Exploding debt threatens America

[madanthonywayne]

It is true that taxation will remove money from the private sector. And that will be the thing to do in the not too distant future. The Federal Reserve and Treasury have pumped a lot of cash into the economy by purchasing assets in order to keep markets liquid and prevent an economic disaster.

But as the economy recovers, the government will need to shrink the money supply in order to keep interest rates at acceptable levels and moderate inflation. When that time comes, next two to three years, it will be necessary to increase taxes in addition to reducing federal spending and selling the assets they have and are now purchasing.

Moderate inflation, eh? You mean, try to prevent the hyperinflation that seems inevitable given the way the Obama government is printing money and buying it's own debt? We've got Geitner over in China begging for more money and literally being laughed at by Chinese students! These students know enough about economics to realize that Obama has us on the an unsubstainable path that may well lead us to a worse fate than the one he's trying to prevent with all this spending. Hyperinflation worked out pretty well in the Weimar Republic, didn't it?

 

[joepistole]

Yes if the fed monetizes the debt we will see inflation. I would not call it hyperinflation but it would be substancial. And no one I know wants to see the US go through a period of hyper inflation.

This is just normal business...nothing to get ruffled about. The Fed is perfectly capable of reigning in the money supply when it becomes appropriate to do so.

China is not really relevant at this point. As long as they want to keep their exports going they are forced to buy US Treasuries. And the Chinese know it. They like to push folks around and act powerful...but they know the reality of the situation, just as we do.

We are no where near being close to the Weimar Republic. There will come a time when Uncle Sam is going to need to raise your taxes. And it will not be Obama;s fault. George to amassed most of the debt as well as destroying the economy. We now need to pick up the pieces and move forward.

 

[madanthonywayne]

I don't recall ever before seeing a US government official, hat in hand, being laughed at in a foreign country. I don't ever recall there being talk of the US government losing it's triple A status. I don't ever recall a time when 50 cents of every dollar spent by the federal government was financed by debt.

And I also don't ever recall a time when, beset by such fiscal problems, a president was still proposing a massive increase in government spending such as the government takeover of healthcare and the automotive industry.

We are in uncharted and dangerous territory here, and all you seem to do is make excuses for Obama.

 

[phoenix2634]

I was pointing out that every President who has been attacked or assassinated stepped on the toes of the Fed and their power to control the money supply.

... Yes, a interesting set of coincident.

:bugeye:
The Federal Reserve didn't exist until 1913.
Which means...

Garfield and Lincoln weren't stepping on the toes of the Fed.

And...

Reagan's assassination attempt happened in 1981.
4 years prior to the Gold Bullion Coin Act of 1985.


Now that is interesting.

 

[unexplained_mysterie]

Yes if the fed monetizes the debt we will see inflation. I would not call it hyperinflation but it would be substancial. And no one I know wants to see the US go through a period of hyper inflation.

You clearly have no idea about economics. to monetize usually means to make more banknotes or securities into currency. since we cant borrow anymore, we have to create more dollars for funding these projects. so the U.S.Treasury sells these note to the U.S. Federal Reserve in dollars. the Government got over 2 trillion dollars this way. the risk is since there will be over 2 trillion more dollars in our economy, the dollar will loose its value, making imports such as oil and corn go higher. this also has a negitive effect on unemployment and GDP growth.

This is just normal business...nothing to get ruffled about. The Fed is perfectly capable of reigning in the money supply when it becomes appropriate to do so.

"just normal business"If this was a business it would be in bankruptcy

"nothing to get ruffled about" tell that to the Congressional Budget Office!!

 

[pjdude1219]

I don't recall ever before seeing a US government official, hat in hand, being laughed at in a foreign country. I don't ever recall there being talk of the US government losing it's triple A status. I don't ever recall a time when 50 cents of every dollar spent by the federal government was financed by debt.

And I also don't ever recall a time when, beset by such fiscal problems, a president was still proposing a massive increase in government spending such as the government takeover of healthcare and the automotive industry.

We are in uncharted and dangerous territory here, and all you seem to do is make excuses for Obama.

Sorry but someone has to fix the problems your precious bush created.

 

[Buffalo Roam]

Sorry but someone has to fix the problems your precious bush created.

You call that fixing the problem? I call it a arsonist pouring more gas on the fire, 2 trillion + and counting to the problem, and that is all Obama's.

And that is all Obamas budget.

Now tell me who controlled congress since 2006?

Congress is who writes and legislates the budget, specifically the House, and that is Democrat, the Democrats are the Chairman of all the committees, no Bipartisan co-chairman under them, and they wrote and passed the budget bills, so who is responsible for the mess?

Can you say, Democrats and Rhinos? HMMMMMMMM!!!!!!!!

So your precious Democrats are just as responsible as Bush for the arson of our economy, and the Democrats are now the ones pouring gasoline on top of a major blaze that is the economy today.

