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View Diary: Guess Who’s America’s Largest Creditor (Hint: It’s NOT China) (160 comments)

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  •  Rubbish (9+ / 0-)

    Money Supply has not been increasing at a rate that is different than historical standards.

    After the Fed purchased troubled assets (TARP) to save the economy, they have since been using proceeds from the natural life of these 'troubled-assets' to purchase Treasuries through the QE program.

    Moreover, it is not about the amount of debt, but ability to pay.  You'd likely be surprised to note that the U.S. pays less to service the debt today than when President Bush was in office.  And since the economy is far larger today, we can better afford our debt.

    Lastly, everyone who complains about the cumulative debt should be asking what is the debt-to-revenue ratio of large corporations.

    The U.S. can afford it's debt.

    •  The US doesn't have debts, it has obligations (3+ / 0-)
      Recommended by:
      JesseCW, ozsea1, Alumbrados

      which it satisfies through creating dollars out of thin air.

      •  Debt = Obligation (0+ / 0-)

        The definition of a debt is an obligation to repay.

        You've said nothing that makes sense of dollars and cents.

        Just to reiterate, Money Supply-GDP ratio today is not vastly outside historical norms and would be far closer to those norms if republicans awarded the same spending tools to President Obama as were afforded to both Presidents Reagan & Bush.

        In other words, the Federal Reserve is doing everything in their power to meet their mandate because republicans in Congress are denying to a democratic president the very tools that have proven to reverse the course of recessions - government spending.  And republican intransigence is even more delusional since it was their policies of deregulation that brought the economies the world over to their collective knees.

         

        •  Debt for someone with a money making (0+ / 0-)

          machine is not like a household's debt.

          Households need to earn money and can go broke.

          The US issues money and can never go broke.

          It makes more sense to use a different word than "debt" to describe  -  the obligations - the US takes on and satisfies by creating dollars out of thin air.

          It would make us less likely to confuse national with household finances, which are starkly different.

          •  People in households die, governments & (0+ / 0-)

            People in households die, governments & corporations do not die.

            Governments are closer to corporations.

            I NEVER equated government obligations to household obligations.

            Take a look at debt-to-revenue of a large corporation.

            Oddly enough, looks like government financing.

        •  BTW: I agree that the fed gov should create (0+ / 0-)

          some dollars out of thin air, and monetary policy doesn't cut it.

          And also, bonds don't represent debt.  They're no longer issued against our gold holdings.

          We only owe interest payment debt, which pay off by creating dollars out of thin air.

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