Horn2RunAgain
2,500+ Posts
Two words. Financial Planner
One of the best things my wife and I did ... also..If you have any market sense at all, late 2017 to mid 2019 was a grand time. CFPs comes in handy then as well
National Debt
- Thread starter BrntOrngStmpeDe
- Start date
Two words. Financial Planner
One of the best things my wife and I did ... also..If you have any market sense at all, late 2017 to mid 2019 was a grand time. CFPs comes in handy then as well
Monahorns
10,000+ Posts
The assumption here is the Keynesian deceit, that government printing money and handing it out builds wealth. It doesn't it actually consumes capital which is future wealth. Hayek won a Nobel prize in 1974 explaining why and how this happens.
Now it can boost the GDP number, but that isn't wealth. The government can print $50 Trillion/year and hand it out and the GDP will continue to go up even as less and less or no more things are produced for people.
The best thing the government can do during a downturn is spend less. It allows people and businesses to make their own decisions about where to invest money or to save it and in what form. That allows capital to go to the most valuable areas of the economy as decided by millions of consumers.
Conservatives need to get away from believing half of Keynesianism and rejecting the other half. Need to get rid of all of that guys ideas. He literally believed that people should be paid to dig holes and fill them back up in order to boost the economy. Let markets work.
I'm not a Keynesian, and this has nothing to do with Keynesianism. Government spending doesn't build wealth, and when it tries to spend money to stimulate the economy, it usually just creates market distortions and inefficiencies.
However, when there's a major economic crisis, large numbers of people are out of work and not paying taxes. That means revenue is falling. On the flip side, demand for government services usually increases temporarily. That means spending for things like unemployment benefits and food stamps is usually going up - not in an effort to stimulate the economy but for people to meet their basic needs. The combination of factors will often lead to budget deficits.
Obviously during a major war (not piddly skirmishes like Afghanistan or Iraq but real wars that require a serious economic commitment to win like WWII), defense spending goes to massive levels. When military spending alone goes to 10 - 35 percent of GDP, it's hard to expect taxes to cover everything. It's not unreasonable to expect deficits.
Temporary deficit spending is valid practice but should only be used to get through a short term unique situation (no more than 5 years). but perpetual deficit spending whether for entitlements or military or any of the other programs is a problem. Prolonged deficit spending causes govts to do ridiculous things to cook the books. It provides perverse incentives to manipulate programs in gratuitous accounting schemes just to polish the look of the budget versus acknowledging its full weight.
the current argument and approach to this 3.5T bill is an example. They are looking at only accounting for 3-5 yrs of the programs vs. the ten years original. That's how they are going to "reduce the cost" of the bill. ....by only acknowledging the immediate cost and amortizing that over 10 years. That is b.s. accounting magic and the kind of stuff you get from govt when it isn't dealing with real numbers.
the current argument and approach to this 3.5T bill is an example. They are looking at only accounting for 3-5 yrs of the programs vs. the ten years original. That's how they are going to "reduce the cost" of the bill. ....by only acknowledging the immediate cost and amortizing that over 10 years. That is b.s. accounting magic and the kind of stuff you get from govt when it isn't dealing with real numbers.
AC
2,500+ Posts
Eventually, we will get off of the fiat currency standard! Maybe 22’ or 23’. Central Banks want us on the CBDC standard. Then they can cut off access to your digital currency cause your social credit score is too low or your ESG score is too low. Like Australia, sound good?
That’s where we’re headed.
#Bitcoin
That’s where we’re headed.
#Bitcoin
Monahorns
10,000+ Posts
But you ignore the fact that the economic crises today are caused by government spending and money manipulation. By your own words you accept at least some of what Keynes was selling. Government isn't the solution to economic problems. Market restructuring is, and it needs to be left alone in order to do it correctly and quickly.
Monahorns
10,000+ Posts
I'm not ignoring that, and I'm not accepting any basis for Keynesianism. I'm making a political (not economic) assumption that we will always have some sort of government-sponsored safety net for people who are out of work through no fault of their own.
OUBubba
5,000+ Posts
And kids. I was listening to a podcast last night. A young girl and her 6 siblings (who's parents were foster kids) were put into the system when their family lost their apartment. The state spent about $400,000 on their fostering expenses. Spending about 1/10th of that would have kept them housed and out of the system.
Monahorns
10,000+ Posts
That's fine but it shouldn't be run like a credit card because that just burdens people more later and people other than get the benefit.
