Cutting the deficit, post 2017 tax reform

[Jason Harvestdancer]

So, assuming "all money comes from the govt", double surplus and double deficit are the least desirable.

Now when I said Eisenhower ran a surplus, he only did it during two years in the middle. He presided over a trade surplus for most of his term, but did oversee a trade deficit near the end for one year.

So, at the beginning of his term he had 2. In the middle he had 1. for one year he had 4. He never had 3. We don't have any examples of number 3, so we really can't know if it is a disaster, including the alleged surpluses under Clinton. Eisenhower was the last president to ever run a surplus. If you look at the national debt at the Treasury website, you will see it only increasing during Clinton's term. The bottom line tells us a lot more than fancy accounting, off budget income, off budget expenditures, etc. So we never had number 3 in modern times. Perhaps before WWII. It was annoying enough trying to find sources on the 1950s, I don't relish looking earlier. Hoover ran consecutive deficits, but Coolidge and Harding had some significant surpluses.

Basically you should have double surpluses to absorb excess funds or double deficits to release sufficient funds.

It is an interesting theory. But it does rely on a flawed premise.

 

[humbleman]

Being in debt is becoming a slave.

No argument can invalidate such a truth.

When you owe money you are slave of the loaner.

The lender will input the "conditions".

There are so many examples of how lenders have forced the US government (politicians to be more specific) to obey their orders and fulfill their conditions.

Until one day in the future we finally have honest politicians, the national debt is the reason of why the US -even if we swear the contrary- is not a free country.

 

[Horatio Parker]

So, assuming "all money comes from the govt", double surplus and double deficit are the least desirable.

Now when I said Eisenhower ran a surplus, he only did it during two years in the middle. He presided over a trade surplus for most of his term, but did oversee a trade deficit near the end for one year.

So, at the beginning of his term he had 2. In the middle he had 1. for one year he had 4. He never had 3. We don't have any examples of number 3, so we really can't know if it is a disaster, including the alleged surpluses under Clinton. Eisenhower was the last president to ever run a surplus. If you look at the national debt at the Treasury website, you will see it only increasing during Clinton's term. The bottom line tells us a lot more than fancy accounting, off budget income, off budget expenditures, etc. So we never had number 3 in modern times. Perhaps before WWII. It was annoying enough trying to find sources on the 1950s, I don't relish looking earlier. Hoover ran consecutive deficits, but Coolidge and Harding had some significant surpluses.

Basically you should have double surpluses to absorb excess funds or double deficits to release sufficient funds.

It is an interesting theory. But it does rely on a flawed premise.

What premise is that?

 

[Harry Bosch]

Being in debt is becoming a slave.

No argument can invalidate such a truth.

When you owe money you are slave of the loaner.

The lender will input the "conditions".

There are so many examples of how lenders have forced the US government (politicians to be more specific) to obey their orders and fulfill their conditions.

Until one day in the future we finally have honest politicians, the national debt is the reason of why the US -even if we swear the contrary- is not a free country.

I'm a former banker. How did lenders force the US government to obey their orders? What orders?

 

[Hermit]

Being in debt is becoming a slave.

No argument can invalidate such a truth.

When you owe money you are slave of the loaner.

The lender will input the "conditions".

After taking out two loans to buy houses and four loans to buy trucks between 1988 and 2002 I can report happy outcomes. The only conditions were those set out clearly on the contracts before I signed them - basically to repay the moneys plus a defined interest component - and I finished up very much the better for having borrowed money on every occasion.

 

[Harry Bosch]

Being in debt is becoming a slave.

No argument can invalidate such a truth.

When you owe money you are slave of the loaner.

The lender will input the "conditions".

After taking out two loans to buy houses and four loans to buy trucks between 1988 and 2002 I can report happy outcomes. The only conditions were those set out clearly on the contracts before I signed them - basically to repay the moneys plus a defined interest component - and I finished up very much the better for having borrowed money on every occasion.

Commercial lenders will often put "conditions" on a loan for business loans. Another word is covenant. A typical covenant for example is that borrower must maintain working capital of 1.50 or better (current assets such as cash and receivables - current liabilities). But you are correct, most banks don't put conditions on retail loans. Many states don't even require personal guaranties.

