US Budget for Dummies....

And that last joke of a candidate tried to bribe his way into the WH by promising more spending on special interests than they could handle.

Is there some special genetic defect such that leftists can't add ?:-} ...Jim Thompson

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Yes, but as you said, inflation has been low for 4 decades, and the price of gold has dropped 12% over the last 18 months or so. So, the question remains when interest rates will rise? All I want to know is when to sell my low yielding bonds?

-Bill

dget:

ting? And that last joke of a candidate tried to bribe his way into the WH by promising more spending on special interests than they could handle.

Fred's pretty good with numbers. Lots of people just don't understand the context of that infamous quote. If the private economy (the citizens) is growing lots faster than the gov't, revenues grow even faster and quickly cancel any short-term deficit.

Obama's increased spending to 24.4% of GDP, while only collecting

As a fraction of GDP, Obama's spending roughly 25% more than Clinton, that's the problem. It's dragging us under.

James Arthur

dget:

d.

Where did KRW say inflation has been low for 4 decades? Try charting the price of silver, or some basic commodity.

No one knows exactly when to sell your low-yielding bonds. The internet bubble kept running and running, coughed, then crashed. Ditto the housing bubble, and the current multi-facted Obama bubble (mortgages, banking, and deficit-spending / monetary).

Shorter term maturities and TIPS might make some sense, anyhow.

This graph puts things in a historical perspective:-

Best regards, Spehro Pefhany

As soon as the economy can draw a breath of air. So far, Obama has managed to snuff out any breath it's attempted. As long as he succeeds, the economy will play possum and inflation will remain low. After, watch out!

It has, for everything needed to live. For decades, productivity held the cost of consumables low. In the last half decade the economy and unemployment have turned the trick.

And that last joke of a candidate tried to bribe his way into the WH by promising more spending on special interests than they could handle.

But it wasn't, as it turns out. Deficits are supposed to be *reduced* when the economy is growing.

No argument there. The system wasn't designed for a 2% economy. That is the primary problem here.

The problem is that it may not be the spending that's dragging us under. It's likely something else. it's probably error on the part of the Fed, best I can tell.

You'd think we would know for a certainty what the problem is, since it's important, but it looks at least to me like we don't know very well.

If we're in an economy that's a 2% economy from now on, then we have a bigger problem than the deficit. I don't believe that we're in a naturally 2% economy. But you know what - if everybody

I think somebody goofed up. I think the emphasis on inflation as a control variable for the money supply doesn't work very well, and I think that for control theory reasons.

Are there D-only controllers? No. You get cumulative error and need P and/or I components to .... offset for them. Using only inflation (and a sloppy estimate of inflation at that) is analogous to having a D only controller with an effload of noise.

The difference is that a government can print money, and if that is done for too long and there is a complete collapse then it can nationalize private property.

But that is without doubt what some people want.

They spend too much time playing golf.

Please eplain, how do they print money, then pay interest on it ?

Ok, say a recent interview on this that might shine some light on where the libs minds are.

The government has the ability to print money. If they liked, they could just go out tomorrow and print enough money (actually, it is all electronic, so lets change that) they could just credit all their debtors with payments that would pay off their debt. And what would happen? Would inflation immediately result? Not necessarily. You see, you have to look at who OWNS all that debt.

The large amount is held BY THE US GOVERNMENT! (that is the SS trust fund that gets bandied about...)

The majority is held by US Banks! When they get excess cash, they just loan it to uncle sam. They have to do something with it. Wait, I said cash. Sorry, I meant 'When they have excess credits on their computers.' No real money ever changes hands at this level.

So, how about the Chinese and Eurobanks and others? Well, they had excess dollars on their computers too, so to do something with it (they couldn't just buy US PRODUCTS not could they!) They loaned it to the US government.

So, really, why doesn't the Fed just declare all debts paid, and we can all quit worrying? It is all about CONTROL! They use that debt and the ability to tax, not because they need the money (they can create that by the magic of computers!) No, they need taxes and debt as a way to control and influence the populace and these other nations.

the real problems is that they are cowards. They are afraid to try and 'balance' the budget, because that would draw out too many funds from the economy, but they are also afraid of just decaring the whole charade over because then they loose all that nice control of people that they have!

So, "Print more money" is not a true statement, right ??

Charley, that's pretty radical. Actually, sometimes I wonder who is in charge of our money: the government of the Federal Reserve that is supposedly independent of the government.

Oops, a typo there. The "of" in the middle of the 2nd line was supposed to be "or", making it "government or ..."

No, and that government can, and does, is part of the problem.

No, and that governments manipulate 'the economy' is part of the problem.

Better than government because if members of the family unit take on a second job they are actually producing something in exchange for the 'increased revenues' received whereas government simply consumes what others have produced.

No, but it's closer than you apparently think. The purpose is to put the 'big numbers' in a comprehendible perspective but many of the 'complications' you think make it 'not that simple' are, in fact, 'the problem'.

Watching the debt uniformly increase regardless of whether the economy is 'good' or 'bad'. Worse than that, the amount 'spoken of', I.E. the so called "national debt," is only that owned by 'the public' and is only a fraction of the outstanding debt obligations. For example, not a single red cent of the monies borrowed from the Social Security Trust Fund over the past 50 years is counted as 'public debt' despite it being owed.

And yet you still didn't get it.

Look up depression era Germany. They tried it.

