DC Tom Posted May 13, 2012 Share Posted May 13, 2012 what does enron have to do with debt creating money? It was basically their business model. And if public debt creates money, lower taxes leading to more debt would increase overall prosperity. So are you now arguing that decreasing taxes on the wealthy benefits the poor, as it inflates the money supply through increased debt? Link to comment Share on other sites More sharing options...
MARCELL DAREUS POWER Posted May 13, 2012 Share Posted May 13, 2012 The idea is that govt spending can be stimulative if it is used for investment rather than speculation. Our 40 year foray into a finance and service based economy is over. I agree we're all dead if we continue on our current path. a debt bubble is a mathemathical certainty in our system. the current money supply is always less than what is owed. if not there is massive contraction, if we go further in debt, we default, and we have massive contraction. the system will eventually implode... Link to comment Share on other sites More sharing options...
DC Tom Posted May 13, 2012 Share Posted May 13, 2012 a debt bubble is a mathemathical certainty in our system. the current money supply is always less than what is owed. if not there is massive contraction, if we go further in debt, we default, and we have massive contraction. the system will eventually implode... But that debt creates money. So if we DON'T borrow, we have massive contraction. Link to comment Share on other sites More sharing options...
MARCELL DAREUS POWER Posted May 13, 2012 Share Posted May 13, 2012 (edited) It was basically their business model. And if public debt creates money, lower taxes leading to more debt would increase overall prosperity. So are you now arguing that decreasing taxes on the wealthy benefits the poor, as it inflates the money supply through increased debt? no, all debt, public or private creates money, money=debt. the problem is that the debt is greater than the money supply, creating a perpetual debt crisis that gets bigger until it implodes. But that debt creates money. So if we DON'T borrow, we have massive contraction. its a lose, lose situation. for example, the credit card worth 1000$ is created from debt, which must be paid back on interest. but in order to get the interest, you need more debt to cover the lack of current money supply. like the vid said, its musical chairs, and eventually it contracts and implodes because debt get higher and higher with smaller and smaller deposits... Edited May 13, 2012 by MARCELL DAREUS POWER Link to comment Share on other sites More sharing options...
DC Tom Posted May 13, 2012 Share Posted May 13, 2012 no, all debt, public or private creates money, money=debt. the problem is that the debt is greater than the money supply, creating a perpetual debt crisis that gets bigger until it implodes. So basically, debt creates money, but creates less than the debt itself is worth. And that's a good thing, except when it's a bad thing. Link to comment Share on other sites More sharing options...
MARCELL DAREUS POWER Posted May 13, 2012 Share Posted May 13, 2012 (edited) So basically, debt creates money, but creates less than the debt itself is worth. And that's a good thing, except when it's a bad thing. tom, im simply saying its a fraudulent system and will implode. there will never be enough money in the money supply to cover the debt. because you have to borrow more and more to cover the new debt... if governments and people stop borrowing, credit stops, and we contract. ie were !@#$ed. if we continue to borrow, knowing full well that it will eventually collapse, we are !@#$ed. lose lose austerity equals collapse stimulus equals collapse you cant win, the money supply cant cover the debt unless it borrows more... and when they borrow more, they go into more debt... the only way out is a technological breakthrough.. Edited May 13, 2012 by MARCELL DAREUS POWER Link to comment Share on other sites More sharing options...
DC Tom Posted May 13, 2012 Share Posted May 13, 2012 tom, im simply saying its a fraudulent system and will implode. there will never be enough money in the money supply to cover the debt. because you have to borrow more and more to cover the new debt... if governments and people stop borrowing, credit stops, and we contract. ie were !@#$ed. if we continue to borrow, knowing full well that it will eventually collapse, we are !@#$ed. lose lose So the very concept of wealth itself - money - is what destroys the economy. Link to comment Share on other sites More sharing options...
MARCELL DAREUS POWER Posted May 13, 2012 Share Posted May 13, 2012 So the very concept of wealth itself - money - is what destroys the economy. yes, eventually... Link to comment Share on other sites More sharing options...
