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Report: U.S. deficit to hit $2.29 trillion (pg. 5)
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| ogvh5150 |
The topic is about the so called "deficit". The balance sheets in question are from the "Fed's" own financial statements. These statements do not reflect the deficit since the "Fed" is a private corporation which issues no stock to the general public.
My argument is this:
The Fed is private and issues fiat for the general public already issued as debt towards the national economy. You use federal reserve notes which are actually promissory notes (AKA I.O.U. or I owe you) as legal tender. The economy inflates (inflation) and deflates (deflation or depression) based on a few ledger entries and issues of paper money (fiat federal reserve note).
The fact is the Fed is both a government agency and a private corporate bank is also an issue unto itself. The Fed admits to being an agency within the government but denies it is private even though there are several court cases suggesting it is private. It operates within it's own autonomous authority to handle the economy since the Federal Reserve Act allowed it to exist.
For anyone to suggest that the Fed is not private makes the phrase "Foxes guarding the henhouse" untrue. |
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| occrider |
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The Fed deals in fiat. Even if we hold some kind of value it does not have any overall worth. Your rubber duckie could hold value to you but not to me unless I change my mind about your little rubber duckie. Two parties have to consent to give it value even though it has no intristic value.
quote:
History of Monetary Policy
A very large development in the 'technology' of money was the advent of 'fiat currency'. This uses the concept that money is worth whatever anyone thinks it is worth, so the government prints a limited supply of it and everyone accepts that that is money. This allows the money supply to grow and shrink as the government desires it to do, in accordance with the government's monetary policy.
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Yes … and?
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Then you turn it into some Bush/Kerry thing. The Fed knows no political parties.
What was the first thing, as President, did George W do?
He had an appointment with Mr. Greenspan.
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Well considering the economy is a big part about being president, one would hope that he had an appointment with the fed chairman.
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What is this supposed to mean?
They taught you the sky was orange.
Look at the BALANCE SHEET of the same pdf in question:
2003
Total assets:
209,640,184
Total liabilities (and cumulative results of operations):
209,640,184
This is about a 35% increase over 2002
2002
Total assets:
154,278,827
Total liabilities (and cumulative results of operations):
154,278,827
This is about a 15% decrease over 2001
2001
Total assets:
181,875,637
Total liabilities (and cumulative results of operations):
181,875,637
This is about a 94.5% increase over 2000
2000
Total assets:
93,530,693
Total liabilities (and fund balance):
93,530,693
Who's fooling who? Don't tell me about a balanced ledger. I see here a numbers game. I have seen financial statements from other corporations (gov't agencies as well) with DIFFERENT assets to liabilities numbers. I have also seen some with EQUAL assets to liabilities numbers. Don't let the numbers scare you. Remember it is a fiat system. Money created out of nothing but the stroke of a pen and a ledger entry.
Numbers listed are in the millions. So 93,530,693 is actually 93.5 Trillion Dollars.
"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." - Thomas Jefferson
Ironically as quoted from solomonstemple.com
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Sigh, well first of all you’re looking at the wrong thing if you want to gauge the increase in the money supply. If you want that information than simply look up the trend in the m3 money supply. What’s your point in listing the assets and liabilities of the fed? Stop changing your argument. You stated that the Fed was bankrupting our country by forcing the country to pay interest on the debt. I demonstrated that the Fed pays back all the interest to the treasury department AND any surplus of the Fed goes back to the treasury department. Now you can obfuscate the issue all you want with quotes and insinuations however it doesn’t add legitimacy to your argument ... actually I’m still trying to figure out what your argument is.
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The topic is about the so called "deficit". The balance sheets in question are from the "Fed's" own financial statements. These statements do not reflect the deficit since the "Fed" is a private corporation which issues no stock to the general public.
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Of course it doesn’t reflect the deficit. I merely referenced the financial statements to demonstrate my point that the Fed doesn’t collect interest on treasury bonds. As for the Fed issuing no stock to the general public why is that a surprise? Does the agriculture department issue stock to the general public? How about the labor department? I already explained what stock the Fed issues, who it issues it to, and why it is mandated to do so.
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My argument is this:
The Fed is private and issues fiat for the general public already issued as debt towards the national economy. You use federal reserve notes which are actually promissory notes (AKA I.O.U. or I owe you) as legal tender. The economy inflates (inflation) and deflates (deflation or depression) based on a few ledger entries and issues of paper money (fiat federal reserve note).
