Topic: Is the US national "debt" an illusion? - page 5. (Read 6690 times)

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Erdogan's 10 Point program is a great place to start.  Of course, doing even a relatively small fraction of that would be almost impossible here (USA).

In general, whenever government gets involved, things get worse.  

I will grant the possibility of some exceptions like NASA and even experimental technologies that even wind up failing (the numbers for wind power apparently do not add up for example).  A government role in basic science that is only at a research stage (not nearly ready for commercial exploitation) might be a good thing.

But, we have seen that government is NOT SATISFIED with such roles, they want moar and moar and moar...  And we get to pay for it.  And the corruption is what is so galling (Exhibit 1: Solyndra).

Not revolution, but the debt is real, not an illusion,  and when it defaults, a lot of things will change fast. Fasten your seatbelts, say I.

Agreed, but is a revolution likely in the next few years? Or is raising the debt ceiling prudent while we negotiate a bridge to a more honest system?

Or is prolonged austerity necessary to wake everyone up?

No country should have debt. It's as simple as that. Debt for a country is either stealing from the future or stealing from your debtors if the country currency goes under. Sure debt speeds up things for businesses, but who here trusts their country to always do the right thing.

In fact, there is no debt burden if you can always borrow new money to pay out the old debt. The result of this game will be forever increasing debt, and forever increasing ability to payback the debt

Since those who borrow money will borrow more and consume more, and those who don't borrow money will work more and earn more, the borrowers become the driven power of economy

But still, this feels very strange, where is the fatal flaw of such a scheme?

Obviously everyone knows the debts of any country can't be paid.. but that doesnt matter to them.

Debts are not owed in a 1:1 relationship. It is a complicated web of debts and entities.

As a simplistic example: The US may owe money to a German bank. The German bank stands to make money off of that investment. Germany might owe money to a US bank. The US bank stands to make money off that investment. The two banks have no interest in having that debt canceled out because they are both making money off of it.

Money is debt, every country that wants to be rich also needs to have debt, it's just a part of our dreadful system..

Yes but realizing the "national" (government) wealth is politically impossible. The pitchforks will materialize at the thought of it, long before the change can begin.

I argue that the $18 Trillion national debt pales in comparison to the national wealth of the United States. There is no better example of this than the revenue generated from Obama's successful energy exploration campaign.



Imagine when you compare Russia's little debt with it vast natural resources!! This is why the US fears Russia, because Russia's potential far exceeds what the US has been able to create so far.

The debt is real, and it is ultimately owed to individuals.

Wealth is what people consume, and that is always the same as what is produced in the moment. So what the current people really can give to the unborn people following them, is the production structure. Due to QE and ZIRP, capital is misallocated and consumed. So in the future, there will be less wealth.

Most countries could clear out the debt using the state's activa. To fix a country, do:

1. Remove all constraints of money, go to private money and let the market decide. Stop QE and ZIRP.

2. Let the interest float, and let risk also trade in the market.

3. Stop backstopping banks and corporations, let the bad businesses die

4. Remove all taxes and subsidies.

5. Remove all regulations, replace with the rule of law, meaning if someone is hurt from careless persons or toxic waste, let the responsible pay (to the victim).

6. Remove all unneccessary public social programs. All are really unnecessary and destructive including for the recipients, but there will be a need for something in the transition.

7. Sell all public companies, not primarily for the profit, but to convert them to private ownership.

8. Fire most government officials.

9. Sell schools, medical facilities etc that is government owned.

10. Sell parks and public land.

You get the idea. Selling off government businesses was recently done in the Czech Republic with grand success.

You could end up with a solvent state, free and responsible individuals, and a flowering production, unseen in history.

Any other country with such high levels of debt/GDP would have a much lower rating from the rating agencies.
The US manages to get away with it because of its size.

The official plan is a forever increasing debt with a forever increasing consumption/income

Since there is no physical upper limit for the debt, does it really matter if you have one Quadrillion or Centillion dollars in debt? Especially when that debt have zero or negative interest like today

Central bank is like god, you can borrow whatever amount of money from them, and you can borrow new money to pay back the old debt, those borrowed money will create job and income, thus boom ...

It seems the whole scheme is flawless, but where is the achilles' heel of such a great plan?

