Date: Oct 29, 2012 4:42 PM
Author: Paul A. Tanner III
Subject: Re: Speachless In New York (or, another OMG moment)

On Mon, Oct 29, 2012 at 2:05 PM, kirby urner <wrote:
> On Mon, Oct 29, 2012 at 12:02 AM, Paul Tanner < wrote:
>>> I was just making the point that Uncle
>>> Sam is broke,

>> Which is why I said it does not matter. That is, you claim he's broke
>> - - no matter how we measure being broke, or you wouldn't flat out claim
>> he's broke.

> I think it matters how Uncle Sam came to be in his current predicament.

Yes. And I showed it. Tax cuts.

Yet again, I show it below.

>> This second graph you give is public debt in absolute terms - next to
>> meaningless, since it could be going up forever even if the public
>> debt as percentage of GDP gets always closer to 0. The first graph you
>> gave is in terms of percentage of GDP, much more meaningful. And it
>> shows exactly what I said below.

> I don't think it could keep going up forever with a GDP that catches up.


Of course the total debt as measured in dollars could always go up with a growing GDP while the the total debt measured as a percentage of a growing GDP could always go down.

The first chart actually showed that even though the total debt as measured in dollars was going up with a growing GDP, the total debt as measured as a percentage of total GDP went down, under Clinton and the tax rates created under him and almost always after WWII before Reagan, under the tax rates essentially created under Franklin Roosevelt in the late 1930s.

It's an application of the simple comparison of the values of increasing functions that increase at different rates. Although both are increasing, the value of the slower growing one becomes a smaller and smaller percentage of the value of the faster growing one.

Here the two functions are GDP and total debt, where the faster growing one has been GDP under Clinton and the tax rates created under him and almost always after WWII before Reagan, under the tax rates essentially created under Franklin Roosevelt in the late 1930s. As I said before, under the tax rates created under Reagan and Bush we see the opposite, total debt increasing faster than GDP. Just look at the first chart you gave.

> Note that as a % of GDP the debt has increased every year since 2000
> and is around 100% these days.

>>> Taxes are not the only source of revenue.
>> In the US is it the vast majority.

> I don't know why you say that. Those deficits of so many hundreds of
> billions per year are uncovered expenses that have to be covered
> through borrowing.

Borrowing is not counted as revenue. Otherwise spending and revenue are always equal, the term "debt" no longer has the same meaning.

>>> I agree with Romney that China is sponsoring a lot of US government
>>> activities, such as NPR.

>> One wonders why that Bozo does not ask himself where the federal
>> government of China ultimately gets all that money to not only spend
>> at home but abroad as well - like lending money of the US government.
>> That is, what the original source actually is. Hint to answer: It is
>> not from revenue from their own economy. (Another hint: Gold standard
>> junkies are clueless as to the answer.)

> Yes, where does China get all that money for high speed rail etc.?
> From interest received on US debt?


> US taxpayers are paying for the growth of many economies around the
> world that way, in coughing up that interest.

"That interest"? You know how low the interest rate is?

>> Maybe he does know where all that money comes from, given that we have
>> the same type of ultimate source as they do, but just cannot handle

> The sun is the ultimate source of energy for Planet Earth

I'm talking about money.

And the ultimate source is the fiat money "printing press" - China creates out of thin air (as in "printing" it) massive amounts of money each year and spends it and most of it does NOT turn into inflation but real economic growth, and some of this spending is lending it to us, even though we could do the same thing and lend it to ourselves, taking China out of the loop.

>> the truth that the only reason we don't do for ourselves what they do
>> for themselves is that there are enough conservatives like him
>> standing in the way. I repeat that China's modern economy is clearly
>> modeled on Norway's per-capita-twice-as-large-as-the-US economy (and
>> is not modeled on the US's economy) at least in terms of creation of
>> money and where it goes into the economy (public banking) as well as
>> government ownership of corporations, each country's government owning
>> a majority of the shares of roughly 1/3 of all publicly traded
>> corporations as well as fully owning more corporations.

> I don't think just because two economies share some similarities one
> must say that one is modeled on the other.

I was talking in terms of at least public banking and the creation of money in public (as in government owned) and how to put it into the economy, via lending money to citizens to start businesses, as well as government owning corporations and which types to own.

> I've long thought the USA government should have a controlling share
> and management stake in many businesses. A chain of hotels, some
> banks, a rental car agency or two, run by the government?

But you are not getting it. The type of businesses that government has an ownership stake in in these countries are not so much the retail oriented businesses, but the big corporations of the "public infrastructure" types: The financial industry, oil and gas and coal, power generation (especially nuclear - look at France with its entirely socialized nuclear industry), shipping, armaments, and so on.

So-called state capitalism is taking over the world. That is a fact.

"Leviathan in Business: Varieties of State Capitalism and their Implications for Economic Performance"

Published: June 28, 2012
Paper Released: June 2012
Authors: Aldo Musacchio and Sergio G. Lazzarini

>> In this light, I reiterate everything I said in
>> and
>> including all the facts with respect to public banking I link to.

> I think more computations with money, debt, interest should go on in
> school. Budgeting.

Have them read the articles about fiat money and public banking I linked to here and elsewhere.

Facts are facts on these issues, like the fact that no country on a national fiat money system has ever gone into an economic depression [quantitatively defined]. Every country that has gone into an economic depression was on a gold standard or some other such standard where the country stupidly chose to give up its national sovereignty over its own national money supply by giving it over to other countries one way or another, including indirectly like something like the world's supply of gold. That's right: Fiat money is the only way a country has national sovereignty over its own national money supply.