Will Faster GDP Growth End the Debt Debate?

Time is so reassured. There will be no deficit problem at all. Full speed ahead. Give more benefits, raise taxes and increase regulation. There is no problem. Time is now irrelevant as a source of information. it is running out of liberal fools to buy it.

Stephen says, “Faster GDP growth boosts tax revenues for the government because individuals and companies produce more income, and therefore, hopefully, pay more to Uncle Sam.”

Sorry Stephen, but in a Monetarily Sovereign government taxes do not pay for spending. Even if federal taxes were zero, this would not affect by even one penny, the federal government’s ability to spend. There is no relationship between taxes and federal spending ability.

(Not the same for the states and cities, which are monetarily non-sovereign, and so do rely on taxes for spending. One should know then difference.)

Also, Stephen says, “And the conclusion by many is that President Obama’s proposed budget, which lowers the amount of debt we are set to take on in the next decade by $1 trillion, doesn’t cut enough.”

There is an much simpler way to reduce — even to eliminate — the federal debt: Stop creating T-securities. Contrary to popular wisdom, the federal debt is not the total of federal deficits; it’s the total of outstanding T-securities.

Since a Monetarily Sovereign government has the unlimited ability to create its own sovereign money, there never is any need to borrow the money it previously created. T-securities could be eliminated tomorrow, and this would not affect the federal government’s ability to spend. Federal borrowing is a relic of the gold standard days.

I urge Stephen, and all economic writers, to familiarize themselves with Monetary Sovereignty, so you can educate your readers.

Rodger Malcolm Mitchell

Mr. Stephen Gandel, you are dreaming in a rosy Pollyanna world in cloud 29. You really should come back down to Earth, wake up, give your thick head a good shake, smell the coffee smarten up and get on the ball. This article of yours is nothing but a total bunch of preposterous nonsense. Your article is full of hypothetical ifs and more ifs of rosy scenarios and such spin will not cut it in the real world. Yes, you need to be corrected big time.

You wrote above : quote > On our current path, the next ten years of budget deficits are supposed to add around $7 billion to our national debt, which would grow to nearly $18 billion. (Please Note: I am just talking about debt held by public, not our total debt, which includes Social Security and other transfers.) < unquote.

Now are you kidding us? How stupid do you think we are? You are truly mistaken, the CBO included the present Medicare and Social Security obligations in the yearly budget deficit of $1.5 trillion but excluded the near future liabilities: The truth of the matter here is that the real per year public deficit without the added Social Security and Medicare near future liabilities is not $7 billion per year but $ 1.5 trillion. The accumulated national debt is not $18 billion but right now it stands at $14 trillion and rising by over 1.5 trillion a year. Now if you add to this the near future Social Security and Medicare liabilities, the national debt jumps to over $30 trillion by the year 2025. This the reality Mr. Gandel, so please stop fooling yourself with rosy Pollyanna dreams, at least be man enough and have the guts to face reality and see it as it really is…but unfortunately you do not have the guts and courage to do that so like a good liberal you just bury your head in the mud and try to convince yourself with unreal panthom fantasies to ease up your pain.

I just can't believe how Time Magazine journalistic standards of objectivity, impartiality and truth have gone down the drain….now Time is nothing but a political partisan forum for leftist columnists like you who insist on writing nonsense trying to convince us that our national debt and out of control spending are not a problem if if if if if if if if if if if if if if if if somehow there were a bit of economic growth which in reality by most sober assessments will not be realized when you take into full consideration that not only the federal government but 47 of all the states are all deep in debt at the verge of bankrupcy along with their municipalities and counties. In reality, from here on, the economy can only get worse, not better.

Just go and read this two recently published books by sober real independent non partisan economists like Martin Weiss ( The Ultimate Money Guide for Bubbles, Busts, Recession and Depression) and Claus Vogt (The Global Debt Trap) so find out for yourself what they have to say about this before you write more nonsense here.

For those who do not understand or agree with Rodger Malcolm Mitchell’s arguments about the US being a sovereign nation with full authority to issue currency, please read the case of Julliard v. Greenman. Where in an 8-1 decision, resting largely on prior court cases, the power of making the notes of the United States a legal tender currency in payment of private debts, the Supreme Court found that the authority to issue a nation’s money was inherent in that nation’s sovereignty and need not be enumerated in the Constitution.

