georgia still has not, and rural healthcare in the state is a disaster
News Article: Treasury secretary says US to hit debt limit on Jan. 19
- Thread starter Bamaro
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I understand the posts completely. You all made yourselves perfectly clear. The Democrats should use old people as pawns. Don't do what you accuse the other side of doing. The debt ceiling thing comes up every few years and is full of sound and fury signifying nothing at the end of the day. They always raise the thing. Maybe one side gets some concessions or something they want in the deal, but it gets raised. I agree that is the Republicans want to change SS introduce a bill. We do have a long term issue with insolvency that needs to be addressed, but those on the program and those close to it must be protected. They have paid into this system. Their checks were hit month after month, and now they should get what is theirs because they paid for it.
Janet Yellen:
“If the congress doesn’t raise the debt ceiling the US will default on treasuries”
Isn’t that the definition of a Ponzi scheme? Essentially saying that if the treasury doesn’t borrow money from new investors they won’t be able to pay holders of current debt?
“If the congress doesn’t raise the debt ceiling the US will default on treasuries”
Isn’t that the definition of a Ponzi scheme? Essentially saying that if the treasury doesn’t borrow money from new investors they won’t be able to pay holders of current debt?
It's a little more nuanced than that. I found this article helpful.
Ponzi Scheme vs Social Security - Difference and Comparison | Diffen
What's the difference between Ponzi Scheme and Social Security? Critics of Social Security have called it a Ponzi scheme. They argue that the program is functioning only because current workers pay into it, thus giving the government the money to pay the benefits for current retirees. They...
I'm not talking about SS specifically, I'm talking about the treasury / selling debt in general.
If you make the definition that broad, it includes all insurance companies...
Maybe I'm not following but do insurance companies require new users (growth) in order to stay afloat or do the revenues from the existing client base not generally cover the coverage payments?
Not arguing, just questioning. I do know that comparing a government's budget to any private business or household is doomed to failure, but it seems that the US Treasury is just borrowing money to pay old interest so we can continue to borrow more, but not paying anything towards the principle.
It's not an exact analogy. Insurance companies compute the amounts they have to pay out, using actuaries. All but the largest have to then turn around and reinsure with someone like Lloyds to cover unexpected "runs." However, insurance companies which are growing do take on some of the aspects of a Ponzi. They have to reinsure less, the more they grow...
I know you like to dismiss it but I do think it's important. I know I'm not alone.
And I feel that way regardless as to which clowns are running the show.
i do think excessive spending (and also diminishing revenues via idiotic tax cuts) are a serious issue that need to be addressed.
i don’t think social security is a ponzi scheme
*like*
FTR, I didn't refer to SS as a Ponzi scheme - I was talking specifically about Yellen / US Treasury.
i see the posts above now, im on a phone and missed them initially and only saw earles response
I wonder if the US government thinks of its debt in a different way than we do...
For instance real estate developers use leverage to build assets. Retiring debt takes cashflow from building assets. The payoff of debt only comes when the assets are sold. In the meantime, is there enough cashflow to service interest which allows them to control/build the assets. We as consumers don't live this way, can't live this way. We have to pay off debts or sell assets because we die.
In this sense, the US asset is its economy, GDP, our consumptive power. We have to be a creditor nation so other nations can be investor nations. Their economic output is greater than their consumptive power, eg. Germany. Worldwide finance has to balance. Debits = Credits.
The Germanys of the world don't want to be paid off per se. Their economy doesn't work unless they are exporting stuff. Our agriculture industry is so efficient it can feed the world and largely does. If it didn't need to the industry would collapse. In this arena, we are an investor nation whereas the Chinas and Japans are creditor nations. We don't want them to stop buying our food.
With this, US assets will never be sold or liquidated unless it loses its sovereignty. So infinite assets funded by infinite debt is just fiat, nothing. The default risk is not in the ever-growing debt but the interest paid on the debt. The interest is what the investor nations expect to get. If they don't get that, then your left with... nothing.
The US Treasury and the Fed likely know what amount of interest the economy and tax system can support. Congress likely just mucks it up to degree.
Our biggest risk from this perspective is unaffordable interest expense, stupid House machinations flirting with default in paying interest, and declining GDP. Declining GDP is the biggest risk to us because of our aging demographics. We will need to import GDP from across the globe to keep our asset, GDP, from declining in value.
The goal likely is not to pay the debt and never will be. We just want to keep the music playing. When the music stops, it's nothing. We don't pay interest and we are through. If we do default, it better be done at home and not abroad.
For instance real estate developers use leverage to build assets. Retiring debt takes cashflow from building assets. The payoff of debt only comes when the assets are sold. In the meantime, is there enough cashflow to service interest which allows them to control/build the assets. We as consumers don't live this way, can't live this way. We have to pay off debts or sell assets because we die.
In this sense, the US asset is its economy, GDP, our consumptive power. We have to be a creditor nation so other nations can be investor nations. Their economic output is greater than their consumptive power, eg. Germany. Worldwide finance has to balance. Debits = Credits.
The Germanys of the world don't want to be paid off per se. Their economy doesn't work unless they are exporting stuff. Our agriculture industry is so efficient it can feed the world and largely does. If it didn't need to the industry would collapse. In this arena, we are an investor nation whereas the Chinas and Japans are creditor nations. We don't want them to stop buying our food.
With this, US assets will never be sold or liquidated unless it loses its sovereignty. So infinite assets funded by infinite debt is just fiat, nothing. The default risk is not in the ever-growing debt but the interest paid on the debt. The interest is what the investor nations expect to get. If they don't get that, then your left with... nothing.
The US Treasury and the Fed likely know what amount of interest the economy and tax system can support. Congress likely just mucks it up to degree.
Our biggest risk from this perspective is unaffordable interest expense, stupid House machinations flirting with default in paying interest, and declining GDP. Declining GDP is the biggest risk to us because of our aging demographics. We will need to import GDP from across the globe to keep our asset, GDP, from declining in value.
The goal likely is not to pay the debt and never will be. We just want to keep the music playing. When the music stops, it's nothing. We don't pay interest and we are through. If we do default, it better be done at home and not abroad.
They just see it as a way to buy voters without having to pay the costs. Just kick the can down the road. Somebody else will be left to clean up your mess. Its VERY easy to spend the money, very difficult to ask voters to pay for it.
Senate GOP to House GOP: NOPE
www.politico.com
Senate GOP to McCarthy: Debt fight is all yours
A handful of Republican senators helped twice raise the nation's borrowing ceiling in 2021. They're less willing to step into the breach this time.
www.politico.com
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