Of course I prefer a private safety net, but a government program needs to operate the same way regardless. A private safety net would have to take in money and manage it like an insurance company. The money paid out wouldn't be borrowed it would be paid for by the people getting the service plus any investment gains were made.
This way supports wealth creation over the long haul too.
The fact is we have given the government the power to take care of emergencies and we have let them print money to do so. That's 2 mistakes. Let's at lease cut one of those mistakes off the list.
If I could be the benevolent dictator, I'd dump all government welfare programs and rely on private interests for social welfare. It could be some form of private insurance, charities, churches, or likely some combination of the three. But again, this is about how to best deal with the political realities of the last 90 years and the foreseeable future, and that's going to be at least some form of a government system. Food stamps, unemployment benefits, and programs of that nature are not going away in our lifetimes or our great-great grandkids' lifetimes.
If we're going to have government welfare of some kind, you can say there shouldn't be a credit card, which I presume to mean you wouldn't borrow money to finance it under any circumstance. That sounds great, but it's going to leave tax hikes during an economic downturn as the likely solution, and that's only going to make matters worse.
We're not in trouble because we've borrowed money during recessions, wars, and for real infrastructure (like interstate highways). We're in trouble, because we borrow money for day-in-day-out expenditures even during normal economic times. It's like guy who's fat. He's not fat because he ate 7000 calories on Thanksgiving and Christmas. He's fat because he ate 4000 calories on the other 363 days of the year.
AC
2,500+ Posts
This is good news! Explain how spending 1/10th of that would have worked. I know many folks that want to hear your solution.
Monahorns
10,000+ Posts
There myriad options about how to do it that wouldn't involve increasing taxes during a downturn. I don't see why we are locked into such a rigid set of artificial laws about a welfare system, government or not.
But the point is the government likes to print money because it gives them freedom to do whatever they think they can get away with. We the people need to get past accepting the government's assumptions.
Bad analogy. You don't buy Thanksgiving dinner using a credit card that is already maxed out. You enjoy Thanksgiving from the wealth of your harvest, so to speak.
All the borrowing contributes though. Of course the US would be in a better position it didn't borrow all the time but borrowed only some of the time. But even borrowing for war or welfare creates problems. Much of the in-fighting in the government in the early Republic was around debt and the taxes or money inflation the government used to buy them off. It's truly anti-poor type behavior that Americans accept as good today. We need to shift our viewpoint on what is sound economics.
And we're brainless on economics, and it's because economics is one of these areas of study that has been largely captured by partisan politics.
What are some of these options?
I agree.
If that's your focus, then you missed the point of the analogy. It has nothing to do with how the dinner is bought.
Debt has its downsides and problems with governments and with individuals. However, I can't say that it's never appropriate. Debt to finance everyday expenditures is obviously foolish, immoral, and dangerous. However, without the ability to take on debt, we probably wouldn't exist as a country. We likely would have been conquered by someone, and our infrastructure would be crap. Of course, 90 percent of our debt isn't for the very few things that are actually justifiable.
Monahorns
10,000+ Posts
Cutting spend so that funds can be created to pay out later. You could do a phase in/phase out to go from borrowing to saving.
The point was that Thanksgiving doesn't make a person fat. Daily habits do. My point is that I am even more concerned about how the food is paid for not just whether I am eating too much on Thanksgiving.
Debt has its purposes. The best purpose is to fund something you can't any other which creates more wealth in the future. Government doesn't create anything. Now if someone attacks the US it is better to go into debt to pay for a defensive war than to be taken over. But it is better to have financial planning within the government that at least provides during a short term crisis.
Ding! Ding! Ding! Winner!
I'm combining these, because they're related. In an ideal world, I'd rather the government save than borrow. However, realistically that isn't going to happen. When the government runs a surplus, we get mad that the government is hoarding money. Democrats largely say to spend it. Republicans largely use it to argue that taxes are too high.
And is saving always fair? Take infrastructure, for example. Suppose that instead of borrowing to build the interstate highway system we had started saving money for it in the 1920s and when we had to enough to build it, started doing so in the 1950s. Millions of taxpayers would have paid taxes to finance something they'd never use because they'd be dead by the time it was built. By financing it with debt, it was at least generally paid for by people who would use it.
It's fine to make that point, but it's unrelated and doesn't make my analogy "bad."
