How should the US handle its debt?

[Robina]

You made a statement and you can’t explain it. Said statement is in direct contradiction of all I have read of MMT and you think I’m the dick?????


PS I am on another computer and can’t remember the JM password.

[The Artist formerly known as Sappho]

Why the fuck should I explain what your links say when you yourself answer with links instead of bothering to answer a question.

The following quote was in answer to my question asking you; If the US cannot run out of money, why is there a debt ceiling?

I guess because MMT is a new idea. Most seem to think the Budget of th govt works like the budget of a household or business.

Read about MMT here: http://www.polanimal.com.au/viewforum.php?f=42

Can’t do it for internal use—printing money without goods being produced leads to inflation.

No one in the US would argue that the interstates are useless yet they are the results of Keynesian spending

So following your example...

You want to know what is meant by the currency being pegged to labour costs, well, you can read all about it in here: http://www.polanimal.com.au/viewforum.php?f=42

That's where I discovered it.

[The Artist formerly known as Sappho]

Lefty, I'm very impressed with your understanding of what's going on up here in my hemisphere of the world. You've written it beautifully. I want Obama to do something. They are focusing on the wrong things in Congress. I want our military brought home from Iraq and Afghanistan immediately, our veterans' issues and concerns respected and tended to once they are home, and our tax dollars to go towards employment, small businesses, affordable housing, affordable medical care, and education for the middle classes and the poor, right here in America.

With what Annielaurie? Your government is broke.

As of today, since the debt ceiling breach on May 16, the Treasury has plundered about $206 billion from the two primary retirement accounts: the G-Fund and the Civil Service Retirement and Disability Fund, according to calculations performed by Stone McCarthy. The full breakdown for sticklers is provided below, however what is more important is that with just 4 weeks left until the D-Day, there is about $62 billion in available debt ceiling stretching options. In other words, Tim Geithner has burned through 75% of his dry powder just 50 days into the debt ceiling breach. What happens in the next few days - Stone McCarthy gives the full breakdown "Based on our projections for marketable borrowing and trust fund flows, we think Treasury would need to use about $37 billion of that $62 billion in July, and would exhaust the rest with the settlement of auctions on August 1. If things go down to the wire, Geithner could create a little more room by declaring that the Debt Issuance Suspension Period will last longer than the original May 16-August 2 timeframe, which would be reasonable if Congress hasn't acted by August 1 or August 2." Said otherwise, with the market still completely ignoring the debt ceiling situation, if nothing has changed by the last week of July, it will once again, very much retroactively, panic.
http://www.zerohedge.com/

Now, lets return this thread to reality for the sake of Annie at least. MMT is not reality. It could be, but is not yet. Our monetary system is still very much grounded in the ideas of the gold standard and that is why there is a debt ceiling and that is why the debt ceiling and the need to increase it and the political pressure to leave it as it stands and wear the consequences, tea party style, is such a contentious issues atm.

[The Artist formerly known as Sappho]

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

This was before he became the President. Otherwise, no comment necessary, the words speak for themselves.

[The Artist formerly known as Sappho]

Republican leaders orchestrated a series of public moves intended to soften the blow for conservatives. They agreed to give the House an opportunity to vote on two top conservative priorities: a so-called cut-cap-and-balance bill, which would order $111 billion in cuts in federal programs for 2012 and impose a cap on future spending, and a constitutional amendment that would require a balanced federal budget

So, the Republicans are going to hold the debt ceiling to ransom. Of course none of the above will come into law, however, it does show that an emergency bill that raises the debt ceiling will come at a cost of some kind. Republicans are not going to give that bill their consent without first securing some benefits for themselves. And the bar has been set very high, as we can see in the above quote.

Either way, Wall Street benefits and the US people don't.

Oh if only they would listen to the nobodies Monk and Leftwinger... they've got this whole thing sorted. Just print more money. It's a MMT reality out there. The US can't ever run out of cash. And it is more cash solves the problem, apparently. Don't ask them why k; Unless you want links to MMT sites that don't actually answer that question.

[Leftwinger]

This is the first time I've been back since Wile E fell over a cliff and nothing has changed - he still hasn't answered the question. Because he clearly doesn't understand what he's talking about.

I see the chief reasons as to why the US doesn't just do this or just do that as that policy makers exist in an iron-clad ideological box. Thinking outside that box is strictly forbidden. When Lister proposed that the micro-organisms whose existence had recently been discovered were the actual cause of infection, and proceeded to sterilize everything and everyone in his ward before performing surgery, the medical establishment pilloried him. The upstart was questioning the established wisdom. Deaths due to infection fell by an amazing ratio in Lister's ward, while his colleagues - knowing they were right and he was an idiot - went on killing huge numbers of patients by operating in unsterile environments, even though Lister had conclusively proven that he was correct.

Being right was more important to them than saving lives.

Of course, if we believe that the US actually does have to borrow it's own currency of issue before spending ahead of tax revenue, we might want to ask oursleves the question - where do US dollars come from? How are they created? If we can't answer that then all questions as to what they can and can't do are pointless.

[The Artist formerly known as Sappho]

This is the first time I've been back since Wile E fell over a cliff and nothing has changed - he still hasn't answered the question. Because he clearly doesn't understand what he's talking about.

I answered the question with the same level of coherence and dedication that Monk showed my question. He set the standard, not me. I asked for and offered good will, he spat upon it, thus resetting the standard.

Here's that answer to his question, just in case you missed it. http://www.polanimal.com.au/viewforum.php?f=42 Equally, it was the answer he gave to the question I asked of him. You got a problem with that, go take it up with Monk the trend setter.

[boxy]

Call me insane... but I'd rather make the govt justifying taxing me, than to give them a blank cheque to just spend on whatever they deem necessary without having to get the money from anywhere

Why Boxy?

Because you'll get some stupid mouth breather, like monk, getting into office, and just throwing cash left right and centre in order to buy votes, with no concern about the inflationary effects.

[Leftwinger]

Because you'll get some stupid mouth breather, like monk, getting into office, and just throwing cash left right and centre in order to buy votes, with no concern about the inflationary effects.

Can you point to any galloping inflation after all the stimulus spending?

Any problematic inflation at all that isn't related to natural disasters, oil price rises or utility cost rises? The sorts of things that interst rate hikes will have roughly zero effect on.

[Leftwinger]

Wile E...............

Nah, who gives a fuck?