DC Tom Posted May 13, 2012 Share Posted May 13, 2012 yes, eventually... So the only successful economy is an economy not based on money. Link to comment Share on other sites More sharing options...
MARCELL DAREUS POWER Posted May 13, 2012 Share Posted May 13, 2012 (edited) So the only successful economy is an economy not based on money. all i know is that our current banking system will collapse eventually. the amount of private debt is nuts... and with globalization, that contraction could lead to extreme political/govt consequences. ie riots in the streets. who knows what will happen... like i said, the only way out is a technological breakthrough. this is not an opinion, it is fact. Edited May 13, 2012 by MARCELL DAREUS POWER Link to comment Share on other sites More sharing options...
DC Tom Posted May 13, 2012 Share Posted May 13, 2012 all i know is that our current banking system will collapse eventually. the amount of private debt is nuts... and with globalization, that contraction could lead to extreme political/govt consequences. ie riots in the streets. who knows what will happen... like i said, the only way out is a technological breakthrough. this is not an opinion, it is fact. You're an idiot. That's a fact, too. Link to comment Share on other sites More sharing options...
MARCELL DAREUS POWER Posted May 13, 2012 Share Posted May 13, 2012 You're an idiot. That's a fact, too. then explain how you cover the debt with less money in the money supply? you either borrow more, or you have austerity. if people cut back, dont borrow, the economy collapses if we borrow more, the economy collapses... Link to comment Share on other sites More sharing options...
Rob's House Posted May 13, 2012 Share Posted May 13, 2012 I hate to interupt the intellectual beat down Tom is currently administering, but the whole premise of this thread is idiotic on its face. We're pretending two types of debt are analagous when they are not. Most private debt is in some form of investment. Whether you take out a loan for a car and pay it off on time, take a bank loan to pay off your house on time, take a loan to build a business, student loans, etc. This debt is a way of financing something tangible. The private debt most similar to Government debt credit card. Specifically, the kind you run up going out to eat and taking vacations, or paying your monthly bills. Government takes a big loan to pay its bills when they come due, not so it can have the utility of its investment up front and pay for it in installments as its being used. Link to comment Share on other sites More sharing options...
MARCELL DAREUS POWER Posted May 13, 2012 Share Posted May 13, 2012 (edited) I hate to interupt the intellectual beat down Tom is currently administering, but the whole premise of this thread is idiotic on its face. We're pretending two types of debt are analagous when they are not. Most private debt is in some form of investment. Whether you take out a loan for a car and pay it off on time, take a bank loan to pay off your house on time, take a loan to build a business, student loans, etc. This debt is a way of financing something tangible. The private debt most similar to Government debt credit card. Specifically, the kind you run up going out to eat and taking vacations, or paying your monthly bills. Government takes a big loan to pay its bills when they come due, not so it can have the utility of its investment up front and pay for it in installments as its being used. i agree on the public debt, only the money supply cannot pay it back... its mathematically impossible. with private debt, just like when the govt borrows from the fed, it is paid back on interest. the amount owed in total private debt is waaaaaaay more than the actual money supply in circulation because of interest. its as simple as trying to pay back 10$ when you only have 1$. either you cut back, or you borrow more... its a pyramid scheme... you can slow it down from collapsing through bond markets or borrowing more, but eventually the debt gets so great that to many people lose and contraction occurs. hell, a massive margin call could trigger it tomorrow. Edited May 13, 2012 by MARCELL DAREUS POWER Link to comment Share on other sites More sharing options...
Alaska Darin Posted May 13, 2012 Share Posted May 13, 2012 i agree on the public debt, only the money supply cannot pay it back... its mathematically impossible. with private debt, just like when the govt borrows from the fed, it is paid back on interest. the amount owed in total private debt is waaaaaaay more than the actual money supply in circulation because of interest. its as simple as trying to pay back 10$ when you only have 1$. either you cut back, or you borrow more... its a pyramid scheme... you can slow it down from collapsing through bond markets or borrowing more, but eventually the debt gets so great that to many people lose and contraction occurs. hell, a massive margin call could trigger it tomorrow. Yep, you're an idiot. Link to comment Share on other sites More sharing options...
