Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 01-08-2013, 01:09 PM   #21
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by pb4uski View Post
I don't so much mind government debt to fund infrastructure (roads, bridges, etc) that will last a long time and provide long term benefits to citizens and I understand the benefit of temporary deficit spending during time of financial distress - but what the government has been doing is issuing debt to fund current operations and IMO that is specifically the type of spending that a government should not be issuing debt to fund.
I tend to think so as well. It's somewhat analogous, IMO, to family finance "rules" which suggest that debt should only be used for long-term appreciating assets (such as a home in the general case, or possibly for investments) and not for depreciating items (cars, "stuff" bought with revolving credit card debt).
__________________

__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-08-2013, 01:27 PM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,403
I just saw on the Web a proposal for the US Treasury to mint a one-trillion-dollar coin, then to give it to the Federal Reserve to pay the gummint's debt.

Is it tongue-in-cheek, or are they serious? Of course we could mint 2 more coins, and to pay the Chinese and the Japanese the same way too.

To borrow from Emeril Lagasse's often saying about spicing up his dishes, this $1,000,000,000,000 coin surely kicks the idea of fiat money up countless notches! Up into the stratosphere!

No, out of this galaxy! See: Debt Limit Showdown Spurs Debate On Trillion-Dollar Coin - Bloomberg
__________________

__________________
NW-Bound is offline   Reply With Quote
Old 01-08-2013, 01:51 PM   #23
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,445
Quote:
Originally Posted by NW-Bound View Post
I just saw on the Web a proposal for the US Treasury to mint a one-trillion-dollar coin, then to give it to the Federal Reserve to pay the gummint's debt.

Is it tongue-in-cheek, or are they serious? Of course we could mint 2 more coins, and to pay the Chinese and the Japanese the same way too.

To borrow from Emeril Lagasse's often saying about spicing up his dishes, this $1,000,000,000,000 coin surely kicks the idea of fiat money up countless notches! Up into the stratosphere!

No, out of this galaxy! See: Debt Limit Showdown Spurs Debate On Trillion-Dollar Coin - Bloomberg
A former Director of the US Mint says it is legitimate. Mint The Coin: Former Mint Director Philip Diehl Explains Why The Trillion Dollar Coin Law Would Work - Business Insider
__________________
MichaelB is offline   Reply With Quote
Old 01-08-2013, 01:52 PM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,403
I have not heard what the Chinese and Japanese say about this though. Should we be nice and send an extra coin to Greece?
__________________
NW-Bound is offline   Reply With Quote
Old 01-08-2013, 01:57 PM   #25
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,445
Quote:
Originally Posted by NW-Bound View Post
I have not heard what the Chinese and Japanese say about this though. Should we be nice and send an extra coin to Greece?
Actually, we all have heard from both, as they continue to be the two largest purchasers of our Treasury debt. If risk is reflected in the interest rates as economic theory suggests, they both think the US debt is the safest around.
__________________
MichaelB is offline   Reply With Quote
Old 01-08-2013, 01:59 PM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,403
Quote:
Originally Posted by MichaelB View Post
Actually, we all have heard from both, as they continue to be the two largest purchasers of our Treasury debt. If risk is reflected in the interest rates as economic theory suggests, they both think the US debt is the safest around...
... until the $1,000,000,000,000 coin idea was proposed.
__________________
NW-Bound is offline   Reply With Quote
Old 01-08-2013, 01:59 PM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,615
Quote:
Originally Posted by NW-Bound View Post
I just saw on the Web a proposal for the US Treasury to mint a one-trillion-dollar coin, then to give it to the Federal Reserve to pay the gummint's debt.
It's not proposed as a serious solution to the underlying problem. It's a proposed wriggle through a loophole to sidestep the debt ceiling debate we are about to have.

The sole virtue of the idea (IMO) is that it will clearly and tangibly demonstrate the cynicism and "easy-way-out" thinking that pervades the present process.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is offline   Reply With Quote
Old 01-08-2013, 02:02 PM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,403
And why bother to waste a perfectly good 1-oz of platinum to make this coin? What's wrong with good ole paper?



__________________
NW-Bound is offline   Reply With Quote
Old 01-08-2013, 02:22 PM   #29
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,445
Quote:
Originally Posted by NW-Bound View Post
... until the $1,000,000,000,000 coin idea was proposed.
Just the opposite. The debt ceiling debate is not about borrowing money, just paying what we already spent, and I imagine the Chinese, Japanese and everyone else are anxious to get paid.
__________________
MichaelB is offline   Reply With Quote
Old 01-08-2013, 02:27 PM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,271
Quote:
Originally Posted by ERD50 View Post
I'll be curious what you think of that book. I recently read another by Krugman (well, skimmed it after ~ 1/3 of the way through), and my impression of Krugman was:
I am an award winning economist.
I have certain 'beliefs'.
When I talk economics, I make connections to my 'beliefs', and infer cause/effect.
I expect you to accept my inference of cause/effect w/o any attempt at proof, because I am an award winning economist.
At least that was my take on it, curious what others may think.

