MarvinSussman

Congress can easily spend more on entitilements Uncle Sam can't run out of fiat money. Deficit spending is good for the economy right now.

Every spent federal dollar not repossessed by the IRS is saved by the private sector. Our annual budget deficit is exactly equal to the annual increase in private sector savings. YES! DEFICITS = SAVINGS! No deficits, no savings! A tax deficit is a savings surplus. It is money left on the table for the savers by Uncle Sam because he didn’t need it to prevent harmful inflation and because consumers need it to consume. We do not have a “national debt”. We have a “national savings”. The bad “Debt Clock” is really the good “Savings Clock”. How can we have too much savings?

Confused

So , according to you we are paying $ 25 billion a month interest on our " savings " ? Not the way I imagined banking to work ...

Artemis

Right on Target :thumbup: :thumbup: :thumbup:

Artemis

you may have hit the nail on the head without realizing it. Companies take the subsidies or loopholes, while not creating more jobs here, but we as consumers give them their profits. That is a lose win scenario on us.

jonhatfield Loc: Green Bay, WI

I don't understand it either, but I do understand that in recession govt. spending and deficits are needed or at least I understand the theory. That the spending should be on infrastructure also sounds reasonable. I don't think the deficit & debt theory works if done carelessly--has to be investment.

Quite aside from macroeconomics, I'm puzzled by the strange microeconomic phenomenon of "cash rewards" for using a bank (big bank like BOA) credit card. One bank here in Green Bay even appears to be offering 3% for use of debit card--not sure how that works. Apparently these "cash back" gimmicks involve fees charged retail stores for sales involving customer use of credit cards. I can understand a service fee to cover services by the banks & a profit on providing the service but to add to that fee a 1 to 2 to 3% surcharge to be returned to the buyer to encourage use of the service to increase use and profit seems something else again...the equivalent of imposing a tax on the transaction...a tax paid by the seller but passed on to the buyers by necessary increased price. But the matter balances out, doesn't it, since the money comes back to the buyer. Except in my case, since I'm old fashioned and don't use cards, I'm "taxed" with no "cash back" and in effect am subsidizing this peculiar private "tax."

I'm not indignant about this practice, just bemused and, yes, confused. Can you imagine the rants & uproar on this forum if federal government collection & disbursement on sales transactions like this took place?

Confused

Yes , deficit spending is required for a recession . That part is true . As you have pointed out it needs to be targeted spending such as infrastructure that creates jobs and money in the economy . One must also note that the debt created needs to be paid off with the growth realized . Tax loopholes do none of that .

Artemis

You are not nearly specific enough on the different places Romney has income. If your referring to his dividends he collected, they were not taxed once before, that is earned income, which is why it is taxed.

MarvinSussman

We are paying $25B monthly interest on maturing bonds.

Our “national debt”, a debt in name only, a DINO, is the total value of all issued and still maturing treasuries. Who pays for the redemption of mature bonds? It’s not the taxpayers! It’s the buyers of newly-issued treasuries who pay for the redemption of mature treasuries. It’s equivalent to a simple bond rollover done every day by bond-owners. In every auction, more treasuries are demanded than are available from the supply of new issues. Auction winners get the safest, most liquid US dollar instruments; the losers are stuck with bank risk. If it were ever necessary, the Fed could even create an artificial demand for treasuries by buying them in the open market with a few keystrokes. Where’s the awful burden?

Our Treasury does not borrow money like a home-buyer getting a mortgage. It is rather a custodian of funds, like a bank accepting money offered for certificates of deposit. While a bank with too many bad loans can certainly have too many maturing CDs, our non-lending, fiat Treasury cannot have too many maturing bonds unless its deficit spending is causing harmful inflation. And that happens ONLY in a war or emergency requiring rationing. It NEVER happens during a recession. During prosperity, banks are ALWAYS the sole cause of inflation, creating over $6 of credit for every $1 of deficit spending. To curb inflation, don’t restrict infrastructure spending for the future! Regulate the banks!

Comment Loc: California

:lol: :lol: :lol: :lol:

Comment Loc: California

You guys are the stupidest economists I have ever read. You believe that the USA con continue to eternity borrowing 17 trillion 100 trillion and the economy is not effected. You got to be the dumists bastards that ever loved. Under Jimmy Carte4r, the moral Democratic president after Nixon/Ford interest rates hit 22%. The United States does not control global interest rates. If interest rate rise to 10% that's more than half of annual spending. All of social programs would be wiped out. What is the name of the economic school you went to. I'll make sure my grand kids don't go there.

vernon

im not sure deficit spending does anygood it didnt do much during the deprecission when the war started we still had 18% unemployment.

MarvinSussman

Where did you learn economics? These are my teachers:
(You can get their books at Amazon for about $10)

* Frank N. Newman, former Deputy Secretary of the US
Treasury, recipient of the Treasury’s annual “Alexander Hamilton” award, author of “Freedom from National Debt” (Two Harbors Press)

* Francis X. Cavanaugh, US Treasury economist for over 30 years, author of “The Truth about the National Debt”: Five Myths and One Reality” (Harvard Business School Press)

*Warren Mosler, economist, author of “Seven Deadly Frauds of Economic Policy” (Oxford University Press)

*Dr. Stephanie Kelton, Chair of the University of Missouri Kansas City Economics Department, at NewEconomicPerspectives.org

Read a book! Get an education!

vernon

[quote=vernon]im not sure deficit spending does anygood it didnt do much during the deprecission when the war started we still had 18% unemployment.harrison was in a the throws of a very deep recession they cut taxes and and spending and the recession was defeted in coolidge adm.

Constitutional libertarian Loc: St Croix National Scenic River Way

I disagree, when you give a company a tax incentive to build a plant in your community, state or country that company then hires people to build it and work in it creating jobs. The property tax dollars not taken from the company are recouped through the sales of that companies products and the income of its employees.

Everyone wins

Comment Loc: California

I studied economics in college. I majored in business. I have studied eco for 45 yrs. You can read all kinds of books but, it doesn't make you an expert. I have also heard that wealth is stored labor; just more BS.