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0 pointstastyfreeze4y ago0 comments

We have no money to spend! How is it extremist to prevent more spending when we are borrowing to even cover the existing budget?

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8 comments · 6 top-level

throwawayboise4y ago· 2 in thread

We aren't really borrowing. The debt will never be "paid back" as it's not really debt, it is a dilution of value. The more dollars we create and spend, the less each dollar is worth.

tastyfreezeOP4y ago

Whether it is borrowing or dilution is a petty point to quibble about. The government already consumes 42% of what the people create. The questions are:

Are you OK with you and your descendants being made more poor by government dilution?

How much of your earnings are you comfortable forking over to government under threat of force?

mindslight4y ago

It's not just quibbling. Government spending spending on social programs is the exact same taking/dilution that occurs when the Federal Reserve gives a bunch of new money to the banks by declaring that interest rates shall be lower. The former receives intense scrutiny, while the latter is politically uncontested. Furthermore, government spending at least creates direct price inflation, whereas finance industry infusion mainly causes asset inflation and thus doesn't trigger the Fed's criteria to ever slow down.

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shkkmo4y ago

There is plenty of money if you raise taxes so that you can afford do most of your borrowing during crises like this one to actually fund the necessary mandates.

bryanlarsen4y ago

The federal government has full control over its own money supply. It has an infinite supply of money, constrained only by inflation. It can, and regularly does, borrow money from itself.

Budget surpluses are extremely harmful -- they shrink the money supply, forcing industry into deficit.

jschwartzi4y ago

We didn’t have any trouble borrowing absurd amounts of money in the past to fight wars and build border walls. WWII was paid for in large part with US government debt. Debt can be a useful tool for getting out of a bad situation. The only difference I see here is that we’re unwilling to borrow to make life easier for the 95% of people who live tenuously within the bounds of ordinary life. And when we stop helping them everyone suffers.

kevin_thibedeau4y ago

That same group is the first in line to shower their states with pork and a disproportionate share of tax revenue.

anigbrowl4y ago

One major political party campaigns around delivering tax cuts and minimizing collections, and this can result in economic distortions.

A relevant example is that the last big tax cuts package in 2017 created lots of 'opportunity zones' which exempted people from paying capital gains on many real estate transactions. This was ostensibly to encourage investment in poor neighborhoods, but I live on the edge of one such opportunity zone and I can assure you it was already a red hot real estate market before that tax cut.

Everyone in this area gets junk mail from real estate agents on an almost daily basis because property prices have risen stratospherically and those agents get a 3% cut of any transaction they handle.

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