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View Diary: Hoboken: Why only three blocks were to be destroyed. (55 comments)

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  •  Public bonds, whether subscribed to by public (15+ / 0-)

    corporations such as states, municipalities or sports authorities, are a staple source of income (often tax exempt) for the money changers because of legislative directives that such "obligations" have to be paid first. So, even if the enterprise goes belly up (local and state governments used to be precluded from declaring bankruptcy), the lenders get their due. The financial fraternity makes much noise about risk even as they are constantly lobbying for legislative relief so their investments are both risk and tax free. It's an entirely symbolic enterprise which means that the parameters of the real world do not apply (there are no real limits, for example, to how many dollars an entity can accumulate, or lose for that matter), but the consequences in the real world in which people are deprived of their access to the necessities of life are quite real.
    What we have, as a result of this fixation on the symbols, is two economies -- the economy of finance and the real. Actually, there are three. There's also the shadow economy which manages to capture some of the tangible symbols and use them as they were designed to be used even as they evade their use being tracked. So, in the U.S. it is now estimated that the shadow economy amounts to about $2 trillion a year, double the federal discretionary expenses, but slightly less than the medical-industrial complex spend, $2.7 trillion at last count.
    This is not necessarily good or bad, unless one happens to think that we should know what's actually going on.

    Obamacare at your fingertips: 1-800-318-2596; TTY: 1-855-889-4325

    by hannah on Sun Jan 19, 2014 at 06:38:26 AM PST

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    •  Public bonds (0+ / 0-)

      Are a large part of the holdings of public entities, pension funds, etc.

      Ownership of public bonds does not indicate membership in the Predator class.

      Bankruptcy can indeed reduce payments to bond holders.

      There are classes of public bonds. Many are not backed by the full faith & credit of the issuer, but by a specified revenue stream.

      The shadow economy, by the way, includes everything not tracked for taxing purposes, drug lords, workers who get paid in cash, etc. again, broad generalizations about all these people and what they are doing needs a citation to be plausible.

      "Faced with the choice between changing one's mind and proving that there is no need to do so, almost everybody gets busy on the proof.” ― John Kenneth Galbraith

      by Urban Owl on Sun Jan 19, 2014 at 10:21:32 AM PST

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      •  If the federal entity were into revenue (0+ / 0-)

        sharing, it would not be necessary to borrow dollars from the investor class. Mandatory saving via pension funds is also a system designed to benefit the investor class, whose contribution to the building of capital assets is less and less.

        For a thorough discussion of the shadow economy look up anything Edgar Feige has published. He's about the only academic considering it seriously in the U.S. The euro zone has a few mover people covering it.

        Obamacare at your fingertips: 1-800-318-2596; TTY: 1-855-889-4325

        by hannah on Sun Jan 19, 2014 at 10:50:23 AM PST

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        •  Public bonds is more than federal (0+ / 0-)

          Since the topic (initially) was the NJ development, the bonds in question are state and local. There are good reasons for financing public infrastructure with debt at the a State & local level.)

          But your suggestion that there should be no federal debt begs the question of what assets would then be available for savers, e.g., the Social Security Trust Fund, to hold.

          (Investments and savings are two separate behaviors, linked by an accounting identity, but not the same economic actors.)

          You sound somewhat like a version of the MMT crowd, that wants to change everything about how government works, starting with the largest economy in the world.

          Thanks for the Fiege reference, will go find it.

          "Faced with the choice between changing one's mind and proving that there is no need to do so, almost everybody gets busy on the proof.” ― John Kenneth Galbraith

          by Urban Owl on Sun Jan 19, 2014 at 11:37:07 AM PST

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