Working as designed.
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From what is most likely a bourgeois site (warning):
http://www.alkalizeforhealth.net/Ldebtclock.htm
I like to link this to my corporate finance material, and to my previous questions regarding GDP and national income.
Is the 340% figure (higher when subtracting depreciation) getting close to being "bad"? From what I learned in corporate finance (through reading various financial statements and doing financial ratio analysis), and from this blog on corporate earnings, a LTD-to-EBITDA ratio (long-term debt vs. earnings before interest, tax, depreciation, and amortization) of 6 upwards is the danger level for corporations.
Thoughts?
"A new centrist project does not have to repeat these mistakes. Nobody in this topic is advocating a carbon copy of the Second International (which again was only partly centrist)." (Tjis, class-struggle anarchist)
"A centrist strategy is based on patience, and building a movement or party or party-movement through deploying various instruments, which I think should include: workplace organising, housing struggles [...] and social services [...] and a range of other activities such as sports and culture. These are recruitment and retention tools that allow for a platform for political education." (Tim Cornelis, left-communist)
Working as designed.
To clarify, this is a summary judgment of 3 factors:
- the use of money as a debt instrument
- the use of fractional reserve banking to create money (debt) out of thin air
- the need for endless economic growth
Copy/pasted from PM by mutual agreement:
The theory I read talks about the problems associated with increases in productivity and the effect on profit and purchasing power. It is a critique of the price system.
Done.
One of these days America will have to pay all of this off, and that'll collapse the state.
At the very least it'll be entertaining.
formerly Brick
formerly COMRADE CRUM
"To defend Stalin requires more courage than making the Revolution." -Hafizullah Amin
Join the Midwest Marxist-Leninist group.
More stats are provided in this article, but my question remains open to additional answers (although Lynx provided a key part to his answer regarding the creation of money out of thin air):
The Explosion of Debt and Speculation
What I found interesting in the article above was the part regarding mergers and acquisitions:
EDIT: Here's more (from another site):
Un-funded Medicare/Medicaid contingent liabilities: $50 trillion
Other off-budget Federal Govt. borrowings: ???
Impact trillions of dollars of derivatives on business & financial sector debt: ???
"A new centrist project does not have to repeat these mistakes. Nobody in this topic is advocating a carbon copy of the Second International (which again was only partly centrist)." (Tjis, class-struggle anarchist)
"A centrist strategy is based on patience, and building a movement or party or party-movement through deploying various instruments, which I think should include: workplace organising, housing struggles [...] and social services [...] and a range of other activities such as sports and culture. These are recruitment and retention tools that allow for a platform for political education." (Tim Cornelis, left-communist)
Because they didn’t know how else to invest the funds, in mid-2006 U.S. corporations held the equivalent of 20 percent of their stock market value as cash and Treasuries.
It's as if these new debt 'investments' are the market response to a demand for new types of investment 'products'.
A default on the national debt doesn't affect infrastructure or the education levels and skills of the workforce. Does it? What is to stop a "New Deal, part 2" from being implemented?
Ceteris paribus, a default by the US Government on its bonds would not, in and of itself, decrease infrastructure, education, or the skills of the workforce. However, remember that both infrastructure and education are funded in part by the Federal Government. Should that Government go "bankrupt", it is likely this funding will slow if not cease.
However, it is extremely unlikely that the US Federal Government will default on its debts. For one, it has never happened before. Secondly, and more importantly, the Federal Government has ways of manipulating the money supply such that it will always have enough dollars to pay its outstanding debts.
Such manipulation would tend to lead to hyper inflation, among other things.
The federal debtload is WAY too high... it numbers in the trillions.
That argument is out of date, as the dollar is declining in value, and more and more financial/business institutions are switching to the Euro as a result.
formerly Brick
formerly COMRADE CRUM
"To defend Stalin requires more courage than making the Revolution." -Hafizullah Amin
Join the Midwest Marxist-Leninist group.
