Where is the USA getting the $$ for the stimulus package?
- Thread starter JEDI
- Start date
Nobody is, they are just printing money.. which causes inflation.. but there's only a 30% chance they will fail so its OK.
The US government can borrow and print money. China is one of the biggest lender right now, Japan too.
Around $300 billion is tax breaks ...
The Social Security surplus over the next 2 fiscal years is around $618 billion and will cover the rest ...
The Social Security surplus over the next 2 fiscal years is around $618 billion and will cover the rest ...
I believe everyone pays FICA payroll taxes (where the relief is targeted) so what is your point other than trolling?
Last time I checked the money in my wallet said Federal Reserve Note. Fancy words for debt. The US Treasury will just print more. 
- Aug 23, 2003
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From electrons that power the computers that generate all those ones and zeros zooming around from bank to bank.
It's not like they actually go and print $900 billion in bills. They add a few keystrokes to the tally.
It's not like they actually go and print $900 billion in bills. They add a few keystrokes to the tally.
Stunt
Diamond Member
- Jul 17, 2002
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Every nation in the world is seeing the potential drop in the US dollar and is worried that this will make US exports more attractive. Therefore they are offering stimulus, and lowering interest rates; it's a race to the bottom of the barrel for how much they can devalue the currencies.
Debt levels will drop because of the new value of money and people will re-gain confidence and continue the next leg of economic boom...
example. Buying a house with 100% debt in 1950 would have cost maybe $20,000 if you don't even consider paying that debt off and wait for the influences of inflation; that $20,000 is negligible relative to the current value of the house or your income. Debt will continue to exist and inflation is the way governments deal with it. They get the money first when it has the most value and allows them to increase spending without increasing taxes. It's an interesting little scheme they have going.
Debt levels will drop because of the new value of money and people will re-gain confidence and continue the next leg of economic boom...
example. Buying a house with 100% debt in 1950 would have cost maybe $20,000 if you don't even consider paying that debt off and wait for the influences of inflation; that $20,000 is negligible relative to the current value of the house or your income. Debt will continue to exist and inflation is the way governments deal with it. They get the money first when it has the most value and allows them to increase spending without increasing taxes. It's an interesting little scheme they have going.
What are you even talking about Stunt? Inflation exists for many reasons, namely to prevent wild disruptions to the money supply and potential deflation issues. Increasing spending without increasing taxes? WTF? If they are increasing spending it's to pay for more costly goods/services because of inflation, or to expand the government, taxes result one way or another if they have to take on more debt.
The money is coming from investors in US treasuries.
The money is coming from investors in US treasuries.
Freshgeardude
Diamond Member
- Jul 31, 2006
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There is a flight to safety for US treasury bills right now, which makes it easy for the fed to find potential buyers for it's debt, and at a low interest rate too. Despite all the doom and gloom talk, much of it justified, when people get panicked, they still look to the US government as the safest place to park their money. This works to our advantage in that when times get tough and we need more money, it becomes cheaper to borrow. It doesnt seem to me that they are printing money, but instead putting peoples money to work, money that would otherwise be dormant in the economy. Now the might print the money temporarily until the next treasury auction.
Elias824
Golden Member
- Mar 13, 2007
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Most of it comes from bonds, as I recall china is no longer buying up us debt, although im sure we are borrowing money from other countries. One interesting thing I heard is that since we are taking money from bonds other people have bought, we are pretty much just moving money from on person to another so it would be impossible for that to create any meaningful difference in the economy.
Relative to what? I heard something else funny too, that the US is actually trying to inflate the dollar so that we can actually pay back some of this debt.
Relative to what? I heard something else funny too, that the US is actually trying to inflate the dollar so that we can actually pay back some of this debt.
palehorse
Lifer
- Dec 21, 2005
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I believe that the SS surplus was already allocated for other pre-existing entitlement programs. Therefore, the SS surplus will in no way, shape, or form, cover the new "stimulus" package(s). Wishful thinking.
Right now, even Congress doesn't know how the fuck they (we) are going to pay for all of this bullshit. They're just adding it to "the tab"...
Vic
Elite Member
- Jun 12, 2001
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Sorry, I missed it... what inflation? The discount rate is effectively zero, the fed is printing money like crazy, and prices aren't going up (and are actually falling for many items, like houses, equities, and durables). And why? Because we're on the precipice of a deflationary cycle. Sounds like you might benefit from an econ course.
Well this bill was just signed a couple days ago. It will take some time for the inflation to occur.
Entirely likely; this is why Social Security plans are so dangerous and should be avoided-- because when the bill comes due the government almost can't restrain themselves from printing the cash instead of actually paying it back-- so they print it until everything is inflated to the point where the Social Security payments are affordable to the gov't (and by extension are then too small in real $ terms to live on).
It's not hitting us yet. Currently the dollar is gaining in strength WRT almost all other currencies (not vs. Yuan, Yen; but is against everything else).
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