 

[Hermit]

Being in debt is becoming a slave.

No argument can invalidate such a truth.

When you owe money you are slave of the loaner.

The lender will input the "conditions".

After taking out two loans to buy houses and four loans to buy trucks between 1988 and 2002 I can report happy outcomes. The only conditions were those set out clearly on the contracts before I signed them - basically to repay the moneys plus a defined interest component - and I finished up very much the better for having borrowed money on every occasion.

Commercial lenders will often put "conditions" on a loan for business loans. Another word is covenant. A typical covenant for example is that borrower must maintain working capital of 1.50 or better (current assets such as cash and receivables - current liabilities). But you are correct, most banks don't put conditions on retail loans. Many states don't even require personal guaranties.

Ah, there were other conditions, such as having to come up with collateral. I just wanted to keep things simple. The important bit was that the conditions were known and mutually agreed on up front and none were added after contracts had been signed. Had I borrowed from Joe "Fingers" Galletti, the situation might have been quite different.

 

[Harry Bosch]

Commercial lenders will often put "conditions" on a loan for business loans. Another word is covenant. A typical covenant for example is that borrower must maintain working capital of 1.50 or better (current assets such as cash and receivables - current liabilities). But you are correct, most banks don't put conditions on retail loans. Many states don't even require personal guaranties.

Ah, there were other conditions, such as having to come up with collateral. I just wanted to keep things simple. The important bit was that the conditions were known and mutually agreed on up front and none were added after contracts had been signed. Had I borrowed from Joe "Fingers" Galletti, the situation might have been quite different.

Yea, for commercial loans, banks generally like to see three sources of repayment: cash flow, collateral, guarantor support. Equity investors generally only need one source (cash flow) but their return is far far greater than a banks.

 

[Loren Pechtel]

Being in debt is becoming a slave.

No argument can invalidate such a truth.

When you owe money you are slave of the loaner.

The lender will input the "conditions".

There are so many examples of how lenders have forced the US government (politicians to be more specific) to obey their orders and fulfill their conditions.

Until one day in the future we finally have honest politicians, the national debt is the reason of why the US -even if we swear the contrary- is not a free country.

A slave? I've had mortgages and I never felt like a slave. I wouldn't have paid less had I been renting and with a loan a chunk of it is going to our future rather than just gone.

 

[LordKiran]

Being in debt is becoming a slave.

No argument can invalidate such a truth.

When you owe money you are slave of the loaner.

The lender will input the "conditions".

There are so many examples of how lenders have forced the US government (politicians to be more specific) to obey their orders and fulfill their conditions.

Until one day in the future we finally have honest politicians, the national debt is the reason of why the US -even if we swear the contrary- is not a free country.

Being a slave is being owned as property be another person. Being in debt is having an obligation to someone else.

Slavery is compulsory. Financial obligations are not, as evidenced by all those dead templars who had the unfortunate circumstance to be owed money by a french king.

Truly a debt and slavery only have one thing in common: They're only as powerful as the actors or institutions which enforce them.

By the way, the word you're looking for is Usury.

https://en.wikipedia.org/wiki/Usury

 

[Jason Harvestdancer]

So, assuming "all money comes from the govt", double surplus and double deficit are the least desirable.

Now when I said Eisenhower ran a surplus, he only did it during two years in the middle. He presided over a trade surplus for most of his term, but did oversee a trade deficit near the end for one year.

So, at the beginning of his term he had 2. In the middle he had 1. for one year he had 4. He never had 3. We don't have any examples of number 3, so we really can't know if it is a disaster, including the alleged surpluses under Clinton. Eisenhower was the last president to ever run a surplus. If you look at the national debt at the Treasury website, you will see it only increasing during Clinton's term. The bottom line tells us a lot more than fancy accounting, off budget income, off budget expenditures, etc. So we never had number 3 in modern times. Perhaps before WWII. It was annoying enough trying to find sources on the 1950s, I don't relish looking earlier. Hoover ran consecutive deficits, but Coolidge and Harding had some significant surpluses.

Basically you should have double surpluses to absorb excess funds or double deficits to release sufficient funds.

