At 1/25/13 05:00 PM, leanlifter1 wrote:
You are not making yourself look smart by saying that. Debasing of currency is not safe or smart. I am starting to believe you think that it's a smart idea that the military forces other countries to stay on the petrodollar and trade with debased worthless debt based currency aka USD. Debt is not an investment unless you are tyrant looking to enslave a nation and world.
You know, perhaps the biggest problem with your views is that almost no one else shares them. I'm sorry but there are too many factors working against your arguments, the flow of time being the least among them. On this I think we hold fundamentally different views about the nature of how economics should operate. The banking system as it operates today has been structurall unchanged now for almost two centuries, the only major difference is the loss of the gold standard which, to be honest, allowed for an unprecedented growth in the amount of wealth available to be claimed, which was a critical part of the American growth of the latter half of the 20th century. Without it, would there have been enough to go around? If not, what parts of our own history as we know may be different as a result of America's struggles to manage economically for the population growth we've had.
So while there may be drawbacks (which, by the way, continued to be minimalized as we continue operating the economic system we have, the repeal of Glass-Steagall was obviously a horrible idea, but I believe Dodd-Frank reinstated it (could be wrong - either way, new reforms are on the books to help prevent the incidents that caused the financial meltdown).
And given how debt has historically been used (outside of Iraq/Afghanistan/supply side economics), it has always been a benefit to our country. Following the Great Depression, public programs were set up as a social safety net to at least help people at the bottom feed themselves. Health insurance, social security, not to mention public works projects (new debt funded the highways that we drive on, as well as much of the infrastructure that we use today, ESPECIALLY the infrastructure supporting the world wide web. All of this added new debt. This is one reason why Republicans threatening to default on our national debt pisses me off, because they are disrespecting what much of that debt was used to build.
Not to mention, ever been on a payment plan for anything? Payment plans operate on the same principle of fractional-reserve lending. In this case, however, the collector is able to put on their books what would amount to revenue (the total price of whatever you bought/paid for), while allowing you to make lower payments over time. A small down payment is taken to initiate the plan, along with an agreement on how to pay the remaining balance over time.
I would also like to point out at this point that the whole "government spends too much" argument is bullshit - per capita government spending increased around 950$ for Clinton over his 8 years, rose 3,300$ over Bush's 8 years, but has declined 80$ over Obama's first term. That may not sound like a lot, but consider what that means - the out of control spending has been slowed, and has actually gone down. With another round of deficit reduction on the table, our debt as a percentage of GDP will fall, as well as slowing the raw growth of the debt itself. Over time, given the right sets of policies, that can eventually be made to go down, and I do agree with you that long-term survival for the US (I'm thinking 100yrs+ from now) could depend on managing our debt. But having debt is okay, as long as there is enough free money in the economy to keep it stable.
That's one of the reasons for the sharp increase in the deficit during 2007-2009. After 12 trillion dollars of wealth disappeared in a matter of weeks, there was that much less in assets to be taxed by the government, resulting a severe shortfall in tax receipts compared to prior years, combined with the deficits we incurred through spending.
I don't know if you've had those lessons drawn out for you, but there you go. Hopefully you learned something.