What does "living within our means" mean when you are referring to government spending by the same government that issues the currency? What is the "means" in that situation? How would you know if you were living within it or not?goodasgold wrote: We can begin by living within our means and beginning to pay off our towering debt to support our credit rating. Americans are responsible for our own debt, regardless of how other nations are behaving or misbehaving.
If you look back to when the U.S. government started running consistent budget deficits in the early 1980s, the economy has performed much better than in the previous years when the government sought to "balance the books."
Even if the U.S. weren't a currency issuer (which it is), if you have the most powerful military in the history of the world with over 1,000 foreign military installations scattered all over the world, no creditor is going to shake you down for anything. Take Saudi Arabia, for example. Do you think that they would stop buying treasuries if they knew the effect would be to lose all U.S. military support in the event that they were attacked by a neighbor?And I am skeptical of assertions that the national debt is an abstraction. On a personal basis, what would happen the next time our mortgage, car or college tuition payments are due, if we assured our creditors that the debt is a mere abstraction? Bad things would happen, just as will happen the first time the U.S. government is forced to default on its debt, as Detroit and Illinois are in the process of doing, and as California and other spendthrift states will be forced to do in the future.
On another front, consider the 2011 S&P downgrade of U.S. debt. How did that go? Well, first, it caused interest rates to fall, not rise, which tells you what the market thinks about the ratings agencies, but perhaps more importantly within 18 months of the downgrade the U.S. government sued S&P for $5 billion, allegedly for ratings abuses related to the mortgage and housing market collapse, but it always seemed obvious to me that the lawsuit was the legal equivalent of a hellfire missile fired from a drone circling one of S&P's offices. After all, the U.S. government hasn't sued any of the other ratings agencies. Why not?
In a debt based monetary system, you don't run the printing presses. Most new money is created in the private credit markets. I'm surprised that more people don't understand how this works.As to the argument that the federal government can merely run the printing presses around the clock to pay our debt, the game is up when creditors finally conclude that the U.S. dollar, in terms of collapsing value, has joined the ranks of the Zimbabwe dollar or the Weimar deutschmark.
As far as Zimbabwe goes, the hyperinflation there was mostly about capital flight triggered by government confiscation of property and the government's subsequent attempts to mask the effects of their own ill-conceived racially-driven theft of private property. To compare Zimbabwe to the U.S. seems silly to me.
Is the U.S. government desperate? What would it be desperate about?And I agree that the PP is a wise investment, but our profits will last only so long as an increasingly desperate government will allow us to keep them. We still have time to insist that the government abjure its irresponsibility and get serious about retaining the confidence of the people willing to buy our funny money.
I mean this respectfully, but your points sound like they were lifted from a Bill O'Reilly rant. Basically, none of the stuff you are saying has any basis in reality, other than in the minds of a media that likes to keep people stirred up about something at all times.
Look into the matters you are discussing in more depth and you may find that the economic ideas that the mainstream media and people like Peter Schiff are spreading are simply wrong in many cases.
Gold is an important part of the PP, but for reasons that are more subtle than the "U.S. is broke" or "Dollar is about to collapse" narratives that people like to spread to sell books and keep viewers.