It is an interesting theory. But it does rely on a flawed premise.

What premise is that?

The assumption "all money comes from the govt."

Have you ever watched Shawshank Redemption? Do you remember when Brooks was about to be released, and when crazy? Red described him as "institutionalized"? Our experience with Central Banking and Fiat Currency has left us "institutionalized", we are living in "prison normal." I've got some news though, prison isn't normal.

 

[Canard DuJour]

So, assuming "all money comes from the govt", double surplus and double deficit are the least desirable.

Now when I said Eisenhower ran a surplus, he only did it during two years in the middle. He presided over a trade surplus for most of his term, but did oversee a trade deficit near the end for one year.

So, at the beginning of his term he had 2. In the middle he had 1. for one year he had 4. He never had 3. We don't have any examples of number 3, so we really can't know if it is a disaster, including the alleged surpluses under Clinton. Eisenhower was the last president to ever run a surplus. If you look at the national debt at the Treasury website, you will see it only increasing during Clinton's term. The bottom line tells us a lot more than fancy accounting, off budget income, off budget expenditures, etc. So we never had number 3 in modern times. Perhaps before WWII. It was annoying enough trying to find sources on the 1950s, I don't relish looking earlier. Hoover ran consecutive deficits, but Coolidge and Harding had some significant surpluses.

Basically you should have double surpluses to absorb excess funds or double deficits to release sufficient funds.

It is an interesting theory. But it does rely on a flawed premise.

What premise is that?

The assumption "all money comes from the govt."

Have you ever watched Shawshank Redemption? Do you remember when Brooks was about to be released, and when crazy? Red described him as "institutionalized"? Our experience with Central Banking and Fiat Currency has left us "institutionalized", we are living in "prison normal." I've got some news though, prison isn't normal.

Fiat currency with central banking is patently the norm (Shawshank notwithsatnding).

I think you misunderstand what was meant by "all money comes from the govt", which was intended in the context of sectoral balances. Ninety-odd percent of the money in circulation comes from private sector bank loans, but nets to zero since it's "created" along with corresponding private sector liabilities via double entry book keeping. Only gov't can create debt-free, net-plus money. Anything else is counterfeiting or fraud. And gov't mostly doesn't do that, but "borrows", i.e. issues bonds i.e. private sector financial assets along with corresponding tax liabilities, i.e. runs deficits. Thus a gov't surplus is necessarily a private sector deficit and vice versa (or as near as dammit) :



Now you might prefer something else - as might I - but that doesn't make the above wrong as a matter of fact.

 

[Horatio Parker]

So, assuming "all money comes from the govt", double surplus and double deficit are the least desirable.

Now when I said Eisenhower ran a surplus, he only did it during two years in the middle. He presided over a trade surplus for most of his term, but did oversee a trade deficit near the end for one year.

So, at the beginning of his term he had 2. In the middle he had 1. for one year he had 4. He never had 3. We don't have any examples of number 3, so we really can't know if it is a disaster, including the alleged surpluses under Clinton. Eisenhower was the last president to ever run a surplus. If you look at the national debt at the Treasury website, you will see it only increasing during Clinton's term. The bottom line tells us a lot more than fancy accounting, off budget income, off budget expenditures, etc. So we never had number 3 in modern times. Perhaps before WWII. It was annoying enough trying to find sources on the 1950s, I don't relish looking earlier. Hoover ran consecutive deficits, but Coolidge and Harding had some significant surpluses.

Basically you should have double surpluses to absorb excess funds or double deficits to release sufficient funds.

It is an interesting theory. But it does rely on a flawed premise.

What premise is that?

The assumption "all money comes from the govt."

Have you ever watched Shawshank Redemption? Do you remember when Brooks was about to be released, and when crazy? Red described him as "institutionalized"? Our experience with Central Banking and Fiat Currency has left us "institutionalized", we are living in "prison normal." I've got some news though, prison isn't normal.

Sure, there are other forms of money. But in the context of national and global economies, they're trivial.

 

[bilby]

The assumption "all money comes from the govt."