 

[joepistole]

You call that fixing the problem? I call it a arsonist pouring more gas on the fire, 2 trillion + and counting to the problem, and that is all Obama's.

And that is all Obamas budget.

Now tell me who controlled congress since 2006?

Congress is who writes and legislates the budget, specifically the House, and that is Democrat, the Democrats are the Chairman of all the committees, no Bipartisan co-chairman under them, and they wrote and passed the budget bills, so who is responsible for the mess?

Can you say, Democrats and Rhinos? HMMMMMMMM!!!!!!!!

So your precious Democrats are just as responsible as Bush for the arson of our economy, and the Democrats are now the ones pouring gasoline on top of a major blaze that is the economy today.

The wrecking of the economy began long before 2006...more like 2000. Two the Dems did not have a majority in the Senate in 2006. The Senate was about equally split. Three the three largest insults to the budget were the Medicare Prescription Drug bill of 2005 and the Iraq War (an optional war). Both of those incidents committed congress and the president into future extreme financial deficits well into the future. The House Democrats tried and passed a bill in 2006 to strike the no bid provisions in the Medicare Prescription Drug Bill, but it never got out of committee in the Senate.

 

[pjdude1219]

You call that fixing the problem? I call it a arsonist pouring more gas on the fire, 2 trillion + and counting to the problem, and that is all Obama's.

And that is all Obamas budget.

No sorry the 2009 budget is bush's. once again showing you have this problem with facts.

Now tell me who controlled congress since 2006?

Congress was split in 06

Congress is who writes and legislates the budget, specifically the House, and that is Democrat, the Democrats are the Chairman of all the committees, no Bipartisan co-chairman under them, and they wrote and passed the budget bills, so who is responsible for the mess?

Who rolled over and gave bush everything mhe wanted so a bill would get signed.

Can you say, Democrats and Rhinos? HMMMMMMMM!!!!!!!!

Can you say bullshit. Same old republican shit blame everyone else for your shit.

So your precious Democrats are just as responsible as Bush for the arson of our economy, and the Democrats are now the ones pouring gasoline on top of a major blaze that is the economy today.

No their not they are taking actions that will fix it and you and yours are just sitting on your asses whining how everything isn't fixed all ready

 

[pjdude1219]

To mad, buffalo, and all the other supply siders. If you really cared about the debt you wouldn't be supply siders. Roughly three quarters of our debt was accrued under presidents that used supply side policies.


Please do us all Americans a favor and shut up. Let people whose policies don't have a history of running up record amounts of debt fix the problems you caused

 

[unexplained_mysterie]

To mad, buffalo, and all the other supply siders. If you really cared about the debt you wouldn't be supply siders. Roughly three quarters of our debt was accrued under presidents that used supply side policies.
And Keynesian economics didn't do anything to our debts?

Please do us all Americans a favor and shut up. Let people whose policies don't have a history of running up record amounts of debt fix the problems you caused

And Obama is going to fix all the problems from all those failed policies?? lol what a joke. he puts forth a 3.7 trillion dollar budget for his first year? failed policies how much is our government in the hole with all these social programs and unfunded obligations. this would put us in the tens of trillions of dollars. Obama still wants to add more of these programs. I would suggest you look at those programs unfunded programs before you talk about failed policies.

Source

 

[pjdude1219]

And Obama is going to fix all the problems from all those failed policies?? lol what a joke. he puts forth a 3.7 trillion dollar budget for his first year? failed policies how much is our government in the hole with all these social programs and unfunded obligations. this would put us in the tens of trillions of dollars. Obama still wants to add more of these programs. I would suggest you look at those programs unfunded programs before you talk about failed policies.

Source

I would suggest you understand what's being said before you go all attack doggy. and we would have been able to fund our obligations with out the influence of supply side economics tanking our revenues.

 

[Buffalo Roam]

No sorry the 2009 budget is bush's. once again showing you have this problem with facts.

Congress was split in 06

Who rolled over and gave bush everything mhe wanted so a bill would get signed.

Can you say bullshit. Same old republican shit blame everyone else for your shit.


No their not they are taking actions that will fix it and you and yours are just sitting on your asses whining how everything isn't fixed all ready

pj....

For 40 years up until the 1994 elections. Republicans then had control for 12 years, until Dems again won the majority in both House & Senate in Nov. 2006.

So since Nov. 2006 the House and Senate have been controlled by the Democrats, and now who writes the budgets?

And the Democrats controled both Houses in 2007-2008- and now in 2009.

The President can request a budget, but Congress, specifically the House writes the budget bill, and that has been controlled by the Democrats since Nov. 2006

We are talking about Obama's budget, and the spending that has occurred on Obama's watch, like the 787 Billion of TARP stimulus money requested by Obama and passed by the Democrats, that is all Obama's and the Democrats.

