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Please explain: United States Default

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dank69 said:
So you propose that we ignore the experts and when I point out that ignoring the experts it how we got into so much debt in the first place you change the subject by saying we can't pay off our debt because the Fed owns the notes and when I point out that that doesn't make any sense you revert back to crying about how much debt we are in? What are you going to do next? Suggest we ignore the experts?
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What the experts suggest on taxes and spending will never pay off the debt, ever.
 
jackstar7 said:
Why not?

Or is this just another of your opinions?
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All of the money in circulation has been borrowed. How are you going to pay off a debt by borrowing more money?


eskimospy said:
Can you explain why the debt should be paid off? Not in terms of an emotional argument, but in terms of an actual economic one.
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How about national security?

Lets say we go to war with someone big like Russia or China. We need tanks, ships, guns, bullets, planes,,,,.

We have maxed out our line of credit. Where is the money supposed to come from?

China buying our debt gives china a reason to interfere with our government.

If we were debt free, or low debt, china would not be able to interfere with our government.
 
Texashiker said:
All of the money in circulation has been borrowed. How are you going to pay off a debt by borrowing more money?



How about national security?

Lets say we go to war with someone big like Russia or China. We need tanks, ships, guns, bullets, planes,,,,.

We have maxed out our line of credit. Where is the money supposed to come from?

China buying our debt gives china a reason to interfere with our government.

If we were debt free, or low debt, china would not be able to interfere with our government.
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I don't think you understand how our debt works. There are plenty of people who want to buy US debt, it is just that the interest rate might be higher. Where did you get the silly idea that we need chinese money to keep operating?

You realize that China buys our debt because THEY need to do it, not because we need them to do it, right?
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eskimospy said:
I don't think you understand how our debt works. There are plenty of people who want to buy US debt, it is just that the interest rate might be higher. Where did you get the silly idea that we need chinese money to keep operating?

You realize that China buys our debt because THEY need to do it, not because we need them to do it, right?
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I never said we "needed" chinese money.

Now explain to me why we should even have a national debt.
 
Texashiker said:
I never said we "needed" chinese money.

Now explain to me why we should even have a national debt.
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Nice attempt to move the goalposts. You said we needed to pay off the US debt for national security reasons. The reason you gave was wrong.

I asked a simple question, why do we need to undertake your course of action? It should be easy to answer.
 
eskimospy said:
Nice attempt to move the goalposts. You said we needed to pay off the US debt for national security reasons. The reason you gave was wrong.

I asked a simple question, why do we need to undertake your course of action? It should be easy to answer.
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I answered your question, you just did not like the answer.


jackstar7 said:
While this might be an answer to some question, it isn't an answer to mine.
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How are you going to pay off a loan if all you can do is borrow money?
 
Texashiker said:
I answered your question, you just did not like the answer.
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It's not a question of whether I liked the answer or not, it's that your answer was factually false. We do not need to borrow Chinese money for national security reasons.

So please, try again.
 
jackstar7 said:
Right. You have no answer. That's fine.
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I answered your question.

That money in your pocket, the US government is supposed to pay that money back to the federal reserve.

All of the money you will ever be paid has been borrowed.

All of the paper money in circulation has been borrowed.

Besides coins, the government does not mint its own money.

I guess the government could mint 17 trillion silver dollars and send that over to the federal reserve.


eskimospy said:
We do not need to borrow Chinese money for national security reasons.
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I never said we needed chinese money.

When you borrow money you become subservient to the lender. The government borrows money from the federal reserve. So therefor the government is a servant to the banks.
 
Texashiker what are you talking about in this thread? Isn't the same as the left hand borrowing money from the right hand?
 
GuitarDaddy said:
All these 5th grade credit card analogies, comparing the way government financing works to an out of control teenager with tapped out credit cards are not only incredibly niave and just plain stupid, but they are also very dangerous because they embolden the uninformed to believe a default is OK.

If you really think the answer to the problem is as simple as taking little johnny's credit cards away then you need to back away from the grown ups table and go back to playing with your tinker toys.

I'm not going to try and explain it in detail as the treasury secretary and the President have both done a good job of spelling out the reprocusions of a defualt in the past few weeks, but of course you won't believe the experts because your idiotic grade school interpretation better suits your message that big gub-o-ment and our commie socialist ubummer just wants to spends yo money.
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And this is where you do not understand.

1) It was a very exaggerated joke like response, to explain that since our debt KEEPS raising and NEVER falling, at some point, some day, We WILL default. It WILL happen, unless we make MAJOR changes that neither liberal nor conservative group wants that would purposely put the country into a recession.

