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It Is Now Mathematically Impossible To Pay Off The U.S. National Debt

theeconomiccollapseblog.com

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Re: It Is Now Mathematically Impossible To Pay Off The U.S. National Debt

#11

Post by azzleandre »

I don't even know why this site is promoted here? HN, this is how you lose your readers.

You see, the truth is that the U.S. government now owes more dollars than actually exist. If the U.S. government went out today and took every single penny from every single American bank, business and taxpayer, they still would not be able to pay off the national debt. And if they did that, obviously American society would stop functioning because nobody would have any money to buy or sell anything.

The last sentence makes me laugh and stopped me from reading any further. The only thing thats obvious here is that the author hasn't any clue about economics.

It's not good to have debt above 100% of GDP, sure. It means that working that debt off takes more than 100% of GDP. So it takes more time or/and more effort to get rid of it.

That article is bs. The purpose of this article should be clear by looking at the pages it links to: Emergency Food, Home Security, Alternative 'more secure' investments... come on HN! #2 on the front page? really???

Re: It Is Now Mathematically Impossible To Pay Off The U.S. National Debt

#12

Post by nopassrecover »

lkozma wrote: post #10

My limited understanding is that national debt is not supposed to be paid off, actually attempting to do that is often a catastrophic move. If the interest is paid year to year, exponential growth of the economy takes care of things eventually. WW2 debt for example would be peanuts in today's money, so it's not really important if it was actually paid off or not. How long exponential growth is sustainable, and how is…

Except the WW2 debt was paid in 1945 dollars which are worth a hell of a lot more than 2010 dollars. If you imagine the loans as being in gold (and this might be a bad example because I don't know how gold has inflated) then they still have to return that amount of gold.

Re: It Is Now Mathematically Impossible To Pay Off The U.S. National Debt

#13

Post by spooneybarger »

The site is a thin veneer over an attempt to use people's panic to get them to buy:

gold coins: http://theeconomiccollapseblog.com/gold-coins silver coins: http://theeconomiccollapseblog.com/silver-coins emergency food: http://theeconomiccollapseblog.com/emergency-food water filters: http://theeconomiccollapseblog.com/water-filters alternative energy 'sources': http://theeconomiccollapseblog.com/alternative-energy home 'security': http://theeconomiccollapseblog.com/home-security personal 'security': http://theeconomiccollapseblog.com/personal-security

and truely wtf...

macbooks: http://theeconomiccollapseblog.com/macbooks and netbooks: http://theeconomiccollapseblog.com/netbooks

Re: It Is Now Mathematically Impossible To Pay Off The U.S. National Debt

#14

Post by Skriticos »

nopassrecover wrote: post #12
lkozma wrote: post #10

My limited understanding is that national debt is not supposed to be paid off, actually attempting to do that is often a catastrophic move. If the interest is paid year to year, exponential growth of the economy takes care of things eventually. WW2 debt for example would be peanuts in today's money, so it's not really important if it was actually paid off or not. How long exponential growth is sustainable, and how is…

Except the WW2 debt was paid in 1945 dollars which are worth a hell of a lot more than 2010 dollars. If you imagine the loans as being in gold (and this might be a bad example because I don't know how gold has inflated) then they still have to return that amount of gold.

In 1945, 1 troy ounce of gold was worth something in the vicinity of 35 USD.. As of today it's over 1100 USD, and going up really fast. It would have been unfortunate to have it paid back in gold.

http://www.nma.org/pdf/gold/his_gold_prices.pdf

Also some figures for what was mentioned in the article: http://mises.org/markets.asp (the last set of diagrams show the national debt figures over 60 years, useful to get an idea)

Re: It Is Now Mathematically Impossible To Pay Off The U.S. National Debt

#15

Post by lkozma »

nopassrecover wrote: post #12
lkozma wrote: post #10

My limited understanding is that national debt is not supposed to be paid off, actually attempting to do that is often a catastrophic move. If the interest is paid year to year, exponential growth of the economy takes care of things eventually. WW2 debt for example would be peanuts in today's money, so it's not really important if it was actually paid off or not. How long exponential growth is sustainable, and how is…

Except the WW2 debt was paid in 1945 dollars which are worth a hell of a lot more than 2010 dollars. If you imagine the loans as being in gold (and this might be a bad example because I don't know how gold has inflated) then they still have to return that amount of gold.

Since the debt is in dollars and not in gold, this does not matter. I never heared that national debt would be updated to reflect inflation. And I don't think WW2 debt was ever paid in any dollars. It's interest was paid in 1945 dollars, then in 1946 dollars, etc.

What you say about inflation matters only if debt is in a different currency, which was Argentina's case, but not the US.

Re: It Is Now Mathematically Impossible To Pay Off The U.S. National Debt

#16

Post by patrickgzill »

mseebach wrote: post #5

I'm nowhere near able to understand the economics behind this, but this quote sets off my BS-detector: You see, this is what the whole Federal Reserve System was designed to do. It was designed to slowly drain the massive wealth of the American people and transfer it to the elite international bankers. It is a game that is designed so that the U.S. government cannot win. As soon as they create more money by borrowing…

Certainly the conclusion is open to debate. The facts however are that the Federal Reserve is owned, not by the "people" of the USA but by some number of presumably unknown owners.

The other fact is that unlike other money systems, the USA does use a system where every Federal Reserve Note created has debt attached to it - that is why the word "note" is on the front of it - a note is a promise to pay, not the payment itself.

Under the Constitution, only gold and silver stamped into a standardized form, is "money". That is why the FRN is declared by the government to be "legal tender" - only force, enforces its continued acceptance by people inside the US.

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