After taking office in January, Obama released a bare-bones version of his budget in February with a spending plan for 2010 carrying a price tag of $3.55 trillion. The White House has now revised up the size of the spending plan to $3.59 trillion.

The U.S. economy shrank at a steep 6.1 percent rate in the first three months of this year.

The new White House figures bring the deficit estimates closer in line with the non-partisan Congressional Budget Office, which has forecast a $1.85 trillion deficit this year and $1.38 trillion in fiscal 2010.

Now pj, citation and provide proof that this massive spending increace took place under Bush, since Obama took office on Jan. 20, 2009, at that time the last Bush budget showed a deficit of $482 Billion dollars, that is far short of 1.85 trillion dollars, since Obama has taken office, Obama has added

Obama hasn't had that support. His biggest legislative accomplishment -- the $787 billion economic stimulus bill -- passed Congress with scant Republican backing.

$350 billion dollars of TARP

Congress passed and Obama signed into law a record $787 billion mix of tax cuts, job-creating projects and aid to struggling states.

The president pledged up to $275 billion in federal aid to help stem a tidal wave of home foreclosures.

The Treasury Department and the Federal Reserve announced financial-rescue steps that could send up to $2 trillion coursing through the economy.

This is all Obama's spending, George has been out of office since Jan 20.

White House projects record deficit for 2009 - CNN.com
President Bush's budget chief blamed the faltering economy and the ... for the record $482 billion deficit the White House predicted for the 2009 budget year.
http://www.cnn.com/2008/POLITICS/07/28/2009.deficit/index.html

So now please provide citation and fact that these deficit numbers belong to George.

From a liberal icon, no friend of George's;

http://www.huffingtonpost.com/robert-l-borosage/read-it-and-weep-bushs_b_85044.html

Tossed out between the Superbowl and Super Tuesday, dead on arrival in a Democratic Congress, President Bush's last budget will sink without a ripple. But since John McCain and his rivals for the Republican nomination all pledge allegiance to Bush's policies, it is worth taking a short look at the implications.

A budget, after all, is a statement of values. Where your purse is so there is your heart, we are taught. The budget provides a snapshot of what the president considers to be national priorities. In his $3.1 trillion annual budget for FY 2009, with a deficit of $400 billion borrowed from the future, Bush tells us what is important.

Even they have only pegged George for $400 billion, in a budget declared dead on arrival by the Democrats, who will wait on Obama to take office before they will pass the 2009 budget.

And the Democrats declared Georges Budget dead on arrival and reinstated much of money from the budget cuts, that Bush wanted;

http://www.usatoday.com/news/washington/2008-02-03-bush-budget_N.htm

By Richard Wolf, USA TODAY
WASHINGTON —

President Bush set the stage Monday for an election-year battle over spending priorities by proposing a $3.1 trillion budget that cuts spending and taxes while more than doubling the federal deficit.

Bush sent his 2009 budget to Congress over the Internet, but it landed with a figurative thud on Capitol Hill. Democrats vowed to ignore most of the threatened cuts to Medicare and other domestic programs.

Yes, even Harry Reed knew what He was going to do to Bush's budget;

"He doesn't have us over a barrel this year, because either a President Clinton or a President Obama will have to deal with us next year," said Senate Majority Leader Harry Reid, D-Nev. "We are not going to be held hostage to the unreasonableness of this president."

Write it to suite the Democrats and their deficit spending ways.

And yes in their own words;

Much of the president's plan has little chance of passage, lawmakers and budget experts say. Nearly $200 billion in Medicare and Medicaid savings need congressional approval, which Democrats are unlikely to provide. "Dead on arrival," vowed Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee.

So again tell me that this budget and deficit belongs to Bush.

 

[spidergoat]

Democrats got the majority, they didn't get control. Not at Democrats can be relied on to vote in unity, and there is still the influence of lobbies and other corporate interests. Democrats still don't have control.

 

[unexplained_mysterie]

I would suggest you understand what's being said before you go all attack doggy. and we would have been able to fund our obligations with out the influence of supply side economics tanking our revenues.

The U.S. Government Accountability Office said on the entitlements due from Social Security and Medicare, estimated in 2007 that the unfunded obligations for Medicare and Social Security alone totaled almost $41 trillion for the 78 million baby-boomers.
Source

And now you want Obama to have universal health care? sure we can tax the hell out of people, charge high rates, inflation, high unemployment an unstable dollar anti-growth like we had in the 1970s because Obama's policies will take us there.

 

[joepistole]

You clearly have no idea about economics. to monetize usually means to make more banknotes or securities into currency. since we cant borrow anymore, we have to create more dollars for funding these projects. so the U.S.Treasury sells these note to the U.S. Federal Reserve in dollars. the Government got over 2 trillion dollars this way. the risk is since there will be over 2 trillion more dollars in our economy, the dollar will loose its value, making imports such as oil and corn go higher. this also has a negitive effect on unemployment and GDP growth.