2) Since it will happen some day, the sooner, the better. The quicker we can "fail" the sooner we can dig out of the hole, fix issues via forced to from our debtors and the way the world views us. Then we can slowly rebuild and get back on track and be where we want to be. Sometimes to take 2 steps forward you have to take 1 step back. Also let us not forget, the world works in unison now. We countries may hate each other, we may fight wars here and there, we may try to stealth info or secrets. But in the end, what would be bad for a chunk of the world, would be bad for it completely. Other countries will help shall we fall and stub our knee. So going into Default will not be as big an issue as people assume. Is it bad? of course it is bad. It is always bad to fail paying off the minimum on loans each period. But will it devastate like politicians and so called T.V. News experts? Doubtful. They like to paint everything a darker red than it really is. How else do media and politicians stay so well known?

3) Don't say "you are wrong" (even though it was a joke-ish; I mean I even said sell California. You cannot believe that was serious...?) and just go but I won't explain it. That is like saying "String theory is real. But I won't show you the evidence or explain it to you". So coming in here and claiming a post wrong, and not supporting why it is wrong, shows you are not a poster worth reading.
 
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diesbudt said:
And this is where you do not understand.

1) It was a very exaggerated joke like response, to explain that since our debt KEEPS raising and NEVER falling, at some point, some day, We WILL default. It WILL happen, unless we make MAJOR changes that neither liberal nor conservative group wants that would purposely put the country into a recession.
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Can you explain the economic basis for this?
 
eskimospy said:
Can you explain the economic basis for this?
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Am I wrong in that the debt has continuously climbed for a while now?

Interest is compounded off of principle + interest added, at some point that minimum interest payment will be too much to pay. It is simple math. Also The world is using an honor system when it comes to finances. There is no backing behind money anymore. So regardless, we will hit a point in which everything falls apart unless we strive to fix it now.

Saying we won't default means at some point the debt has to be moving in the opposite direction it has been. And no I will not argue which president increased it the most, because it doesn't matter. It was still increased with them all. All not defaulting now will do, is kick the can down the road for the next time we are about to default. And keep kicking, until we just can't kick no more.
 
diesbudt said:
Am I wrong in that the debt has continuously climbed for a while now?

Interest is compounded off of principle + interest added, at some point that minimum interest payment will be too much to pay. It is simple math. Also The world is using an honor system when it comes to finances. There is no backing behind money anymore. So regardless, we will hit a point in which everything falls apart unless we strive to fix it now.

Saying we won't default means at some point the debt has to be moving in the opposite direction it has been. And no I will not argue which president increased it the most, because it doesn't matter. It was still increased with them all. All not defaulting now will do, is kick the can down the road for the next time we are about to default. And keep kicking, until we just can't kick no more.
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No, that's really not true at all. You would eventually default if your income were to remain exactly the same and your debt were to keep growing, but the income of the US increases basically every year.

If you look at the history of US debt over the last century or so you will see that in almost no circumstances did the overall dollar value of our debt decline. (ie: our debt continuously climbed) If our economy grows faster than our debt, our debt/GDP ratio declines, which is the real issue.

To put it in easier terms, if you owe $10,000 and you make $5,000 a year you're in a lot of trouble financially. If you owe $20,000 and make $1,000,000 a year you're doing just fine. So there is never actually a need for the dollar value of our debt to decline, simply its proportion to our economy. It has done this many times.
 
Texashiker said:
Only because the federal reserve prints money out of thin air.
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That isn't income.

But to think that the income of the US is continually going to increases and that this isn't something we ever need to worry about as part of the equation is incredibly shortsighted.

I hope that this is the case, that the income continues to grow, but it is wishful thinking and nothing guarantees that, especially with more and more choosing to live off the government dole.
 
xBiffx said:
I hope that this is the case, that the income continues to grow, but it is wishful thinking and nothing guarantees that, especially with more and more choosing to live off the government dole.
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The majority of jobs being created are low wage, low skill jobs.

We can not be a world leader when companies like wal-mart make welfare part of their benefit package.
 
GuitarDaddy said:
-snip-
I'm not going to try and explain it in detail as the treasury secretary and the President have both done a good job of spelling out the reprocusions of a defualt in the past few weeks, but of course you won't believe the experts because your idiotic grade school interpretation better suits your message that big gub-o-ment and our commie socialist ubummer just wants to spends yo money.
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Experts?

Bwuhaha!

Obama, the community organizer, is now an 'expert" on financial matters?

BTW: Jack Lew is no financial expert either. No education in it etc. He's a lawyer.

Fern
 
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