And often, an ounce of prevention is worth a pound of cure except that most of the US entitlement system is designed so the "ounce of prevention" is designed to be perpetually available as you stay destitute. The incentives are perverted. I believe in social safety nets but they should have a per instance, and a lifetime limit.
If someone needs welfare fine, bump it up a little but make it known that it is OVER at two years and you won't be able to tap it again for another decade. And maybe give a second and third bite at the apple but ultimately there is a lifetime limit of 6 years no matter the situation.
Hundreds of billions were spent by the US in Afghanistan. Here are 10 of the starkest examples of 'waste, fraud and abuse' - CNN
While I'm sure CNN is playing this up for max effect, the underlying issue is accurate. While we don't start wars to generate money, there are lots of folks that line up at the trough when the opportunity presents itself. And the military/industrial complex is a real thing and they don't magically find that what the military always needs is more of their stuff. I received 5 complete new sets of camo from 2003-2016. We changed patterns 4 times. In Iraq, my unit built a $5MM Network Ops Center only to walk away from it 18 months later. I drove an UpArmored HMMV on the base in Tikrit and I never left the base. Could have done that with a $10K toyota. Everybody was driving HMMV's. I don't know if this constitutes fraud, but it most certainly constitutes waste and abuse. I think part of our problem is that when we change commanders every two years, we tend to change strategy, and then we abandon what the previous guy did and kick off a whole new round of bound-to-fail projects and by the time those fail, the decision maker has moved on, and at the very least he can now claim that it failed because it received inadequate support by the succeeding commander. The unaccountable budget of wartime gives them way too much leeway. but at the same time it is hard to deny troops on the ground our best support.
I swear the entire defense industry owes that soldier that asked Rumsfeld about deficient body armor a great big sloppy kiss. After that question in 2004, they had carte blanche to spend spend spend for a while.
While I'm sure CNN is playing this up for max effect, the underlying issue is accurate. While we don't start wars to generate money, there are lots of folks that line up at the trough when the opportunity presents itself. And the military/industrial complex is a real thing and they don't magically find that what the military always needs is more of their stuff. I received 5 complete new sets of camo from 2003-2016. We changed patterns 4 times. In Iraq, my unit built a $5MM Network Ops Center only to walk away from it 18 months later. I drove an UpArmored HMMV on the base in Tikrit and I never left the base. Could have done that with a $10K toyota. Everybody was driving HMMV's. I don't know if this constitutes fraud, but it most certainly constitutes waste and abuse. I think part of our problem is that when we change commanders every two years, we tend to change strategy, and then we abandon what the previous guy did and kick off a whole new round of bound-to-fail projects and by the time those fail, the decision maker has moved on, and at the very least he can now claim that it failed because it received inadequate support by the succeeding commander. The unaccountable budget of wartime gives them way too much leeway. but at the same time it is hard to deny troops on the ground our best support.
I swear the entire defense industry owes that soldier that asked Rumsfeld about deficient body armor a great big sloppy kiss. After that question in 2004, they had carte blanche to spend spend spend for a while.
I'm sure any day now CNN will be covering the trillions wasted on the failed War on Poverty.
Monahorns
10,000+ Posts
Yes. That is exactly what would be said. Nailed it. More evidence that government isn't the place to do this kind of thing.
That is a good point. That has to be weighed. The counter balance is that you don't want future generations paying for what your generation received like we have now. The children are paying for the nice things their parents and grandparents got and on top of that prices stifle wealth accumulation.
There needs to be some middle ground and discipline. Local governments are typically more accountable than the Federal, so things like roads need to be pushed down to the local level, maybe state. For an interstate system, the money could still come from local or state taxes, then the design could be done by one firm linking it all together.
AC
2,500+ Posts
Any debt based monetary system enslaves citizens with debt and high taxes. Add the fact that central banks worldwide are private. 12-13 families worldwide own all the central banks. Why get debt and pay them back plus interest? Own appreciating assets and invest only in currency that is scarce and outside of this system! Your wealth will double every year, if not triple, if you do this! All I want is to contribute to Hornfans in a positive way. Hard assets and hard money is the only way!
dumbass Trump has called for GOP to oust Mitch from leadership but honestly I think this has worked out well for the GOP. Schumer looked like a jackass trying to rebuke the GOP at the very moment that they were going along with raising the debt ceiling. We all know that this won't resonate strongly with core Dem's but it will likely resonate with independents and mod Dem's. Given Biden's weak support and weak support for Dem's in general, I think this worked pretty well for GOP and in my opinion is one more shrewd political move by MM.
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