-ERD50

I haven't read any of his books, but that is the impression that I get when I hear him talk on the Sunday political shows....
__________________
Texas Proud is offline   Reply With Quote
Old 01-08-2013, 02:31 PM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,271
Quote:
Originally Posted by MichaelB View Post
Actually, we all have heard from both, as they continue to be the two largest purchasers of our Treasury debt. If risk is reflected in the interest rates as economic theory suggests, they both think the US debt is the safest around.

I would have to look it up, but I read an article that said China was not one of the two largest purchasers of our debt... they are #1 holder of debt, but they have been a net 'seller' for the past year or so... IOW, the amount of US debt they hold has been going down...

Japan on the other hand has been buying more and will soon be #1 holder of US debt....
__________________
Texas Proud is offline   Reply With Quote
Old 01-08-2013, 02:34 PM   #32
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,271
Quote:
Originally Posted by NW-Bound View Post
And why bother to waste a perfectly good 1-oz of platinum to make this coin? What's wrong with good ole paper?




You have to read the article.... something about the law on printing money... and coining in silver, gold etc.... except platinum....


The problem with this debate, as mentioned by the Mint is they need congress to pass a law on how it will look.... so, it is just a waste of time and effort as they will not pass this if they would not increase the debt ceiling.... just sayin.....
__________________
Texas Proud is offline   Reply With Quote
Old 01-08-2013, 02:47 PM   #33
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,445
Quote:
Originally Posted by Texas Proud View Post
I would have to look it up, but I read an article that said China was not one of the two largest purchasers of our debt... they are #1 holder of debt, but they have been a net 'seller' for the past year or so... IOW, the amount of US debt they hold has been going down...

Japan on the other hand has been buying more and will soon be #1 holder of US debt....
Could be with China. A lot has to do with how much they are exporting to the US.
__________________
MichaelB is offline   Reply With Quote
Old 01-08-2013, 02:53 PM   #34
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,403
Quote:
Originally Posted by MichaelB View Post
... I imagine the Chinese, Japanese and everyone else are anxious to get paid.
Yes, but I think they want to be paid with "real money", not the $1-trillion dollar coin. So, we pay internal debt with "funny money", while paying outsiders with "real money"?

But as I thought about my sentence above, I realize that the true question is what "real money" is. When it comes to fiat money, how does one distinguish real money vs. funny money? No black and white and it's all a lot of gray, isn't it?

Quote:
Originally Posted by Texas Proud View Post
You have to read the article.... something about the law on printing money... and coining in silver, gold etc.... except platinum....

The problem with this debate, as mentioned by the Mint is they need congress to pass a law on how it will look.... so, it is just a waste of time and effort as they will not pass this if they would not increase the debt ceiling.... just sayin.....
It seems to be a tongue-in-cheek debate, but just that someone brings up the possibility bothered the hell out of me. It's because very strange and unimaginable things happened in past history. Well unimaginable until it really happened of course.
__________________
NW-Bound is offline   Reply With Quote
Old 01-08-2013, 02:57 PM   #35
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,445
Quote:
Originally Posted by NW-Bound View Post
Yes, but I think they want to be paid with "real money", not the $1-trillion dollar coin. So, we pay internal debt with "funny money", while paying outsiders with "real money"?

But as I thought about my sentence above, I realize that the true question is what "real money" is. When it comes to fiat money, how does one distinguish real money vs. funny money? No black and white and it's all a lot of gray, isn't it?
We're talking about real money. In fact, it has already been spent.
__________________
MichaelB is offline   Reply With Quote
Old 01-08-2013, 02:57 PM   #36
Thinks s/he gets paid by the post
target2019's Avatar
 
Join Date: Dec 2008
Posts: 3,705
I just started Essays on Political Economy by Bastiat, Frédéric on Kindle for Android! http://www.amazon.com/kindleforandroid/

Thought I'd mention this is a free publication.

Birth of Plenty was a major milestone for me. Definitely worth a read.
__________________
target2019 is offline   Reply With Quote
Old 01-08-2013, 02:58 PM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,403
Quote:
Originally Posted by MichaelB View Post
We're talking about real money. In fact, it has already been spent.
Yes. Spent real money, and repay that debt with funny money. Many countries have done that, so this would not be the first time.
__________________
NW-Bound is offline   Reply With Quote
Old 01-08-2013, 02:59 PM   #38
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,445
Quote:
Originally Posted by NW-Bound View Post
Yes. Spent real money, and repay that debt with funny money. Many countries have done that, so this would not be the first time.
I'm sorry, but I don't get your point about funny money.
__________________
MichaelB is offline   Reply With Quote
Old 01-08-2013, 03:04 PM   #39
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,403
Well, a piece of paper with a string of 0's after a 1 like what Zimbabwe printed looks like "funny money" to me. It is not backed by any current asset, nor any production capacity that appears feasible in the future by that country.

If wealth could be so easily created...
__________________
NW-Bound is offline   Reply With Quote
Old 01-08-2013, 03:09 PM   #40
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,445
Quote:
Originally Posted by NW-Bound View Post
Well, a piece of paper with a string of 0's after a 1 like what Zimbabwe printed looks like "funny money" to me. It is not backed by any current asset, nor any production capacity that appears feasible in the future by that country.

If wealth could be so easily created...
Fortunately, our monetary system is not like that, nor is there any indication it will be.
__________________

__________________
MichaelB is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 04:23 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.