Dosn't really matter how much you inflate worthless paper. 0 times 1000 is still 0.
You can say that it is big trouble, but in reality its just worthless fiat. a few zeros more dont make any change.
The only change is that your work is worth less. For the state a few zeros dosnt make any diffrence what so ever, they can just print more paper

There is no need to pay off the debt unless you change your monetary system. Central banks do a good job of portion sizing natural resources for humans. Obama could pay off the debt with a stroke of a pen. But once he did that, everyone would demand Bentleys in exchange for another 12 year presidential term. Not good.

I like the Fed a lot more than securitzed spyware - which is essentially all Bitcoin is.

"You can't fight city hall.  The only safe route is a cryptocurrency that can function like cash but also with price stability."

Isn't the very existence of Bitcoin an attempt to fight city hall? What is the underlying resource backing up Bitcoin? Scarcity and market manipulations? Sounds like fools-gold to me.

Or just gold, minus the utility.

Bitcoin is useless, outside of the rigged "currency" market it trades in. Oh, and I'm sure the NSA got a lot of good data with the innocent "data mining" program you installed on your hard drive.

It is as if the CIA and Federal Reserve set up a huge trap and you walked right into it.

I have an 800 Fico and great income. Are there any Bitcoin banks lending at a rate and term comparable to Fannie Mae's 4% 30 year mortgage?

Didn't think so.

Like you said, you can't fight City Hall. Let's just raise the friggin debt ceiling and return to life.

The issue is not as much the ratio of debt to wealth as much as it is the ability to pay off the debt.

I tend to agree with many of the forward-thinking viewpoints that are shared on forums like this. However, I feel there is misinformation being circulated regarding the US national debt. The core question that must be answered: What is the national wealth?

Private wealth in the US is almost $70 trillion. But dig deeper: What is the mineral wealth in our national parkland? What are the Rocky Mountains, Mendocino County, and ANWR worth? What is the aggregate oil wealth in public lands? What is the value of the US military in the jungle of international relations?

I argue that the $18 Trillion national debt pales in comparison to the national wealth of the United States. There is no better example of this than the revenue generated from Obama's successful energy exploration campaign.

When you take a look at the massive swaths of valuable land held by the federal government, it becomes clear that the total federally-owned real estate, oil, minerals, etc. within the borders of the USA could be valued in the quadrillions of dollars.

One thing has become increasingly clear to me: the United States HAS debt, but it is really not IN debt.

The purpose of the Federal Reserve is to govern the people through the money supply. The threat of hyperinflation or deflationary depression is exaggerated. The resource wealth of the United States - as well as the large, rich, taxable population - provides a backstop that keeps our currency strong, even in expansionary environments.

I believe this backstop is far more valuable than prior generations' use of precious metal reserves. I concede gold and silver are more tangible, but defining the national wealth by reserves of scarce metals is nothing more than a form of social brainwashing intended to keep resource-rich Americans feeling poor.

Conspiracy theorists and John Birchers who measure the national debt against gold reserves are engaging in monetary child's play. However, the Federal Reserve's ability to spend the past decade in crisis while hiding the money supply (M3) from the American public is brilliant. A brilliant scam that must come to an end in the United States, as it has in central banks throughout Europe and across the globe.

The strength of the dollar in FOREX markets in the wake of QE3 invalidates many conspiracy theories. As a market student and participant, I believe the dollar is legitimately strong and would remain strong through QE4, QE5, and QE6.

Is it time to end the myth of false scarcity? Is the easy answer - a dramatic increase in the debt ceiling to fund the Small Business Administration, Farm Service Agency, and regional banks - the best path for the US economy?

Recently an interesting statistic was released. The USA has fewer corporations today than 40 years ago, despite having three times as many citizens. If "corporations are people," do we just need more "people?"

Or is a multi-decade Japanese-style depression a better way to break the will of American men, break the daughters of the revolution into prostitution, seize American's weapons, and ultimately rejoin the British Crown and join the New/Old World Order?

I ask that question only half-sarcastically, because that appears to be the the intent of the current world order, and the path the United States is headed. Especially if either Hillary "Forester de Rothschild-RHODam" Clinton, or Jeb "Lehman is now Barclays" Bush are elected president.

This is serious business.

Sure, a new monetary system would be nice. But is a total revolution possible? Perhaps it is time to submit to reality, and finally admit that Reagan was right.

Mine eyes have seen the glory of the coming of a new hashtag.

Matthew Libman
Charleston, SC