Lovely example of 'fiscal delusion'. A private sector analogy would be a catastrophic balloon loan and it 'looks okay' until the balloon.

Your example is what people are referring to when they speak of 'raiding the social security trust fund'. In fact, it wasn't 'raided', per see, but used as an 'accounting gimmick. The Fed borrowed from the SS fund, issued government securities to it, and then pretends no money was borrowed so it doesn't show as 'debt'.

The 'logic' was "well, the government owes it to itself, so that's not 'public debt'," but it is owed to the future recipients and now that those people who have paid into it for 50 years are retiring all that "we don't call it a debt" is coming due. So instead of 'free money' (you can thank Johnson for this scam), like it was in the 60's, 70s,

This debacle, btw, is in addition to 'the debt' being talked about in the news since that 'debt' wasn't, and isn't, 'counted' as 'debt' despite it being debt.

And why would they? Interest.

You mean 'something' like, as but one example, investing in business expansion? Where, instead of money being flushed down the toilet, it might spur economic growth (heaven forbid).

I see down below you've created a 'real money' myth. What makes you think paper bills are 'real money' but 'computer credits', as you call them, are not?

If you take 'real money' and deposit in your bank does that mean you no longer have any 'real money' because the only thing you've got now is a bank statement? Printed by a 'computer' showing a 'computer credit' to you equal to the 'real money' you put in but no longer have. Or would it be 'real money' if the bank statement was written by hand, since you seem to think there's something 'mysterious' about computers?

Same 'something' as your previous banks example. People put money where it will 'make a profit' (oh that word).

And when governments 'pay' to borrow money, to piss down a toilet, they take it out of the business sector where it would otherwise be used to produce something of value.

Because that would be the last time anyone would loan it a red cent.

That's what spending (and regulation) is about.

Nonsense.

'Money' has no intrinsic value but 'represents' the 'value' of goods people are willing to exchange. 'Real money' is simply 'book keeping'. I.E. before money if you wanted a cow you exchanged 3 pigs (or whatever the 'going rate' was [free market]) for it. But that's a problem if you have shoes to exchange and no pigs. You have to then find someone who has some pigs and wants shoes, so you can exchange, and then take the pigs over to get the cow. It would be a lot more convenient if people would agree to some kind of 'exchange medium'. Then a cow might 'cost' 3 credits, a pig 1 credit, and a pair of shoes

Let's see, we're going to need some way to keep track of these 'credits' so how about we print some paper 'notes', each one representing 'one credit'. Now, when we want a cow we give the guy 3 'paper credits' and he's willing to take them because he knows he can take them to a pig store and get 1 pig for a 'paper credit', buy two pairs of shoes with another 'paper credit', and save the third 'for a rainy day'.

We call these 'paper credits' "money" but it doesn't matter what they're made of, nor how we account for the 'credits' (even if only a 'bank statement' or 'a computer'), as long as everyone agrees to use them as a medium of exchange. But, remember, the 'value' is based on the cow, pigs, and shoes.

Now, given the nature of human beings we clearly have one huge gaping problem with our 'medium of exchange' plan since, sooner or later, some wisenheimer is going to get the bright idea of simply printing his own 'credits' rather than going through all the 'work' of creating value by raising his own cows, pigs, or making shoes. THAT is one of the legitimate roles of government: the fair and equitable enforcement of 'agreements', including contracts and our 'medium of exchange'. (this is also why you don't mind putting your 'real money' in the bank because if they don't give you back what's 'recorded' when you ask for it their ass goes to jail).

It's not legal to steal 'paper credits' any more than it's legal to steal the cow, pig, or shoes because the paper credit is simply an agreed to stand in for them. If you raise a cow, though, then you've 'earned' that value and are entitled to exchange it for 3 credits, the going rate of exchange, but it's not 'legal' to print your own credits either, instead of creating the value they are based on, because that's equivalent to stealing. I.E. you'd be trying to obtain something of value for nothing, because there was no 'value' created by you simply printing credits.

The PROBLEM is when government, which is supposed to be enforcing the agreement, becomes the criminal.

Being massively in debt does not 'help' you 'control' anyone.

Exactly the opposite. Racking up massive debt takes money OUT of the economy.

I hope you know how to raise cows and pigs because when 'the whole charade is over' that's the only thing the shoe maker is going to take in exchange.

Comrade Flipper, it's truly concerning to see such backward counter- revolutionary thought-crime as one of the first postings in this first day of this first year of moving FORWARD.

Let us presume to instill some korrect thinking while dial your local FEMA camp, to refer you for some much-needed re-edukation in class- struggle.

It's entirely krass and regressive to suggest that our omnipotent ruling gods, by printing their own credits, are effectively making claim to our pigs, our goats, our cows, and our sheep. Viewed korrectly, when our thoughtful intrepid leaders in Washington post more imaginary digits in their computers, why this is the very act of plenty that provides for us--pigs, cows, goats and sheep all spring into existence, fully-formed, and ready for consumption. This is how masses are produced for the masses, this is how we all become progressively richer. Soon the country will be awash in such bounty as never seen before.

And, if it doesn't work at once, this is due to reactionary elements thwarting the immaculate plan of The People Who Know Better. We must purge these elements, persevere, then double and redouble our spending until we've spent our way to prosperity; our coffers shall overflow with riches.

Henceforth may your beet ration be reduced by half, and vodka by two- thirds until you see the error of your miskalculations.