Talk of The Villages Florida - How to pay for all this new debt

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Quote:

Originally Posted by blueash (Post 1744062)

Yes, I am aware of the debt ceiling. It gets increased to prevent default. But you raise an interesting question. As these stimulus bills are spending trillions without any adjustment to income, how are they fitting under the debt ceiling limitations? So I looked it up.

I had forgotten that Congress and Trump suspended the debt ceiling in 2019 for two years. So right now there is no debt ceiling. We can borrow and spend whatever is needed that can pass Congress and get signed.

My modest suggestion would decrease the debt, so the ceiling, when it returns, would be benefitted.

The debt ceiling was raised under Clinton and Obama also.

Quote:

Originally Posted by blueash (Post 1744170)

As was shown above, there were 4 years of surpluses at the end of the Clinton years. The deficit returned not because of increased spending but rather because of decreased tax revenue in 2001-2002.

What does that have to do with what I posted? The spending increases all the time and every year the more tax people clamor for more tax to support the spending. If you don't believe politicians buy votes with their spending you are deluding yourself. Why do pork projects get added to finance special interest projects in their districts? I'll make it real easy, to get votes.

Quote:

Originally Posted by Number 10 GI (Post 1747545)

What system of government will not do it?.

I don't know. I guess the only way to balance the budget is for the voters to demand it. Not likely. But, if the constitution had included a balanced budget mandate, I think Congress would have still found a way to circumvent it.

It would help if we stopped giving money away like candy. PBS, Kennedy Center for example? $100,000,000 grant. How does this help Americans? Still sending money to other countries, most still hate us but will take our money (bribes?).

Quote:

Originally Posted by Byte1 (Post 1744253)

The national debt has not been paid down since Eisenhower.

He balanced the budget, but did not eliminate the debt

I'll be the 1st to admit I am not an economist but today I read an long article about the relationship between government spending, the Treasury, and the Federal Reserve. They were trying to explain in terms even I could understand how the Fed monetizes debt. I really was shocked to believe this was legal. I think I now understand why stock market is recovering regardless of record unemployment and record federal debt. I guess I question if stock market is a good long term investment. CD's and savings bonds will never pay more than 1% until some kind of crash occurs. Like I said I'm not an economist.

Quote:

Originally Posted by Paper1 (Post 1748284)

Trump likes to say that the Democrats embrace Socialism. What we have now is Sociaiism where the benefits flow mostly to the wealthy. In the past, the Fed was only permitted to purchase riskless assets like Treasury bonds. Now in cahoots with the Treasury, they have a workaround called special purpose vehicles (SPVs) where the Fed can purchase investment grade corporate bonds and even junk bonds. If these default, the taxpayer through the Treasury will suffer the losses. When you have a price insensitive buyer like the Fed in the capital markets, you get price distortions and misallocation of capital. If the stock market tanks again, I have confidence that the Fed will create another SPV to buy stock. While the government has thrown a few bones to the general public in the form of stimulus checks, more money by far has been devoted to bail out corporate America, which will never be held accountable for bad business decisions like the borrowing binge of the last few years to do stock buybacks.