U.S. Default: It's Not If But When

When do you believe the U.S.A. will default?

  • 1) Within 12 months.

    Votes: 0 0.0%

  • 2) Within 5 years.

    Votes: 0 0.0%

  • 3) Within 10 years.

    Votes: 3 11.1%

  • 4) Never.

    Votes: 18 66.7%

  • 5) Not before we nuke China first, who hold most of our debt.

    Votes: 6 22.2%
  • Total voters
    27
  • Poll closed .
SunTrader said:
The truth is ......... deficit spending is the illusion of a getting a free lunch.
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This too is hopelessly wrong. Just how do you think new base, i.e., Minsky's "outside money," gets into the economy?
Hint: The correct answer is not, "It's dropped from helicopters."
 
David's faith said:
No, debt has not to be repaid if it is inflated away. The truth is that with stagnating wages there is no true inflation which has made debt more severe in the recent years. But once ressources gain value as there is a shortage of it this will change.
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Debt can inflate away if it grows slower than inflation. When has that ever happened in this country in modern times?

And I mean less than real inflation, not Fed fantasy world inflation.
 
SunTrader said:
Unfortunately, or rather fortunately, it will likely not come to a head before I leave this world so I will be denied the pleasure of laughing in the face of the Keynesian kool-aid drinkers.
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It's bound to cheer you to know that even the great Keynes, the universally esteemed inventor of Macro-Economics, was imperfect... Keynes recognized the absurdity of a gold standard for a modern economy, and he realized that governments should spend in deficit during recessions. But he also advocated that in boom times governments should run surpluses and pay down the "debts" acquired during recessions.

Keynes apparently did not realize that nations that had " deep sovereignty" over both the money and the debt they issued, did not have real "debt" in the sense of the generally understood meaning of the word "debt." Instead, their "debt" liability would be better expressed as both a practical and social obligation to return to their "creditors" net buying power greater then the buying power they had "borrowed".

Now we know that so long as capacity for increased productivity is present, a nation that has "borrowed" in recession does not need to generate surpluses in boom times. Running surpluses in boom times could hold back productivity and opportunity. Surpluses, which remove money from the economy, may be useful when an economy is overheated, i.e., it has too much money relative to the maximum practical rate at which productivity and economic opportunity can advance and, in particular, relative to the desired level of private savings and investment.
 
SunTrader said:
That acronym is at least 10 years old.

Equally you are behind the times on economics.

C'est la Vie
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I don't do social media. One of my many failings. I compensate by knowing that deficits are how we get additional "outside" or "base" money into the economy. And although I admit to not having kept up to date on "acronyms," on a good day I can still spell the word. It's struggle enough for me to keep up to date on money theory.
 
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piezoe said:
I don't do social media. One of my many failings. I compensate by knowing that deficits are how we get additional "outside" or "base" money into the economy. And although I admit to not having kept up to date on "acronyms," on a good day I can still spell the word. It's struggle enough for me to keep up to date on money theory.
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Bullshit. Not doing social media is not a failing, but a strength.

And I am not up to date on the latest acronyms either, but I am surprised by how many of the younger folks who do not know even the simplest of older acronyms, like AFK and BAK.

Generational shift happening right before our eyes.
 
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