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Original post by Antheus
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Original post by Promit
Well no. Inventing it apparently creates a deficit, so we have to discontinue social security and declare war on Iran to counteract that. That's what I'm told, anyway.
Well, yes. To make more money, president needs to go to Federal reserve and take out a loan. This loan comes with interest that needs to be paid. The loan is paid back through gross income of the country. If there isn't enough economic growth, then the situation is similar to wage stagnation due to inflation - the 2.3% raise every year doesn't increase salary fast enough to compensate inflation, so the $500/month loan starts getting bigger.
The important thing to keep in mind is that this arrangement of how things are done is entirely voluntary. If the US government (actually, congress) decided to, it could spend as much as it likes, the Fed be damned. After all, they can simply change the laws that define how the Fed operates.
Unlimited spending is not a good idea of course, but the benchmark should be whether the country's economic resources are fully utilised. When resources are idle - as right now in the US, this is very strong evidence that the government deficit is too small.
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The reason above scheme is employed is to prevent printing of money, which would lead to hyperinflation.
This is nothing else but an ideological myth; it is propagated to reduce the ability of government to implement effective economic policies.
The truth is that when government does deficit spending, it has a choice between issuing a matching amount of treasury bonds, or not issuing those bonds (or anything in between). The inflationary impact of the government budget is almost entirely independent of whether or not it issues those bonds.
Therefore, singling out deficit spending
without bonds issue as "printing money" is to misunderstand how the monetary system works.
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Original post by LessBread
Consider, on one hand he demanded the ruthless prosecution of the wars and the strict enforcement of border security, while on the other he railed against paying the taxes that fund those efforts.
A fine point, not sure if you're aware of it yourself: those taxes don't actually fund anything, at least not in a financial sense. The taxes simply take spending power away from the non-government sector. The government can then use the resulting spending gap to buy the goods necessary to implement its programs, including the wars.
Unfortunately, I don't have a good shorthand that could replace "fund" with something more correct.
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Original post by smr
And one thing kinda off topic. I'm tired of the people out there who are calling for a "common sense" solution to every problem. People: our problems are complex. If all we need is common sense to solve our problems, then we wouldn't have the issues we've got. Almost everyone's got this type of sense. That's why we call it common sense. I believe that if someone's trying to sell you a "common sense" solution to a complex and sophisticated issue, they're probably trying to pull the wool over your eyes.
I respectfully disagree.
The problems themselves aren't that complex, and there are common sense solutions. The difficulty is that people disagree on what the issues are and what an ideal world looks like. In other words, different opinions and different premises make things difficult.
In fact, I would take quite the opposite stance from what you're saying: the people who claim that the problems we're facing are overly complex are the ones trying to pull the wool over your eyes.
For example, high unemployment is great if you're a large employer of low-skilled labour - but of course you don't want to say so out loud, because the backlash would be huge. So instead you will argue that unemployment is a complex issue, and that one can't really do anything about it. That's a great way to stop people from thinking about solutions to the problem.
