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View Diary: Hands Off Medicare and Social Security! (82 comments)

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  •  Two things: (2+ / 0-)
    Recommended by:
    twigg, katiec

    first,

    Cheney, the ultimate hawk (3+ / 0-)

    couldn't give a flying fuck about deficits;

    and the stopped clock was correct twice a day. This is his correct moment.

    I wrote a comment on October 30 that said this:

    the 10-year Treasury yield right now is about 1.75%.

    CPI:

        Over the last 12 months, the all items index increased 2.0 percent before seasonal adjustment.

    Okay so far? You (we, collectively,) could borrow money for less than the last-12-months' rate of inflation. Less than the average rate of inflation over several decades (around 3%).

    Any business expert would tell you, if you can borrow money at LESS THAN THE RATE OF INFLATION, you should. You can spend it today and pay back, in essence, LESS later.

    The federal government could borrow a gazillion more dollars at 1.75%. Or borrow shorter term -- 5-year yield is only about 0.75%. So borrow lots of gazillions of dollars cheap.

    Invest. Invest in stuff like infrastructure, education, basic science, green space, environment.

    That kind of investment would have a higher rate of return than the borrowing rate.

    So to get back to your original point,

        You don't need budget offsets for disaster relief.

    Hell's bells, borrow whatever is needed for that and so much more.

    They are crazy not to.

    The second thing is this:
    Us, we, Americans hold the debt.
    Just makes me smile that you include yourself with us. :)

    Love is the part of us that lasts. Share it while you can.

    by Melanie in IA on Mon Nov 12, 2012 at 07:28:04 AM PST

    •  and btw, (1+ / 0-)
      Recommended by:
      twigg

      I do and will always love the term "flying fuck."

      Love is the part of us that lasts. Share it while you can.

      by Melanie in IA on Mon Nov 12, 2012 at 07:35:44 AM PST

      [ Parent ]

    •  Heh ... (1+ / 0-)
      Recommended by:
      Melanie in IA

      Melanie ... This is my home :)

      I hope that the quality of debate will improve,
      but I fear we will remain Democrats.

      by twigg on Mon Nov 12, 2012 at 07:38:39 AM PST

      [ Parent ]

    •  If the government is We The People, then it can (2+ / 0-)
      Recommended by:
      Melanie in IA, twigg

      be said that we owe ourselves money.  And since we also create money out of thin air, we can owe ourselves an infinite amount of money.

      No problem.

      •  Up to a point, yes (2+ / 0-)
        Recommended by:
        Melanie in IA, johnny wurster

        There does come a point where, if we simply print too much money, inflation will rise and the dollar would be devalued.

        Also, the smaller the deficit then the more dollars available for spending on real things that help people ...

        On the other hand, creating a strong economy will actually reduce the deficit simply through growth ... There is no imperative to actually repay it as any kind of current priority.

        I hope that the quality of debate will improve,
        but I fear we will remain Democrats.

        by twigg on Mon Nov 12, 2012 at 07:55:29 AM PST

        [ Parent ]

      •  Well, at our best we aren't actually (1+ / 0-)
        Recommended by:
        johnny wurster

        creating money "out of thin air." Yes, we can print money, but too much money created that way leads to inflation. We can borrow money, which is what I'm talking about above. But it creates the obligation to pay it back. Just as with any borrowing, that has to make sense from a long-term investment standpoint. Other ways of creating money include making it easy for individuals and businesses to borrow. There is a multiplier effect that happens with borrowing, which allows for economic growth. When the economy is relatively strong, this is the best way to create money and growth. When the economy is weak, there is less demand for borrowing by individuals and businesses, and in these times, interest rates tend to be low, and it makes SENSE for the government to borrow instead.

        Love is the part of us that lasts. Share it while you can.

        by Melanie in IA on Mon Nov 12, 2012 at 07:56:29 AM PST

        [ Parent ]

        •  But what does "borrowing" mean for a ISSUER (0+ / 0-)

          of  the money it "borrows"?

          Where does the money come from that individuals borrow?  From the issuer of our currency, right?  Thus, there has to be deficits so that individuals have a currency to use....  When you borrow you get brand new dollars in your pocket.  They are new to you.

          When the US borrows, it borrows dollars it has already  spent into existence.  It says:  Here's some dollars, now I'll borrow them.  Lol.  

          It's just like if you had a money making machine in you kitchen, only used that money for all your purposes, and then decided borrow some of it.  Who would you owe?  Yourself.  NOT some third party.

          •  I don't know where you get your ideas (0+ / 0-)

            about money. You seem to miss the point that when the US issues debt aka borrows money, there is someone who is lending the money. I am lending the money. Primarily I am lending it indirectly, but I am a lender. And I expect to be paid back. If the money machine in the kitchen keeps pumping out more bills, the dollars with which I'll be paid back will continue to devalue. Believe me, pretty soon, I won't be willing to lend anymore, nor will anyone else.

            There IS an actual lender for each dollar borrowed. It is not simply the US lending to the US. If that were the case, perhaps your premise would work, but it isn't, and it doesn't.

            Love is the part of us that lasts. Share it while you can.

            by Melanie in IA on Mon Nov 12, 2012 at 08:27:39 AM PST

            [ Parent ]

            •  But where did the dollars come from such that (0+ / 0-)

              you have a currency to use in you day to day life?Or to lend to the government?  Did you make them?

              Where do dollars come from?  They come from the US Gov.

              I don't make dollars.  You don't.  Only the fed gov does.

              The government makes dollars.  

              Before anything else can happen -- before it can borrow back those dollars, before it can tax those dollars.

        •  Inflation is the only issue for the US. Debt (0+ / 0-)

          never is.

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