The government is not a business or a household.

[girl gone mad]

All of the money you have in your pocket, in your bank account, in your paycheck, etc. came into existence when the government spent it.

The government has to spend money into existence before it can tax that money or issue bonds.

Our government deficit represents a private sector surplus; this surplus is money that households and businesses have available to spend. If we shrink the deficit, households and businesses will have to borrow more from banks when they want to increase their spending capacity. Does that sound like a good plan right now?

If you want to understand how fiat monetary systems actually work, rather than how people imagine they work, this is a good place to start:

http://pragcap.com/resources/understanding-modern-monetary-system

[napoleon_in_rags]

1. I heard banks loan it into existence, and the Fed is not government.

but I will read your link and see what it has to say.

[girl gone mad]

2. Yes, banks lend money into existence, too..

which is why reducing the government deficit will increase dependence on bank borrowing.

Too much private debt is what got us into a crisis state in the first place. We need to get more money into the economy to help reduce our private debt levels while maintaining GDP. That will mean expanding the deficit.

[napoleon_in_rags]

7. Smart, smart, smart.

That link you sent it so densely packed with golden information I'm still not done. I'm going back in!

[canoeist52]

3. Must have hit a nerve- The Bankers that Be are unrecin' ya.

[annabanana]

4. hmmmm yup. . . .n/t

[girl gone mad]

8. Seems that way.

People just need to ask themselves who stands to benefit if the government removes money from the economy.

There's only one sector that would gain anything, and it's the same one that just got $16 Trillion in bailouts.

Life is funny sometimes.

[benld74]

5. Thank You very much - I have been saying the same thing for YEARS

These individuals comparing government to household spending or even a business cannot see the larger picture and NEVER will. Everyone thinks THEY are correct and will flame anyone not agreeing with them

[Davis_X_Machina]

9. Try to explain the difference..

..in a space the size of a bumper sticker. Once you've got that down, repeat it for thirty years. And then people will buy it. But not before.

It's been a generation since "The GOP is the party of fiscal probity" was actually true. It's never been the case that "The Democrats are soft on defense". But both of them are still taken as gospel.

[benld74]

10. How bout 'Grand Obstructionist Party'?

[girl gone mad]

12. What's sad is that..

we have a pretty decent monetary system in place. It's not perfect, but it gives us a lot of leverage to get people back to work and invest in technology and infrastructure. Instead, our leadership insists on imposing artificial constraints and then selling us the idea that the way to 'win the future' is to cut the economy down to a size where the bottom 99.999% is competing for scraps.

[Cool Logic]

6. Oh, I get it...While some people believe: On the sixth day, God created Adam and Eve...

Others believe: On the fifth day, God created the fedgov.

[Uncle Joe]

11. Kicked and recommended.

Thanks for the thread, girl gone mad.

[Rex]

13. Why even bother to care about the debt? Do away with the

debt ceiling all together and admit we are addicted to money like a crackhead is addicted to crack. Just spend and spend and spend until a foreign entity tries to call our market out. Why even bother with worry over a balance or who has the money...they print the money so it is just a matter of how much they want to devalue the dollar in exchange for a higher debt owed to foreign entities. The supplier is the dealer is the addict.

And as for the payer, who cares about them? Fuck them, we take what we want and sell the rest!


Seriously thou...nice link! :hi:

[napoleon_in_rags]

14. I gotta post one more thanks to you and say a few things.

Quick and dirty:

1) The concept of science is founded on the idea of discovering truths which can be verified by individual and numerous observers, which is to say it discovers truths which exist independently of whether they are observed or not.

2) 'Occult Science' is the term which describes the study of truths who's validity is dependent on observers of said truths. Its true that light passes through both slits as a wave, until somebody actually tries to observe it happening, then it collapses to a particle. The same happens a lot in complex human systems, where behaviors are dictated by perceptions, like markets.

3) Our current economic system isn't based on science, its based on occult science: which is to say, the fact that the money is created out of thin air works only if it isn't known. When it looks like the economy is headed south, our leaders will SAY its headed north, with the hopes of stimulating the economy, and their method is correct: If people have faith, credit becomes available, people are willing to spend and not horde, and things will go north. But if people are treated like deterministic entities, then a scientific report of things trending south is valid too.

4) The information revolution, the Internet, has poked a huge hole in the faith in the leaders that lets economic occult science work: People can easily see information contrary to the leaders, and their mysterious qualities have largely been removed. Therefore the occult manipulations don't really work that well anymore. This is a fact created by the advancement of technology, nothing else.

5) The value of our currency, which is to say the united states long record of a low inflationary rate, is based on financial sector intelligence. If you go in for a loan with a business that will create $100,000 in economic wealth with 99% certainty, its no problem for them to create $100,000 in new dollars to fund it, because the currency is tied to anticipated economic value created: so long as dollars are tied to real units of economic production, inflation does not occur.

6) The occult system of finance was always a hack, and that's why its falling. Just as there is a good scientific model of quantum phenomenon which takes observations and their effects into account, so must there be a good 'open source' scientific model of economy which takes observations into account, and creates prosperity without having to maintain secrecy regarding its own nature. The same information technology which has crashed the old model has the power to create the basis for this new model, and the creation of this new model should be the fundamental task for all the geniuses of this time. We - Can - Do - It!

Fin.

[girl gone mad]

15. I spent almost a decade in college and graduate school..

then post-grad studying relativity, quantum electrodynamics and cosmology.

Once you get into economics from that type of background, you realize how incredibly unscientific neoclassical economics is. That's why modern monetary theory is so appealing to me. The theory comes directly from the models. It makes accurate and reliable predictions and doesn't leave a lot of loose ends that have to be explained away with questionable math.

Thanks for your comment.

[napoleon_in_rags]

17. That's why you are so needed.

And that's why you and your kind alone may be so well equipped to handle the nature of this beast: The state of the system is a function of what the players in the system observe, and the predictions you make about the future of the system are observed by the players, changing the state of the system. This is a tricky thing to get your hands around within the context of public policy, but I believe it can be done.

[WinkyDink]

16. IKR?! This is THE most inane "analogy"!!