The fact is the Fed is both a government agency and a private corporate bank is also an issue unto itself. The Fed admits to being an agency within the government but denies it is private even though there are several court cases suggesting it is private. It operates within it's own autonomous authority to handle the economy since the Federal Reserve Act allowed it to exist.
For anyone to suggest that the Fed is not private makes the phrase "Foxes guarding the henhouse" untrue.
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The Fed is not a private institution. I’ve already demonstrated that the Fed is subject to congressional oversight, everything about the Fed can be changed by congress, it is subject to audits by the GAO, its profits are returned to the treasury department, and that court cases only reference the Fed as a private organization with respect to the federal tort claims act for that particular court case. In Brinks Inc. v. Board of Governors of the Federal Reserve System the courts ruled that the Fed was a federal instrumentality with respect to the Service Contract Act. The Fed is a central bank independent from the executive branch in the same sense of the matter that the supreme court is independent from the executive branch. Most of the central banks in the world are structured in a similar fashion. |
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| Trancer-X |
Here's a good article that came in my inbox today:
Fooled by the Numbers
by Antony P. Mueller
[Posted September 13, 2004]
Modern central banks pronounce economic and monetary stability as their target. But what they are after is not the real thing but a statistical chimera. Ludwig von Mises put it this way:
"The money equivalents as used in acting and in economic calculation are money prices, i.e. exchange ratios between money and other goods and services. The prices are not measured in money; they consist in money."
and
"All methods suggested for a measurement of the changes in the monetary unit's purchasing power are more or less unwittingly founded on the illusory image of an eternal and immutable being who determines by the application of an immutable standard the quantity of satisfaction which a unit of money conveys to him. It is a poor justification of this ill-thought idea that what is wanted is merely to measure changes in the purchasing power of money. The crux of the stability notion lies precisely in this concept of purchasing power." (p. 221)
"Price stability" is a misleading and an inherently contradictory concept. When such a construct as the price index becomes the guiding post for central banks, they will tend to produce and reinforce the very instabilities they proclaim to fight.
What is getting published as "the consumer price index" represents a statistical hodgepodge. It can be concocted in almost any way, and one can do this without violating common statistical rules. Hedonic calculation is just one example. But despite all the statistical tricks that are being invented and applied, the core issue remains unresolved: what actually is being measured by "purchasing power" and what is the value of money—other than subjective and individualistic—upon which the calculation could be based?
Along with the statistics related to the figures about the domestic and national product, the price index is one of the most unreliable, most deceiving and most abused statistical economic numbers. This is even more the case as the price index provides the basis for a series of other statistical indicators as it serves as a deflator and enters economic growth and productivity figures.
These macroeconomic numbers suffer from the illusion that the properties of an object—called "the economy"—could be objectively observed and measured. Whatever finesse will be applied to their calculation in order to make these statistics more accurate, it cannot do away with their basic invalidity that results from the impossibility of obtaining a fixed standard of measurement for value.
Attempts to measure the economy as if it were an object has its origin in government planning. Treating the economy as a whole becomes necessary for socialist central planners and under the conditions of total war. They take place under the presumption that some center with decision-making power has the proper knowledge about the means and ends of economic action. The results of these plans are well known; but while socialist-type total economic planning is off the screen even for many devout socialists, central monetary planning through the manipulation of money, credit and the exchange rate ranks still high on the public agenda. Indeed, central banking may be called the last refuge for those still under the spell of the pretense of knowledge.
Fixing their eyes on the so-called "price stability" or following the now fashionable inflation targeting schemes, central bankers are not just after a movable target but one that is more symbolic than real. This way, they neglect the inflation that takes place in the expansion of money and debt.
While central banks theoretically do have the instruments to control at least the monetary base, they are rarely willing to pay the price of a contraction and instead favor an illusory permanent expansion. They act like pushers selling cheap drugs to a gullible public with the financial sector as the intermediary. There is hardly any central bank free from this disease, which is inherent to an unanchored fractional reserve banking system.
Like with individual prices, the prices of groups of goods and services rise and fall. There are always inflationary and deflationary spots in an economy at the same time. When small aggregate price movements occur or when opposing forces are at work, the price index renders no valuable signal. If, however, strong tendencies in one or the other direction of the general price level are under way, and when this finally shows up in the price index, it is usually too late for the central banks to catch up.
