DEBT? What debt? How can the US ever theoretically have a debt problem?

Discussion in 'Economics' started by MathAndLogic, Aug 1, 2010.

  1. First, there is an idea call trust, i.e., credit.

    Second, the Fed can create credit out of thin air. Just call this Federal Reserve Note the Bernanke Vapor (or Bernanke Gas).

    Third, the world is addicted to this Vapor and thinks it smells good. Wars have been fought over it; people work their asses off the obtain it; they even risk their lives for it. They trust the Vapor.

    Now the debt with interest.

    The total US sovereign and public debt is in the amount of X (that is all the debt to China, Japan, and all the medicare, social security debt now and in the future), and the total interest on X is Y. Now Bernanke goes to a Fed computer and types enough 0's following a 1 so that this number is >= (X + Y); he then wires this amount of Vapor to China, Japan, and medicare and social security. Debt and interest paid, and all Americans live happily ever after.

    Here is the catch: China is worried about drug overdose on Vapor and the Vapor quality, and demanded higher interest. Bernanke then follows the same procedure but types more 0's. Problem solved by the same algorithm. However, this creates a problem for the little working child slave of the IRS, because after he pays higher interest and taxes to his owner, he has nothing left to himself. Bernanke saw the problem, and he types more 0's for social welfare. Problem solved.

    This proves that any countries that manages its own currency (in contrast to Greece) cannot possibly have credit or debt problems.

    I am angry. Please enlighten me.
  2. your an idiot
  3. Jym


  4. You can't print debt away. That explodes commodity and consumer prices. It also destroys the currency, purchasing power and living standards. You're talking third world solutions that have predictably failed a million times.

    The problem is the United States - like other European sovereigns - are boxed in. In most cases, the debt is so large, interest rates can never be raised. On the flip side, if the US balances the budget, the economy implodes. This "recovery" is 100% deficit financed. The leading indicator here is the US consumer. Once their debt-load is paid down and they get some legs, the economy will recover, juice up a bit, then inflation goes parabolic. How long will it take the US consumer to recover? I don't know. Key metrics are household debt-to-equity ratios. When they retreat to historical baselines - where debt repayment shifted to accumulation - then, it's on.
  5. Dickhead! Do you know how to boil a frog? Look the joke up. That is what will happen. Our frog will be boiled.
  6. I think we see beads of sweat on their brow already.

    (Do frogs have a brow? Do they sweat? Maybe I'm all wet.)
  7. Oh! I never suspected before now that you were a fucking furriner. Go bash some other country. We do a good enough job bashing ourselves that we don't need you to help us. We elected Obamao. Nuff sed. My ape-ologies if I am mistooken.
  8. No, you're right, we (well, not ME) elected him. He spun lie after LIE... we fell for it.. so for our gullibility and greed, we deserve to have our country and the lives of our children/grandchildren destroyed . We get what we deserve in an election, right?
  9. Please ass-sept my perrofoundest apologies. I had no idea you were a kindread spirut. A true Amureekan. Whatever that is. We are such a mongrelized race, as the K of KK would say. But clearly you have no life beecauz you are dial-logging wif moi. No soaps on on Sunday, I gas. As the old Chink joke goes. China has too much popuration because they have too many erections. Amareek's cure is coming. Be pre-paired to lack it.
  10. pspr


    Good job of shooting that idea to pieces, guys. The only easy answer is to tell our Gov to STOP THE SPENDING! At least the expanding entitlements.
    #10     Aug 1, 2010