The federal debt is high; certainly a larger number than I can imagine. However, I still don't think default is likely, at least not right away.
Look at it this way: When the Government borrows money it sells Government issued treasury securities: T-bonds, T-bills, T-notes, TIPS. While these instruments vary in length of maturity and in payment schedules, they are all promises to pay the security holder a defined number of American Dollars at some future date (or dates).
Thus, if China buys $1 Trillion dollars in T-bills (which would cost less than $1 Trillion dollars b/c of interest), the US is obligated to pay China $1 Trillion American dollars in one year. Notice that's American Dollars, not gold, not Euros, but dollars. So, the increase in the price of gold or the Euro does not affect the National Debt.
What it could affect, however, is the ability of the US to borrow money in the future. Presumable, if things got really out of hand, the US would not be able to sell securities to one country to pay off the securities owed to another. This has not happened yet as the US has always found eager buyers for its securities. Moreover, the US could always increase the rates of return on its securities, which would make them more appetizing for investors and other nations.
However, lets assume that the US can find 0 new buyers for its securities, even after increasing the return on those securities, because of its unbelievably high outstanding debts.
Well, the US could avoid defaulting in a number of ways, including some combination of inducing the Federal Reserve to lower the interest rate, thus increasing the money supply, while at the same time raising taxes to increase revenues. Moreover, if all else failed, the US could simply print more money. Remember, the debts are in dollars, and the US controls the making of those dollars. Although, hyper-inflation would ensue, perhaps also some anarchy and a bit of martial law, so it's not exactly a good solution from the stand point of a capitalist. But, other nations have done it.
Why would going the hyperinflation route be preferable to defaulting? It sounds about as dishonest.
Another question is foreign-ownership of tangible American assets. Would would happen to those assets?
There is no honesty or dishonesty in a Price System, or only such as relates to some very twisted concepts. Those concepts are moral concepts or Price System concepts within a civil society context. Civil society meaning ancient middle eastern moral value system. A scarcity based social system.
Only within the context of 'if you believe the premise, the rest is easy' , can sense be made of it.
All choice is determined by whether something either makes a profit or not, and further by the concept of private property.
There is a saying : Most fortunes were originally made by a hidden 'crime'. If the crime is hidden well enough, no one ever finds out about it.
The U.S. currency will probably be the last currency standing. It will work internally as long as there are 'believers' and as long as the debt structure system can be made to work.
The world dollar hegemony is based on the resource base of North America.
Our consumer society depends on a wage slave labor force controlled by dollars.
Globalism is based on our resource base. We also provide Globalisms mercenary army that controls the current template, for the most part.
Witness Iraq, and the capture and control of oil.
The Euro in its way is a pale and impotent tool. The European resource base is dependent on the U.S. for food and raw materials. Also Russia supplies much energy to them currently.
With approx. 52% of the worlds resource base, North America, and in particular the U.S., runs a large portion of the world, but can survive on its own, very well, without being a tool of Globalism, or using a Price System.
The current world system is totally dependent on Globalism/Corporatacracy to function.
When Globalism does collapse, and it is going to, then a day of reckoning comes also for areas that are poor in resources and over populated.
Russia with approx. 32% of the world resource base will survive, because of their resource base and technology, and scientific community.
The far Asian countries with something like 7% or less of world resources, are doomed with their population (that includes China, Indonesia etc.).
That is a pity. Seriously, its sad what is going to happen.
It makes no difference, if the U.S. pays or does not pay its debt. We still have the resources, and resources are what counts. We can tell the world to take a hike at any point. That may happen. A new system must start somewhere, however if THIS system can not rule, it may ruin...
A piece of paper means one thing when you put a five on it and another when you add a zero to that five. In other words only in a Price System that uses debt tokens, are those paper markings serious issues. Nothing real is measured with money.
Since no real choice in regard to resources is made correctly in a Price System, the system dooms itself in time.
