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View Diary: Lawrence O’Donnell Schooled GOP Strategists on Bill Maher On Republican Big Lie (VIDEO) (33 comments)

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  •  The so-called "national debt." (11+ / 0-)

    What happens is that the Treasury issues dollars to the Federal Reserve, which passes them out to banks, which then lend them back to the Treasury and collect a dividend, instead of being grateful that the money for which they obviously have no other use is kept safe for them. Then the Congress, which hasn't arranged for enough revenue (dollars coming back to cover the next year's expenditures) "borrows" from the Treasury and promises to cover the dividend expense, paying off their friends who aren't taxed on the income from dividends. This charade is how Congress rewards the people who fund their campaigns, even as they proclaim there's not enough money to meet their obligations to the citizenry.

    Why do they say the national debt should be retired? They're lying. But, there's also the half-truth that since the early 2000s their financier friends have been distressed by the fact that the dividends on Treasury bonds haven't been high enough and they still believe that, if there were less money floating around, the Treasury would have to pay a higher rate. What they want is to return to the rates of 1991 when 30 year bonds "earned" 8.1%, which served as the base.  That is, that was the rate on the most secure "investment" and any other lender could demand higher. The tech boom and then the housing boom were both fueled by the belief that 10% was a modest return on a loan, a not unreasonable expectation when one considers that government contracts routinely incorporated a profit of 15% over and above the contractor's expenses for labor and materials. (Keep in mind that health insurers are up in arms because they're supposed to pay out 85% of revenues to providers for care. Of course, since the Medicare administrative costs are 3%, the prospect of 12% profit is supposed to satisfy. That it doesn't is understandable in the context of 15%, figured after expenses and, if the expenses went up, so did the profit).
    American enterprise, having long suckled at the federal teat, is not happy to be deprived.

    Free market = taking free goods to market for a profit.

    We organize governments to deliver services and prevent abuse.

    by hannah on Sat May 04, 2013 at 04:53:41 PM PDT

    •  Do you know when the last time we retired (3+ / 0-)
      Recommended by:
      caul, elwior, GreyHawk

      the national debt was, and what happened as a result?

      "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

      by kovie on Sat May 04, 2013 at 05:31:05 PM PDT

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      •  1835 was the only time (8+ / 0-)

        At Andrew Jackson's insistence. He vetoed every spending bill he could, including one to fund the first national highways. This was during a speculative land bubble. The crash that followed the bubble created predictable monster deficits, and nobody has tried to pay off the debt since.

        Jackson also shut down the Bank of the United States and gave state banks authority to issue bank notes, with equally predictable and disastrous consequences.

        When The U.S. Paid Off The Entire National Debt (And Why It Didn't Last)

        See also A Nation of Deadbeats: An Uncommon History of America's Financial Disasters by Scott Reynolds Nelson for the story of the Continental currency and the rest of the major financial catastrophes in US history.

        Ceterem censeo, gerrymandra delenda est

        by Mokurai on Sat May 04, 2013 at 09:33:49 PM PDT

        [ Parent ]

        •  Exactly (4+ / 0-)
          Recommended by:
          fumie, caul, elwior, GreyHawk

          This is why I asked. The only other time we did this was under Jefferson, with similarly disastrous results. Apparently capitalism requires continual public debt and frequent large deficits to function properly. To demand the retirement of the public debt and putting deficits ahead of stimulus is to reveal oneself to be either a fool or a tool. Yet another reason I'm not especially fond of Jefferson or Jackson as presidents (not a big fan as people, either).

          "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

          by kovie on Sat May 04, 2013 at 09:57:14 PM PDT

          [ Parent ]

        •  Even the conservatives know this. Remember (1+ / 0-)
          Recommended by:
          kovie

          Greenspan testifying for the Bush tax cuts.  He warned of the dangers of paying down the debt too quickly.

          With the Decision Points Theater, the George W. Bush Presidential Library becomes the very first Presidential Library to feature a Fiction Section.

          by Its the Supreme Court Stupid on Sun May 05, 2013 at 03:16:48 AM PDT

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          •  Or ever (0+ / 0-)

            Debt is what fuels modern capitalism, and has been for centuries. If you can only spend what you have on hand, you'll be spinning your wheels. Debt is the mechanism by which excess capital is reallocated, presumably efficiently and productively even if obviously not always. That wingnuts cannot grasp this or that it goes against their biblical moral code doesn't make it less so.

            "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

            by kovie on Sun May 05, 2013 at 06:11:19 AM PDT

            [ Parent ]

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