its just a consequence of dog eat dog Capatalism that the shit catches up with you eventually. Take your blessings that you've managed to go 41 years - maybe you'll get 50 years - of a good life. Most people on earth are born into the shit we created for them by our collective exploitation, so we could have easy lives. Tough shit - even trumptman knows his time is up...

Which we keep printing due to our persistent budget deficits.



Lending us money because we cannot execute any fiscal restraint is a predatory practice?



The situation is unsustainable. That much is true. The reality is that the socialist/fascist state has gotten us to this point. When you look at the budget it is primarily a welfare/warfare budget. This is what happens when you go down that road.

I don't know what your definition of capitalism is, but I will say that if you're implying this has anything to do with a free market economy, you're mistaken. The central part of this is government spending coupled with a government granted monopoly/cartel over the monetary, credit and banking system that has created the mess we're in right now. This is so obvious it cannot possibly be denied except through willful ignorance or propaganda.

You dont need to read too deep. Just make the most of the time you have left.

Its always been inevitable since inception, that tthe system was always going to rape anyone it could. We've done our raping, and it has given us a couple of hundred years af prosperity, but now we are the ones who are about to be raped.

We wanted to play the game while it worked for us, but it had to end someday. Bend over MJ, this IS going to hurt....

What system are you talking about?



What the fuck are you talking about?

Im talking about the pink unicorn that orbits Uranus. I appreciate that there is a certain level of intelligence needed to comprehend the discussion so I will go offtopic for a moment...

...Started 2nd year in astrophysics degree, finished 1st year in 5 months working my butt off - first assignment result back yesterday...88%

Hopefully I can finish this before society collapses...

If you're going to rant and babble incoherently, expect clarifying questions to be asked.

ok, lets go throught it line by line and see if we can discover where you got lost.

I said

The debt is impossible to pay back, and there is no point trying.

Is there any thing that needs further explanationthus far?

Since you seem to be making this far more complicated than necessary how about, instead, you simply answer my question:


In response to your statement:


I've even highlighted the relevant parts so you won't miss them.

Yes of course it matters. Most of that obligation is in the future and owed to one generation, the Baby Boomers which is why society will hand them a figurative silver bullet and go back to business as usual.


This might be your belief if you're a Keynesian, but other economic schools of thought don't see this outcome. They rightly see that many current government services have no unifying and multiplying effect. Many are costly, lengthy and cause many more problems than they fix. Most current government actions amount to a giant boat anchor and removing that anchor will allow more growth.

I've an entire thread filled with them. The grand boomer delusion is the belief that the dollar cannot be broken and that the U.S. economy sits astride the world as it did just after WWII. You can continually see how facts to the contrary of this just flummox and confuse them, thus my designation of it as a blind spot. However the U.S need not follow that delusion and I believe increasingly that is what these elections and the changes being wrought because of them are about. We've seen the Democratic party which loved to tag Republicans as the "Party of No" become the "Party of Go" as in literally fleeing the facts of the matter by running to nearby states to avoid votes.

My position has been that the Fed will attempt to run the money supply hot while decoupling benefits from inflation. This along with some deficit reduction plans that reduce the demanded benefits can bring things back into line. Much like how it actually requires a hell of a lot of calories to remain obese, it requires a hell of a lot of time and money to be this twisted and backwards, and as in the former example, health can be restored when proper action is taken.

The money they are lending us they got by selling us goods they've made.



It would unwind things alright. But probably not in the way you think.

Why have the chinese been lending us money, when we know we can print our own from thin air very easily?

Undoubtedly to avoid having to print that money and creating hyper-inflation. The Fed would rather slowly and almost imperceptibly erode people's wealth than to have it all dissolve and huge flash.

Yes, the Chinese government (and people) has been subsidizing American's purchase of Chinese goods.



Possibly.



I understand, the Chinese government (and people) has been subsidizing American's purchase of Chinese goods.



Yes it does. Correct. Specifically it gets loaned to the US government when the government prints up Treasury bills (promises to pay back the cash + interest) as a result of spending more money then it receives in taxes.



Not quite. You seem to be ignoring the deficit spending that starts the borrowing/lending transaction. And you should feel very badly "if we print that debt into extinction" because the end result of that will be quite bad.

Hmmm...there's so much to unpack in this little statement. The American government letting...exporting unemployment....

*sigh*



Sort of. Mostly you're right, but this play money (and it is indeed that) is deeply ingrained and used to transfer real wealth, typically from the average US (or Chinese) citizen to politically connected constituencies (like banks) and the government.



