Future Generation & $20 Trillion Dollar Deficit

Discussion in 'Economics' started by HeSaidSheSaid, Dec 2, 2017.

  1. Attaboy!

    comagnum likes this.
  2. piezoe


    Its is important to recognize that more or less continuous deficits are the normal condition for a large country with a fiat currency which is also the reserve currency. Deficits can be too large, too small, or just right. Human fallibility, an unknown future, and political pressure create error that makes it difficult, but not impossible, to get them just right. The current tax plan seems to be headed to too large, but deficits per se are not necessarily bad! Unfortunately there is much more to a macro economy then getting the deficit right. We are learning that how money is distributed in a economy makes big differences.

    We should not lose sight of reality. Federal finances are VERY different from personal finances. We have a built-in two percent inflation target... The U.S. can not go bankrupt, though it's currency can rapidly depreciate under mismanagement. Congress is the Horse, the Fed and Treasury are the Cart. There are ET folks who perennially get this relationship backwards.

    Politicians have an incentive to create nominal growth because through the "wealth effect" this helps them keep their jobs. Nominal growth can however be far different from real growth, the latter being constrained by factors outside the politicians' control. Nominal growth can go on forever so long as exponential math is available, real growth is constrained to a limit.
    Last edited: Dec 4, 2017
  3. England, Germany, US, Japan all filed for bankruptcy in the past just like financial matters and management at personal level or municipal level.
  4. piezoe


    Where (How?) on Earth did you come up with this crap. Alex Jones? Don't bother to answer. You should definitely not be allowed to vote.

    Moderators, can we lead off this year's "insane post of the year awards thread" with HeSaidSheSaid's post above?
  5. someone is crying like a baby (that's what baby does).

    I bet you were your teacher's favorite pet!
  6. piezoe


    If person makes a startling claim they should back it up with some kind of documentation. By the way, U.S. National Banks cannot go "Bankrupt" either. Not Since the Federal Reserve Act of 1913 as amended (The 1933 Banking Act produced a particulary important amendment and established the FOMC, after which the private Central Bank System with Federal oversight became a thoroughly government operation with Private Bank participation.) Although National Banks can't go bankrupt, they can become insolvent and undergo "resolution."
  7. I am really curious as well... When did England and the US, in particular, "file for bankruptcy"?
  8. enjoy!

    comagnum likes this.
  9. Rather sad to see someone so certain in their statements and yet unable to offer a shred of evidence.

    Oh well, isn't it ever thus...