Have you ever watched Shawshank Redemption? Do you remember when Brooks was about to be released, and when crazy? Red described him as "institutionalized"? Our experience with Central Banking and Fiat Currency has left us "institutionalized", we are living in "prison normal." I've got some news though, prison isn't normal.

Fiat currency with central banking is patently the norm (Shawshank notwithsatnding).

I think you misunderstand what was meant by "all money comes from the govt", which was intended in the context of sectoral balances. Ninety-odd percent of the money in circulation comes from private sector bank loans, but nets to zero since it's "created" along with corresponding private sector liabilities via double entry book keeping. Only gov't can create debt-free, net-plus money. Anything else is counterfeiting or fraud. And gov't mostly doesn't do that, but "borrows", i.e. issues bonds i.e. private sector financial assets along with corresponding tax liabilities, i.e. runs deficits. Thus a gov't surplus is necessarily a private sector deficit and vice versa (or as near as dammit) :

View attachment 13963

Now you might prefer something else - as might I - but that doesn't make the above wrong as a matter of fact.

If you are going to go around suggesting that ideology doesn't outweigh facts, then you are never going to get any agreement from libertarians on economic questions.

 

[Jason Harvestdancer]

Fiat currency with central banking is patently the norm (Shawshank notwithsatnding).

I agree it is the norm now. I never denied that it is the norm now. That doesn't change that it being the norm is the prison norm.

In a historic perspective, it is not the norm, but most people are completely institutionalized.

 

[LordKiran]

Fiat currency with central banking is patently the norm (Shawshank notwithsatnding).

I agree it is the norm now. I never denied that it is the norm now. That doesn't change that it being the norm is the prison norm.

In a historic perspective, it is not the norm, but most people are completely institutionalized.

Historically there was no national sovereignty either, so what's your point?

 

[Canard DuJour]

Fiat currency with central banking is patently the norm (Shawshank notwithsatnding).

I agree it is the norm now. I never denied that it is the norm now. That doesn't change that it being the norm is the prison norm.

In a historic perspective, it is not the norm, but most people are completely institutionalized.

And what makes it "the prison norm", other than your not liking it?

You've also yet to say why MMT is so wrong, other than your not liking it.

 

[Horatio Parker]

Fiat currency with central banking is patently the norm (Shawshank notwithsatnding).

I agree it is the norm now. I never denied that it is the norm now. That doesn't change that it being the norm is the prison norm.

In a historic perspective, it is not the norm, but most people are completely institutionalized.

Not really. Commodity money is also issued by an authority, which, if the currency users are fortunate, issues only the appropriate amount for the available reserves.

Before currency, there was credit, again issued by the authority of the state. Hammurabis codes are thought by some to be not price controls, but a price index providing citizens with relative values.

Do you have any examples of "prison" free money?

 

[LordKiran]

Fiat currency with central banking is patently the norm (Shawshank notwithsatnding).

I agree it is the norm now. I never denied that it is the norm now. That doesn't change that it being the norm is the prison norm.

In a historic perspective, it is not the norm, but most people are completely institutionalized.

Not really. Commodity money is also issued by an authority, which, if the currency users are fortunate, issues only the appropriate amount for the available reserves.

Before currency, there was credit, again issued by the authority of the state. Hammurabis codes are thought by some to be not price controls, but a price index providing citizens with relative values.

Do you have any examples of "prison" free money?

Indeed. All coinage must come from a central authority capable of protecting its 'IP' (The coin in question) after all, whats to stop counter-fitting or debasement if coinage isn't backed by a central authority capable of regulating both purity and authenticity?

 

[Jimmy Higgins]

Fiat currency with central banking is patently the norm (Shawshank notwithsatnding).

I agree it is the norm now. I never denied that it is the norm now. That doesn't change that it being the norm is the prison norm.

In a historic perspective, it is not the norm, but most people are completely institutionalized.

Yeah, before that norm, there were bank panics and cornering attempts on commodities. The US hasn't suffered from a bank panic in several decades, though that is more FDIC than Fed related.

You look at bitcoin and anyone that stood by it the entire time is a billionaire now. Of course, when the currency keeps deflating and increasing in value, makes it hard to justify using it. And of course, the volatility is incredible based on the fact the money has absolutely no basis for a value, other than libertarian Fed paranoia.