"just normal business"If this was a business it would be in bankruptcy

"nothing to get ruffled about" tell that to the Congressional Budget Office!!

Did you read this? Your use of banknotes does no make sense. Monetizing the debt is when the Fed steps in and buys assets. It is doing that now. If the Fed never sells them they will be effectively monetized. If you know anything about the Fed you will know as mentioned in my previous posts that the Fed can also shrink the money supply buy selling those assets. That is the intent of TARP (to be repaid).

So yes the Federal Reserve has printed money and will continue to do so. But does that mean there will be inflation? No, because the Fed can also take back those printed dollars by selling the assets it purchased. I hope you can understand that concept. So if the Fed does its job, hyperinflation is not inevitable. And there is no indication that the Fed will not do its job. The Fed has in recent history been very agressive in keeping inflation low. That is one reason inflation has been a non issue for decades. And Fed Chairman Bernake has said on numerous occasions he intends to aggressively fight inflation if it should show some signs of returning. But as of now, there is no sign of inflation,nor is any expected for a number of years.

 

[joepistole]

The U.S. Government Accountability Office said on the entitlements due from Social Security and Medicare, estimated in 2007 that the unfunded obligations for Medicare and Social Security alone totaled almost $41 trillion for the 78 million baby-boomers.
Source

And now you want Obama to have universal health care? sure we can tax the hell out of people, charge high rates, inflation, high unemployment an unstable dollar anti-growth like we had in the 1970s because Obama's policies will take us there.

Entitlements are a problem. That is one of the reasons reform of the US healthcare system is so critical. Two we need to restore a tax structure that is more in line with already spent money. And need I remind you it was the Republicans that enacted the largest expansion of Social Security since FDR. Currently healthcare costs are almost 20 percent of GDP...roughly more than twice that of all other industrial countries. And in measures of quality, the US is going down hill. Reform of the US healthcare system is clearly needed for many reasons...including commerce and global competitveness.

 

[madanthonywayne]

Please do us all Americans a favor and shut up. Let people whose policies don't have a history of running up record amounts of debt fix the problems you caused

How you can say that with a straight face given Obama's record breaking spending is amazing.

 

[joepistole]

How you can say that with a straight face given Obama's record breaking spending is amazing.

He inherited all of it including the stimulus money. Give the man a few years to get on top of the mess. If Obama does not have a handle on it in 4 years, we can take action at the polls.

 

[unexplained_mysterie]

Did you read this? Your use of banknotes does no make sense. Monetizing the debt is when the Fed steps in and buys assets. It is doing that now. If the Fed never sells them they will be effectively monetized. If you know anything about the Fed you will know as mentioned in my previous posts that the Fed can also shrink the money supply buy selling those assets. That is the intent of TARP (to be repaid).

Here is how money is made.

1)Congress passes an increase the Fed debt limit of 1 trillion.

2)The Treasury now offers those bonds to the Fed against The taxpayers ability to pay.

3)The Fed buys these bonds and ads it to its checking account.

4)The Treasury writes checks against that credit

5) WE CREATED 1 TRILLION OUT OF THIN AIR!!!

6) usually at that point they are sold to banks, states, financial institutions and other nations, but lack of other buyers, the government buys them back and ads it to its debt.

The problem with this is that it puts the dollar at risk because there are now more dollars in our economy. I'm sure they will get repaid, not sure if they will get all of it back. Obama also wants to fund his universal healthcare this way, well 600 billion as the down payment. the cost of that is about 1.2 trillion to 1.6 trillion.

So yes the Federal Reserve has printed money and will continue to do so. But does that mean there will be inflation? No, because the Fed can also take back those printed dollars by selling the assets it purchased. I hope you can understand that concept. So if the Fed does its job, hyperinflation is not inevitable. And there is no indication that the Fed will not do its job. The Fed has in recent history been very agressive in keeping inflation low. That is one reason inflation has been a non issue for decades. And Fed Chairman Bernake has said on numerous occasions he intends to aggressively fight inflation if it should show some signs of returning. But as of now, there is no sign of inflation,nor is any expected for a number of years.

This makes no sense. how do you know there won't be inflation if there's no demand, people aren't buying and unemployment is 9.4% and going up. no one is putting it back into the economy.

What assets are you talking about, ITS MADE OUT OF THIN AIR!!!

We have seen inflation under Bernake when Bush was president, remember the high gas and cerial prices or when the Canadian Doller was worth more then the greenback?

China isn't happy with the Feds moves and is planing on buying 800 billion in gold. thats like two Ft Knox's Gold Vaults. it seems like they are betting big that that the dollar will fall in value and inflation will shoot threw the roof!!!

Source