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Brokedownclimber
Trad climber
Douglas, WY
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Feb 13, 2011 - 09:25pm PT
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Wow!
So what we should all hope for is a totally valueless dollar---then there is no national debt? Hah!
My calculated value for the dollar extrapolated back to 1912, before the Federal Reserve System, is a current USD has $0.03 in relative purchasing power to the 1912 USD. The Fed was authorized in 1913, along with the Federal Income Tax. Some coincidence, eh?
The last year we were on a Gold Standard was 1932. In 1933 FDR confiscated all the privately held gold coins and gold certificates. Shortly thereafter, the treasury revalued gold from $20/troy ounce to $35/troy ounce. In other words, POOF! The U.S. Treasury suddenly had a 75% increase in "backing" for the money supply. Simply billions created out of thin air. Then the Democrats started spending the thin air...and the rest is history.
The last President under whom the national debt was ZERO was Martin van Buren, who was Andrew Jackson's V.P.
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High Fructose Corn Spirit
Gym climber
Full Silos of Iowa
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Topic Author's Reply - Feb 14, 2011 - 11:54am PT
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So what we should all hope for is a totally valueless dollar---then there is no national debt? Hah!
I hear you, it was just a thought experiment (gedankenexperiment), trying to weigh $10 trillion against the background of the total wealth of the country, wondering just how huge the effects would be.
Food for thought: the lesser of two evils...
EDIT
Certainly the value of the dollar would drop, certainly some heads would roll. But that's going to happen eventually sooner or later anyway.
Fattrad's link:
The U.S. Treasury Department says what it pays to service the national debt is poised to triple amid record budget deficits.
Net interest expense will triple to an all-time high of $554 billion in 2015 from $185 billion in 2010, according to the Obama administration’s adjusted 2011 budget.
“It’s a slow train wreck coming and we all know it’s going to happen,” said Bret Barker...
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GDavis
Social climber
SOL CAL
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Feb 14, 2011 - 12:11pm PT
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HOW WILL THIS AFFECT THE MOUNTAINZ
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dirtbag
climber
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Feb 14, 2011 - 12:35pm PT
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Recessions usually drive up the deficits, and this recession has been a doozy.
Work on unemployment, and tax rolls will go up, entitlement spending will go down, and the deficit won't be as bad.
But some politicians would rather focus on the debt instead.
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John Moosie
climber
Beautiful California
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Feb 14, 2011 - 02:19pm PT
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So if you were given a million dollars a day, and not worrying about spending it or interest or anything like that, how many years would it take you to accumulate 14 trillion dollars?
There are a million millions in a trillion. Thus given one million dollars a day, it would take you 14 million days to accumulate 14 trillion dollars. If you didn't spend anything and made no interest.
14 million days = 38,356.1644 years.
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franky
Trad climber
Ford Pickup Truck, North America
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Feb 14, 2011 - 04:45pm PT
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you guys all talk about this with the assumption that it is an awful thing, yet none of you understand the consequences of national debt, and what it really means.
you make the silly assumption that the US debt is similar to your own, which isn't necessarily the case.
Anyways, I ask again, why should i care? Given my student loan debt, and the fact that I own very little assets, a decent amount of inflation isn't that bad for me!
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August West
Trad climber
Where the wind blows strange
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Feb 14, 2011 - 04:54pm PT
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http://www.slate.com/id/1937/
So someone at my office sent me the above link describing a babby sitting co-op that was issuing its own money (script) for, you guessed it, baby sitting. It is an interesting real world example of the problems you can have when you don't have enough money in circulation (countries that stayed on the gold standard during the great depression generally did worse) and why a little bit of inflation can be a good thing.
I thought it was an interesting read.
Here is a snip:
Well, it turned out that there was a small technical problem. Think about the coupon holdings of a typical couple. During periods when it had few occasions to go out, a couple would probably try to build up a reserve--then run that reserve down when the occasions arose. There would be an averaging out of these demands. One couple would be going out when another was staying at home. But since many couples would be holding reserves of coupons at any given time, the co-op needed to have a fairly large amount of scrip in circulation.
Now what happened in the Sweeneys' co-op was that, for complicated reasons involving the collection and use of dues (paid in scrip), the number of coupons in circulation became quite low. As a result, most couples were anxious to add to their reserves by baby-sitting, reluctant to run them down by going out. But one couple's decision to go out was another's chance to baby-sit; so it became difficult to earn coupons. Knowing this, couples became even more reluctant to use their reserves except on special occasions, reducing baby-sitting opportunities still further.
In short, the co-op had fallen into a recession.