John Adams Posted May 14, 2012 Share Posted May 14, 2012 U.S. private sector debt is 250% of U.S. GDP. U.S. public sector debt is 100% of U.S. GDP. Can I get this right? Have you just compared the public, ie government, debt to private, ie, citizen or corporate debt? To make some point about how we need not worry about the public debt? Is that really your point? I don't think that's what you're meaning to say but maybe I'm wrong. Link to comment Share on other sites More sharing options...
BiggieScooby Posted May 14, 2012 Author Share Posted May 14, 2012 Can I get this right? Have you just compared the public, ie government, debt to private, ie, citizen or corporate debt? To make some point about how we need not worry about the public debt? Is that really your point? I don't think that's what you're meaning to say but maybe I'm wrong. My point is the key element hampering our economy is private sector debt deleveraging. We haven't seen private sector debt to GDP levels this high since the eve of the Great Depression. We are now at 250% of debt to GDP down from 301%. We are still at an unsustainable level of private sector debt. It's been 5 years since this began. If it takes 5 years to bring debt down 50% we are looking at a period of low growth no growth similar to what Japan endured starting in 1990 to the present day. Both Presidents can promise growth, but my contention is this won't happen via the private sector taking on more debt since we are record levels of private sector debt. So the only way to growth is via stimulus, something that will require higher govt tax revenues and/or higher government spending. Link to comment Share on other sites More sharing options...
DC Tom Posted May 14, 2012 Share Posted May 14, 2012 Both Presidents can promise growth, but my contention is this won't happen via the private sector taking on more debt since we are record levels of private sector debt. So the only way to growth is via stimulus, something that will require higher govt tax revenues and/or higher government spending. ...which won't work either, since either the higher tax revenues will stifle private sector growth anyway, or the increased government spending will be with borrowed money, resulting not in growth but inflation. Europe's finding this out the hard way - you can't grow your way out of debt. You can only spend less than you bring in and pay it down. Link to comment Share on other sites More sharing options...
BiggieScooby Posted May 14, 2012 Author Share Posted May 14, 2012 ...which won't work either, since either the higher tax revenues will stifle private sector growth anyway, or the increased government spending will be with borrowed money, resulting not in growth but inflation. Europe's finding this out the hard way - you can't grow your way out of debt. You can only spend less than you bring in and pay it down. Europe's austerity measures have largely been focused on government sector debt. In France their Govt debt to GDP is 82% about 18% lower than the U.S.. In Greece we are talking about a society where 40% of the jobs were government. Ther debt to GDP is 165% https://www.cia.gov/library/publications/the-world-factbook/fields/2186.html. The problem with the prevailing school of economics is they often ignore private sector debt and solely focus on public sector debt. In fact Greece private sector debt to GDP is only 124% to GDP. So while Greece has huge government debts it's private sector is better off than the U.S. private sector. In Ireland the private sector debt to GDP is an astonishing 341% to GDP. http://www.rte.ie/news/2012/0214/debt-business.html Link to comment Share on other sites More sharing options...
3rdnlng Posted May 14, 2012 Share Posted May 14, 2012 Europe's austerity measures have largely been focused on government sector debt. In France their Govt debt to GDP is 82% about 18% lower than the U.S.. In Greece we are talking about a society where 40% of the jobs were government. Ther debt to GDP is 165% https://www.cia.gov/library/publications/the-world-factbook/fields/2186.html. The problem with the prevailing school of economics is they often ignore private sector debt and solely focus on public sector debt. In fact Greece private sector debt to GDP is only 124% to GDP. So while Greece has huge government debts it's private sector is better off than the U.S. private sector. In Ireland the private sector debt to GDP is an astonishing 341% to GDP. http://www.rte.ie/news/2012/0214/debt-business.html You stupid schit. Greece has very little private sector. You are an idiot that makes up crap. Enjoy your life. If you get what you deserve, you'll be eating out of garbage cans soon. Link to comment Share on other sites More sharing options...
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