tag:blogger.com,1999:blog-53246864840716464.post6677038318900861789..comments2024-02-29T00:46:38.800-08:00Comments on Washingtons Blog: U.S. Officially Hits Debt Ceiling ... Treasury Implements Emergency Measures to Raid Federal PensionsUnknownnoreply@blogger.comBlogger4125tag:blogger.com,1999:blog-53246864840716464.post-83119723642022164782011-05-16T21:52:13.286-07:002011-05-16T21:52:13.286-07:00The interest on the debt is a fraction of total sp...The interest on the debt is a fraction of total spending. So Geithner is lying when he threatens a bond default and Armageddon if the debt ceiling is not extended. There is no money in the SS fund, not even Treasuries. Just IOU's, or "Special Treasury Bonds," which are not liquid, and which cannot be traded on the open market. In effect, the SS money was taken and replaced with IOU's.Blurtmanhttps://www.blogger.com/profile/04997520846655923035noreply@blogger.comtag:blogger.com,1999:blog-53246864840716464.post-20101829306752171952011-05-16T21:48:30.092-07:002011-05-16T21:48:30.092-07:00I think you’ve got politics mixed up with economic...I think you’ve got politics mixed up with economics, and for the following reasons.<br /><br />I sympathise with the claim in your 12th March post (liked to above) that if spending cuts are to come, it’s unnecessary wars that should be cut rather than “essential services” to US citizens. But the latter distinction is totally irrelevant so far as economics goes. That is, $Xbn spent on the military creates much the same number of jobs as $Xbn spent on schools, roads or hospitals.<br /><br />Moreover, spending cuts are a crass solution to the deficit: the result is simply more unemployment. Same goes for tax increases.<br /><br />The solution is actually (and to quote you) to “print our way of our debt crisis”, which might seem like another disagreement with you. But it’s not, because there is printing and there is printing. I’ll explain.<br /><br />As Keynes pointed out (e.g. in a letter to Roosevelt), deficits can be funded EITHER by borrowed money . . . OR . . . by printed money. See 5th para here:<br /><br />http://www.scribd.com/doc/33886843/Keynes-NYT-Dec-31-1933<br /><br />Thus there is nothing wrong with printing one’s way out of a recession, AS LONG AS the printing is sufficient to raise demand and reduce unemployment, but no so much as to cause excess inflation.<br /><br />That point should not be confused with the point made by the various authorities quoted in your 12th March post (Hudson, Munchau, etc) namely that it is not a good idea to DELIBERATELY stoke excess inflation with a view to cheating one’s creditors.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-53246864840716464.post-50484731741916523972011-05-16T21:03:51.873-07:002011-05-16T21:03:51.873-07:00Niall F is simply a genius. With a few words he de...Niall F is simply a genius. With a few words he demolishes the barrier of BS preventing those who are unable to think for themselves from knowing that they are fed lies!<br /><br />He easily beat Krugman, the Nobel Laureate, at his own game!<br /><br />Good post!Fungus the Photo!https://www.blogger.com/profile/14879977479841544025noreply@blogger.comtag:blogger.com,1999:blog-53246864840716464.post-42286373629660488702011-05-16T18:57:45.247-07:002011-05-16T18:57:45.247-07:00With all due respect to NF and yourself, growing y...With all due respect to NF and yourself, growing your way out of debt caused in major part by an economic crash is not silly - and nor does history show it to be. Mind you, simply printing money for purposes of speculation and inflating away debt might not be a good idea, but only someone with a certain set of views would see these as all that "stimulus" might mean.Tonyhttps://www.blogger.com/profile/16861805397767560444noreply@blogger.com