Price indexes necessarily average out the extremes; they are unable to signal the more subtle price movements and they leave out relevant items such as asset prices. This way, it is not only the general public that is being deceived, the central banks themselves are falling victim to their calculations like the joke of the statistician who drowns while crossing the water that he had thought was easy to wade based on the arithmetic average of its depth.
Currently, for example, the depreciating value of the dollar is already visible in oil, real estate, precious metals, domestic services, health care, tuition or even when calculated against other fiat monies such as the Euro. In this perspective, there is inflation taking place and it has been taking place for quite some time at a remarkable pace. However, when counting in a considerable portion of computer storage capacity and imported gadgets, the picture changes and the perspective of a deflationary trend could be diagnosed by that yardstick.
The great cheat of the stabilizers consists in spreading the illusion that a stable or a moderately increasing price index would imply economic stability and would have no effect on the capital structure. Neither do monetary policy measures publicized under the heading of stabilization imply a constancy of purchasing power. Such measures rather mean that old distortions are covered up while new ones are being created.
Temporary success, like is also typical of deficit spending, makes central banking even more dangerous. Modern central banking is a hideous endeavor. The true dimension of the devastations caused by easy money policies become visible only in the longer run when inflation begins running wild and as such can only be stopped by a deflationary contraction.
Currently, central banks again fail to recognize or remain inactive in the face of the flood of liquidity. Swamping the globe with monetized debt drives the system inexorably on a path where the alternative of either accelerating price inflation or deflation becomes more pressing. When economic actors finally form a dominant expectation, a spiral of feedback processes begins and actions will be adapted accordingly. This is the point where the game slips out of the hands of the stabilizers and hyperinflation and depression loom.
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Antony Mueller is a professor of economics at the Universidade de Caxias do Sul (UCS) in Brazil and an adjunct scholar of the Ludwig von Mises Institute.
http://www.mises.org/fullstory.aspx?Id=1600 |
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| ogvh5150 |
| Thanks Trancer-X for understanding. |
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| occrider |
| quote: | Originally posted by Trancer-X
Here's a good article that came in my inbox today:
Fooled by the Numbers
by Antony P. Mueller
[Posted September 13, 2004]
Modern central banks pronounce economic and monetary stability as their target. But what they are after is not the real thing but a statistical chimera. Ludwig von Mises put it this way:
"The money equivalents as used in acting and in economic calculation are money prices, i.e. exchange ratios between money and other goods and services. The prices are not measured in money; they consist in money."
and
"All methods suggested for a measurement of the changes in the monetary unit's purchasing power are more or less unwittingly founded on the illusory image of an eternal and immutable being who determines by the application of an immutable standard the quantity of satisfaction which a unit of money conveys to him. It is a poor justification of this ill-thought idea that what is wanted is merely to measure changes in the purchasing power of money. The crux of the stability notion lies precisely in this concept of purchasing power." (p. 221)
"Price stability" is a misleading and an inherently contradictory concept. When such a construct as the price index becomes the guiding post for central banks, they will tend to produce and reinforce the very instabilities they proclaim to fight.
What is getting published as "the consumer price index" represents a statistical hodgepodge. It can be concocted in almost any way, and one can do this without violating common statistical rules. Hedonic calculation is just one example. But despite all the statistical tricks that are being invented and applied, the core issue remains unresolved: what actually is being measured by "purchasing power" and what is the value of money—other than subjective and individualistic—upon which the calculation could be based?
Along with the statistics related to the figures about the domestic and national product, the price index is one of the most unreliable, most deceiving and most abused statistical economic numbers. This is even more the case as the price index provides the basis for a series of other statistical indicators as it serves as a deflator and enters economic growth and productivity figures.
These macroeconomic numbers suffer from the illusion that the properties of an object—called "the economy"—could be objectively observed and measured. Whatever finesse will be applied to their calculation in order to make these statistics more accurate, it cannot do away with their basic invalidity that results from the impossibility of obtaining a fixed standard of measurement for value.
Attempts to measure the economy as if it were an object has its origin in government planning. Treating the economy as a whole becomes necessary for socialist central planners and under the conditions of total war. They take place under the presumption that some center with decision-making power has the proper knowledge about the means and ends of economic action. The results of these plans are well known; but while socialist-type total economic planning is off the screen even for many devout socialists, central monetary planning through the manipulation of money, credit and the exchange rate ranks still high on the public agenda. Indeed, central banking may be called the last refuge for those still under the spell of the pretense of knowledge.