The debt was never meant to be paid.
In a Price System the whole idea is to spend someone else`s 'money'.
The Price System is designed primarily to control people.
Concepts like Democracy are used in effect as a civil contract to control and manipulate others.
So what is going to happen ?
Globalism will collapse in any number of ways.
The earth will have to reconcile itself to the fact that we would need 6 or 7 earths to maintain our crazy level of resource destruction and environmental destruction.
A whole lot of people are going to die in a fairly short time.
There will most likely be a civil war in the U.S. - It is hoped that our military will get rid of our criminal/political thug society that runs the U.S. now.
Our society with its incredible dependence on mechanical energy can not survive a disruption in oil currently. If that happens it sets off an exponential domino that takes out the Price System economy. Any number of other causes of a collapse are possible.
Then it will have to be decided what we do next. With any luck that time of emergency will not last long and we will change systems.
The original FEMA system, devised by Technocrats after world war two was designed to be a change over mechanism. During an emergency, rents, mortgages and utilities would have been suspended for the entire United States for a period of six months. That in effect would put us in a Technate of sorts.
Our current Political system, both 'sides', removed FEMA a few years ago from that role.
Now, in a collapse, our system is controlled by the 'president' and congress instead of a FEMA director, and FEMA for that purpose, was placed in HOMELAND DEFENSE.
It was a stand alone agency before.
The old FEMA 'pulled the plug' on our Political system, and was designed to do that, as said, by Technocrats.
This change of FEMA has been done on purpose to ensure our system remains under the current political control.
Many people are aware of this dynamic.
This is the setup for a civil war. Who is going to protect the American people under the current Price System leadership ? Again the most likely candidate is the military.
It is thought that once people here had a taste of a different system, we would not go back to our antique Adam Smith or Marxian glorification of labor system.
The system will keep itself going as long as it can. It then will try to control a collapse by every means available.
http://docs.google.com/Doc?id=dfx7rfr2_70cmz88f
I am the Price System - essay. Technocracy Incorporated.
It is thought that an opportunity to remove our Political system which is currently controlled by Globalism and Political dissemblers is possible, a Technate being a form of functional governance, and the next most probable system, if survival is looked to.
It can be said that the variety of special interest groups that cooperate and control the societal template actually hate each other also, because of the differing belief systems they advocate, but at the same time they cooperate currently to maintain control.
That means that things are going to get very ugly during a societal collapse.
The caste/class, money system is a social control mechanism and always has been.
If we stick with it we will kill everyone and then ourselves. http://docs.google.com/Doc?docid=dfx...09m3xbv3&hl=en
Technocracy and Price System Politics.
From the standpoint of a capitalist, it would be hard to say which would be preferable: hyperinflation or defaulting. Both would wreak economic chaos I would think.
As far as what would happen to tangible foreign-owned assets, I'm not sure. Even during the depression, when there was great economic suckiness, private property rights were still strongly enforced. See, the US has such a strong history and ideology of enforcing property rights that, in my view, it would take a huge economic crisis, one much greater than the great depression, for US society to suddenly break it's love affair with property rights. Thus, barring such a huge event, I imagine foreign owned assets were remain foreign owned.
Thankfully somebody created this wiki article:
http://en.wikipedia.org/wiki/Global_debt
Assuming that GDP is an accurate measure of national income (which it isn't), what does a debt-to-income/earnings ratio of 2.5 say about the global capitalist system (even though this is merely an average figure)?
"A new centrist project does not have to repeat these mistakes. Nobody in this topic is advocating a carbon copy of the Second International (which again was only partly centrist)." (Tjis, class-struggle anarchist)
"A centrist strategy is based on patience, and building a movement or party or party-movement through deploying various instruments, which I think should include: workplace organising, housing struggles [...] and social services [...] and a range of other activities such as sports and culture. These are recruitment and retention tools that allow for a platform for political education." (Tim Cornelis, left-communist)