True. Let's just see what happens if the US decides to default (by monetizing) on their debts. Let's just see how well that works out. I'm betting quite badly.

Why is a dollar printed by the fed and different to a dollar lent by the chinese?

If it was the goal of the fed to imperceptibly erode peoples wealth, why wouldnt they just print the money slowly?

You seem to be awfully uptight about money. Shouldnt you be putting your trust in Jesus to see you through?

It's a difference in time basically. The dollar that the Chinese have is a dollar already printed. It has already devalued the dollars that existed before it was printed. A dollar printed today (or tomorrow) does the same thing just a day later.



That's what they've been doing for basically the last 100 years.



Not really. Understanding != uptightness. I understand what's going on and the dire effects it is likely to have to lots of people, sadly. But that's what happens when governments try to create money...they end up destroying people's lives.



I do. Do you?

I know. And the Chinese know too and have been steadily converting their dollar holdings into real wealth like land, factories, gold, etc. It's a slow draw down because they have a vested interest in not devaluing the dollar too rapidly....this would be the equivalent of having a dollar bonfire and having given the US all of those goods for nothing. It would be generous of them to have done so, but that's not their end game or goal. They are on the path to try an establish the Yuan as the world "reserve currency" and replace the US$.

But that's changing.



We'll see, because they are actually starting to do that.

I dont think its quite as simple as that. But anyway, thats just a consequence of the capitalist system based on fiat currency. Everyones happy to play the game - its like a big pass-the-parcel we played as kids, there are lots of prizes, but star prize - the last one - turned out to be a pile of shit. Oh well, too bad - it was known from the start that the merry go round wouldnt revolve forever.




defeated your own argument then. thanks for being honest.



So basically although it has transpired that through sleight-of-hand and threat of force that the western world has had it good, by exploiting everything and everyone for a hundred or so years - Now that the party is over and reality has come home to roost - It will mean that we might have to start living like the other 95% of the people in the world....well you should be grateful that you had it good for so long. It isnt a right, it was a priviledge.



Ive never been better. I remember that when the financial crisis kicked off I said right here that it was time to get your head straight, and that alot of people would be going mad shortly....Ive seen alot of mad, stressed, crazy people the last few years - I took my own advice, best dividends ever...

It pretty much is.



Agreed. A free market economy would be better on this issue.



I believe my comment was about the rate and speed of this money printing...the rate of inflation. But whatever.

The main reason China's doing so well is that interest on loans is much lower than in the West and the government mandates that the loans keep flowing.

but you say that we borrowed chinese dollars instead of printing our own to prevent inflation, then say we had been printing our own dollars anyway because it was the goal of the fed to imperceptibly steal our wealth....

No I didn't:


In this statement was an implication of the rate of monetization. The Fed (almost always) inflates. It's what it does. It's openly stated a fear of deflation (which is a funny thing to say because it is in control of both.) The Fed inflates. It has been inflating it has just been doings so slowly, almost imperceptibly over a hundred years. The debt has now gotten so high and the fear of the Chinese holding that debt now has some folks suggesting we just just monetize all of that debt (print it away). This would very likely result in some level of hyper inflation.



Yes, they have been doing this slowly over about 100 years. To monetize away the debt that exists right now would require creating more money faster than they've been doing.

Sorry if I was not clear enough.

Oh yessss you did...



Q. Why have the chinese been lending us money, when we know we can print our own from thin air very easily?


A. Undoubtedly to avoid having to print that money and creating hyper-inflation. The Fed would rather slowly and almost imperceptibly erode people's wealth than to have it all dissolve and huge flash.

How about hyperinflating away the debt, then adopting an Amero?

At this point I'm not really sure if you are deliberately misunderstanding me or not. I feel that I further clarified that statement for anyone who couldn't understand what I meant in the post above. But feel free to go on. You win...or something.

Why trade one fiat currency for another? Why not simply use real money. Something like gold and/or silver? Fiat monetary systems eventually collapse. We'll probably see that happen here with the US$ in our lifetimes.

I have reread, I dont feel you have clarified it enough.

Why are we borrowing chinese dollars to prevent inflation, if it is the feds goal to imperceptibly steal our wealth by printing more of our own money via inflation?

Who cares if they collapse? Its always been a confidence trick. You start again with something equally as valueless, and repeat the whole game for another 200 years.

Modern life for all its ills, was built using this sleight of hand.

someone banned that dollarcollapse guy years ago, he was pretty smart evidently.

OK. Thanks for saying so.