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froodish
Social climber
Portland, Oregon
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Feb 14, 2011 - 05:07pm PT
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@August,
Clearly, the problem was that their currency wasn't backed by a bunch of ingots in a vault. Instead of issuing more babysitting coupons, they should have returned to the gold standard. ;-)
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Brokedownclimber
Trad climber
Douglas, WY
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Feb 14, 2011 - 05:18pm PT
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Gotta' give Crowly credit on this one...
We should nationalize the Federal Reserve...
Fine. How?
The so-called "Federal" Reserve is an International banking Cartel, comprised of some of the world's largest banking organizations. Rothschild, Warburg, Lazard Freres. How our money became controlled by these thieves is a story unto itself...
Eustace Mullins self-published a book titled: "Secrets of the Federal Reserve." I defy anyone to find a copy in any bookstore. Mr. Mullins was a disciple of reknowned poet, Ezra Pound in the 1940's, and was a distinguished non-PC researcher on many topics. But his most famous quote regarding the Federal Reserve System:
It's NOT "Federal," there are NO reserves, and as a system it's a criminal conspiricy.
At least Crowley "gets" the fact that it is a PRIVATE, INTERNATIONAL BANKING MONOPOLY.
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TGT
Social climber
So Cal
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Feb 14, 2011 - 06:36pm PT
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Economy is not an egotistical thing, nor is it a stand alone thing. It's intertwined, both locally and globally
And that is why Sweden is the second largest exporter of armaments per capita globally.
They make some damn fine ones too.
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Chaz
Trad climber
greater Boss Angeles area
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Feb 14, 2011 - 07:08pm PT
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Why do you want to raise taxes on yourself, Dr F?
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Chaz
Trad climber
greater Boss Angeles area
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Feb 14, 2011 - 07:22pm PT
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At least we've got the "non-profit" part covered.
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Mighty Hiker
climber
Vancouver, B.C.
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Feb 14, 2011 - 07:23pm PT
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Perhaps because Dr. F is mature enough to take a tax for his country, and sometimes put the good of the country ahead of his own self interest.
Or, as Oliver Wendell Holmes more or less put it, taxes buy civilization.
Look up what total taxes in the US actually are, going back a century. Including local and state governments.
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Brokedownclimber
Trad climber
Douglas, WY
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Feb 14, 2011 - 08:15pm PT
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I'm already paying my share of taxes. And that's as close to zero as my CPA can make them. I paid out my wazoo before I retired, and prolly bought a smart bomb a year. Like near a quarter mil a year.
Now that the dollar has declined in purchasing power even further I may have to go back to work.
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Knave
Trad climber
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Feb 14, 2011 - 08:20pm PT
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I have 18 climbing ropes, 5 pairs of climbing shoes and a spool of webbing vacuum packed in the basement. Should last me!
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Chief
climber
The NW edge of The Hudson Bay
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Feb 15, 2011 - 01:19am PT
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Just wondering to what degree the US economic woes can be linked to defense spending and Canada's to tax breaks and subsidies for resource extraction, oil and gas specifically?
Not making any claims, just wondering.
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bmacd
Social climber
100% Canadian
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Feb 15, 2011 - 04:27am PT
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Every moment of deepest despair in 2008-09 saw the USD rise, not fall. One advantage of the USD is that there are enough of them to meet demand when the crisis warrants it. The faith in the USD is warrantied because its backed by democratic/republic with a very strong military. Unless China can match those attributes and float the yuan they have not a hope in hell of anyone believing they offer an alternative reserve currency.
Fiat currencies work well when managed responsibly and I would not want to live in a society that doesn't have one. Nor would I want elected governments to be in charge of money creation, so we are left with independent central banks and the problems they present, which in my opinion are more than countered by the advantages an independent monetary authority provides.
As hoillopoli states gradual long term devaluation of the USD relative to other currencies is the unwritten game plan which is why every evil hedge fund took major positions in gold two years ago.
Everyone in the world has a stake in the viability of the faith based USD. That faith is inspired by the political, military, industrial, complex.
like it or not ....
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High Fructose Corn Spirit
Gym climber
Full Silos of Iowa
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Topic Author's Reply - Feb 15, 2011 - 10:46am PT
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"...gradual long term devaluation of the USD relative to other currencies is the unwritten game plan..."
Now this seems esp relevant, somebody in the know care to elaborate...
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bmacd
Social climber
100% Canadian
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Feb 15, 2011 - 12:23pm PT
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It's tragedy if those great machines made by CAT are held together by Chinese bolts of dubious quality. A lower relative dollar will bring back manufacturing to the USA, create jobs, increase exports. It doesn't take ESP to see that the mechanics of quantitative easing is part psychological financial warfare. My step-father went to the Davos conference one year and ran a large gold mining company for a long time. We used to talk a lot about these things.
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