Fixing their eyes on the so-called "price stability" or following the now fashionable inflation targeting schemes, central bankers are not just after a movable target but one that is more symbolic than real. This way, they neglect the inflation that takes place in the expansion of money and debt.
While central banks theoretically do have the instruments to control at least the monetary base, they are rarely willing to pay the price of a contraction and instead favor an illusory permanent expansion. They act like pushers selling cheap drugs to a gullible public with the financial sector as the intermediary. There is hardly any central bank free from this disease, which is inherent to an unanchored fractional reserve banking system.
Like with individual prices, the prices of groups of goods and services rise and fall. There are always inflationary and deflationary spots in an economy at the same time. When small aggregate price movements occur or when opposing forces are at work, the price index renders no valuable signal. If, however, strong tendencies in one or the other direction of the general price level are under way, and when this finally shows up in the price index, it is usually too late for the central banks to catch up.
Price indexes necessarily average out the extremes; they are unable to signal the more subtle price movements and they leave out relevant items such as asset prices. This way, it is not only the general public that is being deceived, the central banks themselves are falling victim to their calculations like the joke of the statistician who drowns while crossing the water that he had thought was easy to wade based on the arithmetic average of its depth.
Currently, for example, the depreciating value of the dollar is already visible in oil, real estate, precious metals, domestic services, health care, tuition or even when calculated against other fiat monies such as the Euro. In this perspective, there is inflation taking place and it has been taking place for quite some time at a remarkable pace. However, when counting in a considerable portion of computer storage capacity and imported gadgets, the picture changes and the perspective of a deflationary trend could be diagnosed by that yardstick.
The great cheat of the stabilizers consists in spreading the illusion that a stable or a moderately increasing price index would imply economic stability and would have no effect on the capital structure. Neither do monetary policy measures publicized under the heading of stabilization imply a constancy of purchasing power. Such measures rather mean that old distortions are covered up while new ones are being created.
Temporary success, like is also typical of deficit spending, makes central banking even more dangerous. Modern central banking is a hideous endeavor. The true dimension of the devastations caused by easy money policies become visible only in the longer run when inflation begins running wild and as such can only be stopped by a deflationary contraction.
Currently, central banks again fail to recognize or remain inactive in the face of the flood of liquidity. Swamping the globe with monetized debt drives the system inexorably on a path where the alternative of either accelerating price inflation or deflation becomes more pressing. When economic actors finally form a dominant expectation, a spiral of feedback processes begins and actions will be adapted accordingly. This is the point where the game slips out of the hands of the stabilizers and hyperinflation and depression loom.
________________________________
Antony Mueller is a professor of economics at the Universidade de Caxias do Sul (UCS) in Brazil and an adjunct scholar of the Ludwig von Mises Institute.
http://www.mises.org/fullstory.aspx?Id=1600 |
Cool, an interesting article but I have a few comments to make. First, the author is indeed correct that the consumer price index is subject to inherent statistical bias. However, his claim that the consumer price index is a “statistical hodgepodge” that can reflect anything statisticians want them to reflect, insinuating that inflation is consistently underestimated, seems to be without merit. If this was indeed the case, statisticians could immediately detect deviations and decreased correlations as the CPI became less indicative of inflation. This is particularly true since we can gauge, with relative accuracy, the historical levels of inflation, and compare the actual results with the results from the CPI. As a matter of fact, the Senate Finance Committee embarked upon an investigation to do exactly that and appointed a group of economists to examine the CPI. Their findings were that the CPI had actually overstated inflation by as much as 1.1%.
The reasons for such are from known biases that overexagerate inflation ... such as substitution bias:
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Substitution bias
One element of the bias is known as "substitution bias." As time passes some prices rise more than others. Since 1983, for example, shelter costs have risen more than 75% while apparel prices have increased only 30%. Households tend to buy less of the items with larger price increases and more of those with smaller price increases. The CPI, however, assumes that the market basket that households buy does not change. This means that items whose prices have risen most receive too much weight in the index (because households substitute away from them), while those whose prices have risen least are given too little weight (because households shift their spending toward them). In other words, the economies that households obtain by substituting cheaper items for more expensive ones are not captured by the index, which, as a result, shows more inflation than households actually suffer.
http://www.frbsf.org/econrsrch/wklyltr/el97-16.html
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Outlet Bias:
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Outlet bias
A second bias occurs through failure to take proper account of changes in the types of outlets favored by households in their purchasing. Households can reduce the impact of rising prices by switching toward cheaper outlets, though often these provide less customer service. The share of discount outlets has risen over the years, indicating that for some customers the lower prices are not offset by the associated reduction in service quality.
