Gov't Run Ponzi Scheme

[jIM_Ohio]

Its True- the US government can issue bonds to cover its debt.

Who holds the debt should be of less interest than the amount of debt we have (do we care if our mortgage is held by GMAC or citigroup, or do we care we have a mortgage of $300,000)?

Its that total number you should be focusing on.

The system works because the government gets the principal amount to spend, but only has to pay the interest on the bond until it matures.

To make money when the bond matures, the government can issue new bonds.

[wincrasher]

Here's some radical thinking:

Whatever they are doing seems to be working.

People have been screaming that the sky is falling for generations.

Companies are making record profits. Inflation is low. Interest rates are low.
The employment situation is starting to turn.

Frankly if they are printing money in the basement all night, I really couldn't care.

Would you rather they raised all your taxes? Maybe if we hadn't had the Bush tax cuts we wouldn't have a deficit right now and the national debt would be about 5 trillion less than it is now?

The TARP worked too didn't it? Guess why we got any of our money back? The sole reason? The pay caps put in by the Dems as a revision!

[jIM_Ohio]

Here's some radical thinking:

Whatever they are doing seems to be working.

People have been screaming that the sky is falling for generations.

Companies are making record profits. Inflation is low. Interest rates are low.
The employment situation is starting to turn.

Frankly if they are printing money in the basement all night, I really couldn't care.

Would you rather they raised all your taxes? Maybe if we hadn't had the Bush tax cuts we wouldn't have a deficit right now and the national debt would be about 5 trillion less than it is now?

The TARP worked too didn't it? Guess why we got any of our money back? The sole reason? The pay caps put in by the Dems as a revision!

You lost credit once you posted that TARP worked.

I see no evidence that giving money to banks created jobs, which is the point of a stimulus.

Blame Bush for cutting taxes, but last I checked, the deficit was growing since Eisenhower was in office, if not before (FDR???).

[wincrasher]

The TARP worked because the financial system didn't totally collapse. You realize how many jobs would have been lost then?? Sure, it was a bumpy ride. Primarily I say it worked because we are actually getting paid back and even making alittle money on it. You think we would have seen a dime of it if we didn't put a cap on the exec pay? Whe they first passed the TARP - Nov '08? - they were talking about 30 years repayment!

As far as the deficit goes - remember the surplus days of 1998-2000? We were on the right track then!

[banditfist]

The Treasury issues t-bills. They get money back in return. The Treasury ala the taxpayer must pay the t-bill plus some interest.
What changed in the last year or two is that the Federal Reserve (VERY loosely related to the federal government) began a program of quantitative easing (QE). The Fed can increase/decrease the money supply with the stroke of a key on the keyboard. The Fed has been buying the t-bills and giving the government cash to pay its debts. This has been increasing the money supply. But, what has not happened is inflation which would be the normal effect of QE. The reason QE was really started was to keep interest rates close to the Fed target rate (the Fed does NOT set interest rates). The market sets interest rates. The Fed has become part of that market. Inflation has not occurred because the titanic deflation of asset classes.

It is hard to get your mind around the fact that the Fed can generated money out of thin air and then we have to pay the interest to use it. The only saving grace is that profits of the Fed are given back to the Treasury on an annual basis. But, since no one can audit the Fed....what it the truth?

[jIM_Ohio]

The TARP worked because the financial system didn't totally collapse. You realize how many jobs would have been lost then?? Sure, it was a bumpy ride. Primarily I say it worked because we are actually getting paid back and even making alittle money on it. You think we would have seen a dime of it if we didn't put a cap on the exec pay? Whe they first passed the TARP - Nov '08? - they were talking about 30 years repayment!

As far as the deficit goes - remember the surplus days of 1998-2000? We were on the right track then!

The government had you believe the financial system would have collapsed. I am not convinced it would have. Thing might have gotten worse faster, but instead TARP slowed down things getting worse, but it clearly has not made the problem better (as in correct the problem).

It only enabled people by extending unemployment and other handouts, which goes in direct contrast to what we know works (keep employment high and tax revenues follow without needing to raise taxes).

The current stance of the fed (from what I read) is that no entity is "too big to fail", which is direct contrast to what we were told by the politicians which passed TARP TWICE. That is my interpretation of the fed meeting minutes anyways...