Wednesday, October 19, 2011

Folks, the National Debt is Really No Big Deal

Inflation is a big deal but ND is not.

I'm going to have to ask you to read, though here's an excerpt from page 16 of 22 from 'Understanding the (our) Modern Monetary System'.

Click on this link, then click on the link that says One Click Download to get the PDF.  It's Only 22 pages! :)

And here's a handy inflation calculator.

(Maybe I should have called this "How I learned to stop worrying and love the national debt" reference anyone?)


  1. Hey kid - love the National debt! That's a good one - and a 22 page manifesto to boot. This country, let alone this world is in debt up to it's ears...what happens when it's time to pay the pied piper? But hey, down with the greedy know, those monsters of a people who give me a paycheck every two weeks; Those greedy companies who are struggling to keep their companies above water, employees employed and Uncle Sam happy with new taxes... and not another failed number to be added to the National debt. SIGH~ OH - I'm sorry, I chased a rabbit

  2. DeanO, Don't worry, it's all cash flow. :)

    The only thing to fear is the rush to give government control of everything. And I'm serious, I'm not worried about the ND, only inflation.

    Unreal isn't it ? I talk to people who freely admit that government can't tie its own shoes, yet, they beg for more government control.

  3. This explains why we are in the mess we are in. Big spenders can point to scholarly papers, people with PhD's and even Nobel economists who say it's not big deal! Just print more money!

    Meanwhile, the money we have save all our lives is not worth the paper it's printed on.

    It can end badly. Ask Argentina.

  4. Silverfiddle, yes inflation is the real killer and most people probably don't even realize it til they start using their 'nest egg' and wonder what the hell happened.

    But I'm still not worried about the national debt, it can go to 50 trillion for all I care.

  5. Not sure I follow the logic here. But then again I can barely balance my checkbook. I always thought that as the government spends more it takes money out of the private sector which could have been used for capital investment, then they have to print more curreny which then devalues the dollar which causes inflation.

  6. Ohhhh I'm such a Keynesian weenie!

  7. Sig, Well, I don't claim to be a super genius, but I think the main reason for inflation is the lack of having our money tied to a physical asset. Like the gold standard. I don't think it much matters how many bonds Japan buys from us. Unless they do a run on the bank, at which point the music stops and there are no way enough chairs.

    That and wage and price inflation which is really an artificial phenomenon.

    When Venezuela? went hyper-inflation and you had to haul a wheelbarrow of money to the store to buy a potato, it wasn't caused by them selling bonds to other countries.

    China was essentially buying our bonds so we'd have money to buy their products.

    It all sounds like a never ending game of musical chairs to me.

    I reserve the right to not know what I'm talking about. :) I thought there were some interesting concepts in the paper though. But I'm still not concerned about national debt.

    The main thing I got out of that paper was that "When the government spends money in the private sector, it needs to spend it on productivity/productive assets." And I don't see us doing that now. oblabber is simply throwing money at the parasitic unions which is the main reason we've had big inflation the last couple years.

  8. In the eighties, I would tell the libs that the national debt was no big deal--now not so sure. 4 Trillion or 14 trillion will take 35,000 yrs. to pay down.

  9. They Say, I don't believe we will ever pay against the national debt.

  10. never thought I would state this- but- your conclusion rings true---
    so - gold- silver- and...
    how about precious stones --Hmmmmm
    emerald- sapphire-opal-......
    diamonds are OK-not my favorite though...

  11. Carol-CS, Well, I don't know anything about precious stones. Though it seem that now that they can manufacture them I'm not as inclined to consider them an investment unless you're talking about a known collectible like the Hope diamond. A little out of my price range.

    So, I've been trading gold. It could be that gold is going to take a pretty good dip here shortly. For about a decade now, it has come down to the 150 day average, bounced and headed back up. It's just a few dollars from the 150 day average again. Will it bounce or breakdown this time? I want to see what it does before I place my next bet.

  12. Let's play their insane game for a moment. Okay debt is not the problem, it is inflation. How do we deal with our debt? We devalue our currency, so that the 14 trillion we owe is not worth as much. Wait... I guess debt is the problem, even if you think it isn't.

  13. This is perfect. Thanks for the link, Kid. I will be forwarding this to my uncle as well as many other Liberals out there that haven't quite got the whole debt thing.

  14. Trestin, Well, it's a little semantic. Here is a link to a paper showing our ROI in GDP growth versus each dollar of Debt creation.
    A paper from Legg Mason showing our ROI in GDP growth from debt creation. It's bad and it's been going on a long time. Interestingly, the chart starts right about the time LBJ was really putting the screws to America. Maybe coincidence.

    It's not the debt, it's the money we spend that doesn't provide any ROI in GDP, and this is the real problem. So, in a sense, debt is the problem, but debt is more a symptom of this poor investment by the government when they generate debt.

  15. ndh777. Thank you sir. Check the ling I just posted for Trestin in the above comment. It adds well to the discussion.