The CPI ignores price changes that occur when customers switch between outlets. This introduces an upward bias into the index, because some of the savings associated with the move toward cheaper outlets represent true price reductions that are not offset by the lower level of service. One estimate suggests that this bias raises the CPI by 0.1 percentage point a year (Lebow, Roberts and Stockton, 1994). This estimate is rough because it is difficult to disentangle differences in prices from differences in service quality.
http://www.frbsf.org/econrsrch/wklyltr/el97-16.html
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And Quality Change in Goods Bias:
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Quality change and new goods
The most difficult parts of price level measurement are how to handle changes in the quality of goods and services and how to deal with completely new items. Even if the quantities of goods and services that households purchased remained the same over time, a bias would remain if their quality changed. Clearly an auto purchased in 1997 is quite different from one purchased in 1957 and delivers more services in terms of comfort, safety, and longevity. Similarly, the cost of medical care has risen substantially in recent years, but medical advances have greatly improved its effectiveness. Hence, the true cost of care has risen less than the observed price because the quality of services purchased has risen.
A special kind of quality bias occurs when completely new products are introduced. Inevitably, new products are not introduced into the CPI until they are in widespread use. The microwave oven was not added until 1978 and the VCR until 1987, many years after they first became available. The ubiquitous cellular phone will not enter the index until 1998. The bias arises because prices frequently decline very rapidly in the few years after a new item enters the market. If the CPI market basket contains mostly mature items and few newly emerging ones, these early price declines will be missed, thus contributing to upward bias in the overall index.
http://www.frbsf.org/econrsrch/wklyltr/el97-16.html
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These are undisputed biases in the CPI that result in overestimations of inflation. It is for these reasons why the BLS has adjusted the CPI to more accurately depict true levels of inflation. In order to counter substitution bias, the CPI utilizes geometric mean indexes to replace the Laspeyres index. In order to counter quality bias, the BLS utilizes hedonistic regressions which the author of said article labels as a “statistical trick”. However, Hedonistic regressions have actually raised the index which counters Mueller’s argument.
http://research.aarp.org/econ/dd51_cpi.html
Mueller then goes on to state that the CPI is not an accurate gauge of inflation since it misses out on the “subtle price movements” and then he goes on by singling out rising costs with respect to oil, real estate, precious metals, domestic services, health care, tuition, etc. However, the point of the CPI is not to reflect “subtle” price differences in a few products. That would defeat the whole purpose of the index. The CPI is designed to capture the aggregate purchasing power of an individual’s money. Rising prices in singular products give no indication whatsoever of the true value of a money. Furthermore some of the products Mueller references, such as oil, are not necessarily functions of inflation alone but may be a reflection of numerous other underlying issues such as the devaluation of currency compared to other currencies, the two are very different. He then references real estate which can hardly be used as a stand-alone gauge of purchasing power since the real estate market is on the verge of a bubble (and in actuality the CPI was revised with rental equivalence adjustments as a flow-of-service to measure homeowners cost, further improving the accuracy of the CPI). Precious metals is an innaccurate indication of purchasing power alone since, once again, it’s a primary indicator of currency devaluation against other currencies considering most precious metals are imported(and how many consumers are in the precious metals market in their day to day activities?). Health care is an upwards bias of true inflation since it clearly falls under the quality bias category. But I’m starting to digress … all these things ARE captured in the CPI. The CPI tracks the prices of over 80,000 items a month. The only items the CPI does not include are investment items, such as stocks, bonds, real estate, and life insurance since those items relate to savings and not to day-to-day consumption expenses. The reason why gains in individual areas that Mueller outlines does not spike the overall CPI gauge is because the CPI tracks the aggregate purchasing power of money with respect to ALL items that consumers purchase.
A criticism one could levy at central banks with respects to utilizing monetary policy that rely upon inflation indexes is that there is a recognition lag of at least one month and then a policy lag as central banks implement new monetary policiies in response to inflation indexes. But there's not really a way to avoid such a problem ... |
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| Trancer-X |
"Hedonistic regressions," haha. :haha: That's awesome, and I hope you don't mind if I use that!
