There simply are not enough workers per retiree to fund the status quo. Taxes would have to be raised to wildly unrealistic levels — rates would have to double — to keep these programs afloat. It's true that cutting spending alone won't solve all of our problems but it is the place we must start. The American people will never trust Congress, an institution with an approval rating of 20 percent, to reform entitlement programs when we spend billions on failing programs and earmarks that benefit no one other than a member of Congress and a campaign contributor.
Those who claim it is too hard to cut domestic spending are misreading the electorate and misrepresenting history. Over the past decade, federal spending has doubled. Yet few Americans would say we're better off. If politicians in Washington had the will, the American people would back an effort that deemed much of the past growth in government as gratuitous, unnecessary, and reversible. In fact, 53 percent of the likely voters in a January Rasmussen poll said cutting spending would help the economy.
Third, politicians in Washington are already moving in this direction. New members such as Republican Sen. Scott Brown are being elected in "big government" strongholds like Massachusetts , and incumbents are warming to the idea of spending restraint. For instance, the Senate recently came within two votes of paying for an extension of unemployment benefits with reductions in spending instead of borrowing more money from future generations. Also, the number of members of Congress seeking earmarks — the gateway drug to spending addiction in Washington — is declining.
Finally, members of Congress are increasingly willing to touch "third rail" issues such as Social Security, Medicare, and Medicaid , which are driving our unsustainable deficits. It is the antithesis of ObamaCare. Instead of building on a broken system, it would renovate a broken system and put the individual, not the government, in charge of his or her own health care. Representative Ryan also has a more comprehensive plan called " A Roadmap for America's Future ," which is a serious, specific proposal to put our major entitlement programs on a sustainable path.
I'm also drafting a plan that will lay out 12 specific steps to break Congress's addiction to spending. What is lacking in Washington is not solutions, but the courage and political will to enact real change. Over the next two election cycles, the American people have an opportunity to mount a historic and heroic rescue of the American experiment.
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Everyone in America is required to accept U. The reward, which can be manipulated, is interest. The higher the interest, the more you will invest in money bank accounts, money markets, etc. The lower the interest, the more you will invest in non-money stocks, real estate. When you send taxes to the federal government, that money is destroyed and becomes a credit on a balance sheet. Mitchell, To continue your final thought in the preceeding.
So, then our government looses the ability to freely float those T-bills, treasury notes or bonds to the various sovereign nations that currently buy them. Your premise that the government has the ability to print as much money as it wishes, may be true, but flies in the face of every economic principle I have ever learned in college or life.
Yes, every government in existance has the ability to print ad infinitum. So what?? Then we have currency decreasing in value because of an increase in quantity. Another basic rule of economics, or supply and demand. I guess I would then classify your way of doing things as the epitome of irresponsibility. Yes, since the government has had the power to create money without limit. However, I do not suggest the government should create unlimited amounts of money.
Yet, because tax rates have gone down, I never have paid one penny toward those monster deficits. Thanks, Mike. Michael, I see your confusion. The government creates money ad hoc. The problem is semantic. I can see I am making little, if any, headway in this discussion. Another word for a decrease in purchasing power is inflation. What actually is inflation? It is an increase in the number of dollars available for the quantity of goods available. An increase in the price of something without a proportional increase in money to pay for it does not work.
And, an increase in the amount of money available without a proportional increase in the price of goods available for that money, will never happen. Basic economics. Fact: there is now broad agreement among economists that in the long run, the inflation rate is essentially dependent on the growth rate of money supply. This is in spite of the Keynesian economic theory that money supply has little or no effect on prices. It is absolutely ludicrous to even imagine that if you increase money supply there will be no long term effect on prices.
Fact: Money supply M3 in was appx. These are facts. Now, my original question involved the increase of money supply being inhibited by the reduction in outstanding personal and business debt. The deflation[decreasing] of debt. When a proportionate amount of money is created and a like amount of debt eliminated, there is no money growth.
They offset. Furthermore, when the Fed pursues quantitative easing, which they are doing hand over fist, the increase in money supply is effectively negated by placing the money in reserve. Why do this? Because no one is borrowing. Other than our government that is.
# Monetary Sovereignty
The economy is in recession. The easiest way for the government to expand the money supply is through bank lending.
Your printing of money theory at the present time is dead in the water due to the deflationary pressures of the credit markets. Thanks again for your time. I believe increasing debt is necessary for a growing economy. Inflation is a decrease in the value of money compared with the value of goods and services. Money is a commodity. The value of a commodity is based on supply vs demand. If you increase the supply and increase the demand proportionately, there will be no inflation.
Demand is based on risk vs reward. Risk is inflation or bankruptcy, leaving the key to preventing inflation: increasing reward. What is the reward for owning money? Utility and interest.
