So to all radical lib Millennials out there

WuWei · May 24, 2019, 8:54pm

quoted giant text wall for that.

Jezcoe · May 24, 2019, 9:11pm

reflechissez:

Jezcoe:

reflechissez:

It’s not mutually exclusive. By definition, government expenditures are from tax collections. Whether it becomes debt, is a function of collection vs expenditure.

Okay… this is going to be a little long winded, which is why I couldn’t do it last night.

The parameters I am using is focused on sovereign debt, not State or Local.

When one looks at what the US debt actually composes of, one can see that there is a large swath of it that will never be paid off, nor should it be paid off, because it exists only as markers on a balance sheet.

Fully 27% of the debt is intragovernmental debt. That is debt that the United States Government owes to itself. That is debt that is simply a balance sheet problem… because how can a government owe money to itself? Especially when it prints the money.

Let us look at the rest of the 73% of the debt. Because that is the part of the debt that we actually need to worry about servicing. We can not worry about 16% of that debt… that is the part held by the Federal Reserve.

What we do need to worry about servicing is that the privately held debt and the debt held by other sovereigns. Or foreign held debt is around $6.5 Trillion. The break down of who owns it is here. https://ticdata.treasury.gov/Publish/mfh.txt

Banks, State and local governments, pensions, Insurance funds, etc etc own the rest… in the form of treasuries… usually as a hedge against downward market forces.

So… what does this all mean and what is my point?

Well… the original claim is that government expenditures are from tax collection. But that is not how our sovereign debt operates. Our sovereign debt operates as a funding mechanism for keeping money moving through the economy. We don’t create money. We are users of money, but we don’t create it. We create wealth and money is a representation of that wealth. Taxation is a way to redistribute that wealth to the common good… or bad depending on your opinion about things.

This is the fight over the last round of tax cuts. Tax cuts to people with a bunch of wealth does not really help the economy because there is little reason for them to spend that money into the economy. Direct payments to the lower rungs of the economic spectrum means that that money will get spent almost immediately.

But if the debt doesn’t really mean anything, then why not just print a bunch of money? Well… inflation.

So we know as a whole that the economy works better when money is cycling through it… from the bottom to the top and back again.

So this comes back to what the debt means and how it is used.

Debt is fine when it is used for things like spurring the economy in a recession. Debt for building out infrastructure is good because at the end of the day there are real and tangible assets. Debt for schools, debt for health care, debt for scientific advancement, debt that is in the public good. All of those thing are good uses of sovereign debt as long as what it takes to service that debt does not outstrip the ability of the long term economy to absorb the costs of servicing that debt.

Bad forms of debt. Giving people with a lot of wealth more of it. That is selling off the commons.

So to come back to the main point. Government Expenditures are from debt. Tax collections function as a way to redistribute the wealth created by that debt, to keep money flowing through the economy and to hedge against inflation.

So after that long and rambling post… I hope that it made a little bit of sense.

I really don’t know what this has to do with what I posted.

I am talking about how sovereign debt works.

It isn’t necessarily about collection vs expenditure since the main thing that has to be worried about is inflationary effects.

reflechissez · May 24, 2019, 9:16pm

I know how sovereign debt works. You really over complicated what I was saying.

Jezcoe · May 24, 2019, 9:17pm

HA!

Fair enough

WuWei · May 24, 2019, 9:32pm

Lib on Lib! Cease Fire! Cease Fire!

Eagle-Keeper · May 25, 2019, 11:55am

What you are ignoring is WHY the US is able to go into debt at the tune of over 22 trillion dollars. Why couldn’t Greece and Venezuela do that?

Jezcoe · May 25, 2019, 11:57am

Greece doesn’t have control of its own currency and Venezuela relies on a single natural resource to fuel its economy.

So there really is not comparison to the largest economic power whose sovereign currency is the world reserve.

Eagle-Keeper · May 25, 2019, 11:59am

And that’s my point it is our private sector economy and its global success that has given our government the ability to do what it does.

Jezcoe · May 25, 2019, 12:01pm

Well that and when the US was a rising industrial power the rest of the world was really interested in blowing itself up.

Plasmaball · May 25, 2019, 3:52pm

He has butt in his name.

carpe_diem · May 29, 2019, 12:39pm

Their ganna do what their told, like good little girls and boys. It doesn’t matter who their nomination is, or what they stand for. This is a generation raised upon electronics. And most of the social media in this country is owned and ran by Liberal Lobbyssts, and Liberal Donors. Like Buzz Buzz Jeffrey from Amazon(Feel the Buzz!! lol), Or tweet tweet from twitter, or Marky Mark Suckerberg from Facebook.

Most Millennials are to immature to think for themselves on a political bases, so the Liberal Media and Liberal Politicians do it for them. Why does anyone think that the Dumby Dem Dem Politicians want to lower the voting age in this country?

Most younger kids have no clue about politics in general.