Good . Thanks occ!
You should become a professor like the dude that wrote that article! You could then position yourself to be some sort of a logistical minded Henry Kissinger protégé or something. :D |
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| occrider |
| quote: | Originally posted by Trancer-X
"Hedonistic regressions," haha. :haha: That's awesome, and I hope you don't mind if I use that!
Good . Thanks occ!
You should become a professor like the dude that wrote that article! You could then position yourself to be some sort of a logistical minded Henry Kissinger protégé or something. :D |
LoL hahaha oops ... now that's a freudian slip ever I seen one :p |
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| Trancer-X |
"Give me control of a nation's money and I care not who makes it's laws."
- Mayer Amschel Rothschild
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks...will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
- Thomas Jefferson
"I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a moneyed aristocracy that has set the Government at defiance. The issuing power should be taken from the banks and restored to the people to whom it properly belongs."
- Thomas Jefferson
"The division of the United States into federations of equal force was decided long before the Civil War by the high financial powers of Europe. These bankers were afraid that the United States, if they remained in one block and as one nation, would attain economic and financial independence, which would upset their financial domination over the world. The voice of the Rothschilds prevailed… Therefore they sent their emissaries into the field to exploit the question of slavery and to open an abyss between the two sections of the Union."
- German Chancellor Otto von Bismarck
"This Federal Reserve Act establishes the most gigantic trust on earth. When the President (Wilson) signs this bill the invisible government of the Monetary Power will be legalized."
- Hon. Charles A. Lindbergh, Sr
To get a good idea of what the Fed is really about you have to explore the history behind all of it. You have to understand why William Jennings Bryan and others in the Progressive movement were so against it, why Paul Warburg was so intent on meeting with the chairman of the Senate Finance Committee (and then the National Monetary Commission), Senator Aldrich, etc.
Whatever or whoever controls the purse strings of a country ultimately controls a lot more than just it's finances.
"Some even believe we (the Rockefeller family) are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure – one world, if you will. If that's the charge, I stand guilty, and I am proud of it."
- David Rockefeller (from his book Memoirs, pg. 405)
David Rockefeller was also the founder of:
"The Trilateral Commission is intended to be the vehicle for multinational consolidation of the commercial and banking interests by seizing control of the political government of the United States. The Trilateral Commission represents a skillful, coordinated effort to seize control and consolidate the four centers of power--Political, Monetary, Intellectual, and Ecclesiastical."
- U.S. Senator Barry Goldwater (from his book No Apologies, 1964)
"The drive of the Rockefellers and their allies is to create a one-world government combining super capitalism and Communism under the same tent, all under their control.... Do I mean conspiracy? Yes I do. I am convinced there is such a plot, international in scope, generations old in planning, and incredibly evil in intent."
- Congressman Larry P. McDonald |
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| occrider |
| Hehe I'd still like to see an economy function without a central bank. To the best of my knowledge there is only one country officially without one and that's Panama. Unofficially their central bank is the US Fed since their currency is pegged to the dollar. |
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| Krypton |
| When the economy runs on debt, the debt can go on forever. The US simply doesn't need to export more than it imports. Unlimited credit means we can buy whatever we want, and as much of it as we want. Just as long as we can continue to pay the interest, it will never end until the economic system is totally reformed. |
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| Krypton |
| quote: | Originally posted by Trancer-X
[size=1] |
I dunno about thomas jefferson's statements being applied to modern times. Corporations back then were very different from today. Specifically, the East India Companys of 1600's Europe. Theese entities were basically monopolies of the markets they were given by their crown soveriegnty. I think what Thomas Jefferson meant in today's terms was that total capitalism was a bad thing because corporations that become monopolies are detrimental to the balances of power. |
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| occrider |
| quote: | Originally posted by Krypton
When the economy runs on debt, the debt can go on forever. The US simply doesn't need to export more than it imports. Unlimited credit means we can buy whatever we want, and as much of it as we want. Just as long as we can continue to pay the interest, it will never end until the economic system is totally reformed. |
No actually it can't go on forever. It can only go on so long as there is demand for the debt. If demand diminishes than interest rates need to rise on treasuries to encourage more demand. Therefore you're paying out more interest. |
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