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Utility means you can trade it for goods, services and tax payments. When interest rates are high, there is more demand for money assets, such as savings accounts and money market accounts. When interest rates are low, there is more demand for non-money assets, such as stocks and real estate.
Interest regulates demand. See if you can see any causal relationship between money supply and inflation. You are correct however, that debt and money run hand in hand simply because all money is debt. Money is debt. The government has minimal control over bank lending, but has absolute control over deficit spending. Had they done that, there would be no recession today.
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Roger, After a few hours of setting up an old computer capable of opening a document from Word 97, my two vista comps would not load the doc due to macros or some bit of rubbish, I was able to read the first few pages of Mr. I will complete the dribble even though I find so many flaws in the first 12 pages the simplistic views are beginning to boggle my mind how someone with a reasonable bit of intelligence could buy into this crap.
Mosler totally ignores the fact that our monetary system continued on the gold standard until and appears to presume that dollars originated from the government with no basis of value whatsoever for their creation. As his example of family coupons indicates. Perhaps further along in his writings this will be clarified.
Of course some of the logic is appropriate, however, the basic explaination appears to presume no need for modern accounting principles, the GAO, or products or services necessary for the government to just make deposits to any and all accounts it deems necessary for the ongoing purposes of making everyone happy. I will withhold any further opinions until I read further. Now that is truly out there! The world changed dramatically in Unfortunately, most economists and virtually all of the media, the politicians and the debt-fearing public, do not understand that.
They continue to use gold standard words and logic. Thus, they cost the government nothing to create, and can be produced in unlimited quantities, just as the family coupons cost the family nothing and could be produced in unlimited quantities. Perhaps we both shall learn. I did not find anything that presumes no need for modern accounting principles. Could you quote the appropriate passage s?
And yes, the government has the power to credit your bank account with any amount. This power became unlimited in Oh, Michael, I neglected to ask: Where did Mr. It is true that taxation removes money from the economy. It also is true that a growing economy requires a growing supply of money. Therefore, reduces economic growth and employment and can lead to recessions.
But nowhere do I see Mr. Mosler saying that taxation causes inflation. In fact, he proposes taxation as a cure for inflation. I disagree with him, and we have had numerous discussions of that point. They now have the electronic funds you gave them. Simple accounting. There is no debit without a credit. Page 5 Deals with a soc. The premise being there is only an entry to spread sheets and no money to back the entry.
If he is speaking only in regard to paper money, this is true. Again, simple accounting procedures and principles. Everyone knows that! Because Mr. Mosler says so. My gosh, can it get any simpler than that??? I could go on and on with basic untruths or incomplete truths in the narrative. However, the fact is until accounting procedures change, and economic principles are proven to be incorrect, Mr. Mosler is blowing smoke.
Irresponsibility is not the answer. That is one of the main problems with the world we live in today. The majority of the population refuses to accept responsibility for their own actions and well being and wants the government to do everything for them. You and Mr. Mosler are proposing our government do the same thing. Are you truly that irresponsible? It cannot go bankrupt. You can. Do you know why? Until you do, you cannot understand economics. The debt-hawks have been saying the same thing, even with the identical words, for at least 70 years.
After 70 years of telling the world the sky is falling, at least they should re-examine their beliefs. If, for 70 years, a leader kept telling you, year after year, the world was about to end, at what point would you question his beliefs? Nothing tangible. No taxes. No gold. Just entries backed by full faint and credit.
It simply can make the entries and reverse entries at will. It has and uses that power every day. That is the reason we went off the gold standard. You quoted Mr. This says taxes remove money from the economy,[true? Rather than repeatedly mischaracterizing, then blindly leaping to find fault, read. You can learn that way.
Corporate debt is a ticking time bomb
Rodger, A characteristic that is truly amazing to me is the ability to mischaracterize through mischaracterization. You use your own argument to argue for or against another position of your, or Mr. Previously you have argued in one blog or response or another your position that increases in the money supply have little or no relation to increases in inflation.
Then you argue against that position with a position that too much money as spending power causes inflation. You are making a very difficult situation much to simplistic to solve. Mosler are right and all others are wrong? Is this a small bit of unwarranted arrogance? Or a great deal of misplaced ineptitude? Or just a failure to see the big picture because of blinders in regards a simplistic approach to solving a much more difficult equation? With kind regards, Mike. Money supply has had little or no influence on inflation, which actually has been related to oil prices..
Increases in money supply, without equivalent increases in demand, could cause inflation in the future. Can you see the difference?
As you wish neither to read nor to learn — a pity for someone only 63 — there seems no further reason for you to waste your time on Mr. Some bonds are more prone to default than others. Correct: Local governments cannot afford increased health care costs; the federal government can. Economics is a science. Treat it as such. Generalized, meaningless statements, are common among people who hate federal debt, but are not quite sure why.