I can see we are never going to find a consensus because we are operating in different realities.
Yes. I operate in the one that exists. You’re operating in a fantasy world that doesn’t.
The government “HAS NO” tax or bond revenues because it doesn’t need them.
And yet, they sell bonds.
If you say you have a fear of inflation if taxes don’t draw down the demand (currency) in the economy then we can have that conversation
It’s not a fear. If the government doesn’t collect taxes, S&P and Moody’s drop our credit rating, and rates go up. There’s no guessing there at all.
What we should be concentrating on is rebuilding an economy that investors want to invest in.
They do invest in it, every time they invest in a corporation involved in those activities.
I think Alan Greenspan might be someone you would trust for economic advice.
To a limited extent. I’m familiar with this video. Greenspan’s roots are in the “deficits don;’t really matter” camp, which is a camp that, in the 35 year history of fiat money, have never been seriously tested by a major economy, and in that an error committed by the world largest economy could cause millions to starve, would be evil, in my view, to test.
Obviously, the US can’t run out of money. The unanswered question is how the rest of the world reacts to a US that doesn’t exercise any financial discipline, meaning that they just print up money (yes, I know they don;’t really PRINT it anymore) when they need it without regard to the value it is supposed to represent.
Greenspan assumes that the US has no accountability when it comes to the creation of money. This is CLEARLY false, as the value of the dollar and the interest rates on bonds are determined by third parties.
Let’s suppose the government decides, as you have, that the bond sales are a sham, and decides to just do away with them and have the Fed transfer money into Treasury as needed.
Now, you better prepare a PR campaign to sell the rest of the world on the plan, because although you’ve done away with what you refer to as the bond/tax sham, the value of those bills is going to be determined by the FOREX market.
If the world decides not to play? The dollar value falls like a rock. Americans essentially become “prisoners in their own country” as the cost of foreign travel rises out of reach. Foreign imports skyrocket in cost, causing domestic shortages of necessary (and if not necessary, accustomed) goods, resulting in a sense that our standard of living is crashing. The trade deficit disappears as our corporations become substantially more powerful and exports go wild; we have plenty of jobs, but again, we can’t leave the country, because our currency isn’t worth shit. And if you think corporations have too much power now, look out — you’ll be looking at Rollerball, 1975 version, where the corporations ARE the government.
I’ll pass, thanks.
Nonsense. There is zero risk in buying bonds
You don’t understand the bond market. Like stocks, bonds have a secondary market, and their prices can rise or fall. If you need capital and have to sell at a lower price, that’s risk. Prices on government bonds fluctuate. Also, bonds, being an investment which returns lower rates on return, also carry rate risk; if I buy a bond at 1% to park cash (very common during the beginning of the financial recovery), and inflation is at 2%, then net/net, my investment is losing money. There is also risk of default, but since I assume you are referring to US government bonds, we can leave that one alone. I don’t recommend bonds from Zimbabwe, however.