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[quote]The bond purchasers are the ones who have been "drained" of the 3.7T and it does matter that that was their own choice.[/quote] Yes, and the bond purchasers money is part of the private sector. It is money coming out of the private sector. The private sector as a whole is 3.7T poorer. It makes no difference in real terms whether that
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One last example to try and explain my rational to you, Clayton: Let's say that the gov't today cut taxes to ZERO. But the gov't still spent 3.7T. They were able to borrow the entire amount in my hypothetical. (No foreign sources or inflation for argument's sake.) Would the burden that year on the private sector be zero to you in that
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[quote]But to say that all government debt without exception is indistinguishable from taxation in the present is ludicrous. You only do a disservice to truth by insisting on promulgating this.[/quote] Au contraire. It's just the opposite. It's you that are doing disservice to the truth by reasoning that gov't borrowing is not, in effect
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[quote]No drain. The money went to Jerry the Asphalt guy the day after Joe lent it to the government.[/quote] Exact same thing with taxes. The money Joe was "taxed" went to Jerry the Asphalt guy the day after Joe was "taxed." Taxed and borrowed are interchangeable when it comes to gov't spending. It makes no difference. The gov't
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[quote]Nonsense! A bond is an asset and Joe receives that asset in return for his $1M. You really need to slow down and think about what I'm saying rather than just trying to repeat yourself in so many different ways.[/quote] No - it's not nonsense. It's my whole point - and what you don't seem to grasp. Yes, it is an individual asset
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[quote] 2011 Joe buys $1M gov bond -> Gov buys $1M of asphalt to pave a road OR 2011 Joe buys $1M corp bond -> Corp buys $1M of asphalt to pave parking lots Either, way, the public feels no burden from Joe's choice in 2011. You are flat wrong. [/quote] 2011 Joe is taxed $1M -> Gov buys $1M of asphalt to pave a road. No difference there
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One more example of "gov't spending being the real tax." What is the tax burden on the private sector for the following two examples? (Hypotheticals - and the borrowing is from the private sector - not foreign sourced or printed.) 2011: Gov't spending = 2.5T Revenues (taxes) = 2.0T Deficit (borrowing) = 500B 2016: Gov't spending
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Let me try explain my contention another way: The 14T debt. Except for foreign borrowings - I am saying that that debt ceased to be a burden to the private sector as a whole once it was lent. The burden on the private sector was felt the year it was lent. It was removed from the private sector at that time . The net loss was suffered in that year only
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[quote]Then you don't know very far. The first one that comes to my mind is the government of a country called the "United States."[/quote] Ok, I was wrong. There have been some periods where debt was paid down. But has it ever been paid down completely without default or monetization? I was thinking more of the current indebted Western
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Wealth comes from innovation (ideas, knowledge) put into practice. Throughout time - every invention, innovation, new efficiency is the wealth we enjoy today. Think about this: what if people were put on a deserted planet (with lots of resources) but no knowledge whatsoever? Completely ignorant. Wealth would not be created for them until they learned