Turning now to the currency problems faced by states, although states cannot issue their own brand of currency, they can issue all the money they need by simply chartering and operating their own banks. State-owned banks can create money using the same fractional reserve mechanism used by privately owned commercial banks. Any state can charter its own bank, hiring professional bankers to organize and run the day to day operations, creating initial reserve capital by depositing all state revenue in their own accounts, encouraging state employees to do their banking business with the state’s bank, paying profits to the state treasury as revenue, and offering the public a government banking option. Many citizens would choose to do business with a state-owned bank, with their interest payment on loans and mortgages helping to finance public services. People would pay the same amount of interest and taxes, but they would receive greater public benefits. For example, if someone with a modist house paid $2,500 in real estates taxes and had a new thirty-year mortgage with annual interest payments of $7,500, the government would receive $10,000 in revenue, a 400% increase in revenue with no increased cost to the home owner. If a sizable number of citizens choose to do business with the state banks, states would quickly be in great financial shape.

I agree that I am looking at the rosy scenario, but you are giving us the most pessimistic scenario. I don’t think either of us are wrong. But I think what you are talking about is the scenario that everyone is taking as a given. What I am saying is that there is this other scenario that I don’t think many people are considering that is just as likely, one in which slightly higher than expected growth renders all of this talk about the need for steep budget cuts moot. I have the chart to back up this math and will post it next week. The point that growth affects futures deficits, I don’t think can be called wrong, or silly.

ps5 (may I use your nickname?)

I believe you are correct, but the states’ ability to create money would be limited by their banks’ ability to lend. In contrast, the federal government’s ability to create money is unlimited.

So there really is no reason for the states to go through the banking process, if only we could convince the federal government to support the states.

Oh, just a minor detail. Fractional reserve lending actually doesn’t exist. More properly, it would be called “fractional-capital” lending. The Fed gives banks all the reserves they want, but bank lending is restricted by bank capital.

Rodger Malcolm Mitchell

It’s useless to argue about Mr. Gandel’s data, when the basic premise is wrong. He said, ” . . .slightly higher than expected growth renders all of this talk about the need for steep budget cuts moot.”

GDP growth has absolutely no relationship to the supposed need to cut budgets. Even if GDP were zero, the federal government still could spend unlimited trillions of dollars, and never need to cut its budget.

Arguing about Mr. Gandel’s figures is like arguing about how many miles a ship can sail before it falls off the edge of the world.

Anyone not understanding Monetary Sovereignty, does not understand economics. Monetary Sovereignty is to economics as arithmetic is to algebra.

Rodger Malcolm Mitchell

Our goal should be to pay down our national debt not just to have a balanced budget. Even if by some miracle of growth and cuts we could balance the national budget it isn’t quite time to say we don’t have to worry about budget cuts and the deficit. We still have a huge national debt hanging over our heads. It reminds me of a person who has maxed out their credit cards celebrating because they got a raise and can now make thier monthly minimum payment. Great but you really need to pay off the principal to get out of trouble.

RMM: Was Weimar Germany monetarily sovereign?

The German situation was unlike anything that exists today. Unfortunately, there is confusion by people who have heard of hyperinflations in Germany, Brazil, Zimbabwe, Italy, China et al, and lump them all into a “printed-too-much-money” causative box. But, each hyperinflation had its own unique circumstances.

As you can see, despite having trillion dollar deficits, the U.S. is nowhere near hyperinflation — not even near inflation — and in fact, since we went off the gold standard, there has been no relationship between Inflation and Deficits.

I know this is contrary to popular intuition, but then, much of economics is contrary to popular intuition.

Rodger Malcolm Mitchell

tshore,

You are confusing personal financing with federal financing. If you or I (or the states, counties, cities or businesses) has more debt than income, we can go bankrupt. The reason: We are not Monetarily Sovereign. The federal government is.

The national debt that is “hanging over our heads” easily could be paid tomorrow. The federal government merely could credit the bank accounts of all those holding T-securities. For instance, what if China said, “We want the $800 billion we lent you, now.” The federal government simply would debit China’s T-bill account $800 billion and credit China’s checking account the same $800 billion. That would require nothing more than a couple of computer keystrokes. That is how Monetarily Sovereign nations operate.

While debt is a burden to monetarily non-sovereign entities like you and me, it is no problem to a Monetarily Sovereign nation, which created the money in the first place. This is why I urge everyone (including Mr. Gandel) to become familiar with Monetary Sovereignty, so they understand why it is completely unlike personal financing.

Additionally, the federal government supplies the economy with money by running deficits. Without deficits, there would be no federal currency. Every depression and nearly every recession, has been caused by a reduction in federal deficit growth.

Rodger Malcolm Mitchell

Raising taxes actually WOULD help solve the problem…

Indeed, the high-priced lobbyists and campaign donations have suceeded in shifting the tax burden from corporations and the rich to middle and lower income Americans. Scientific American wrote about the problem:

http://prosperityforthepeople.typepad.com/blog/2011/02/undercutting-fairness.html

Gamesmith94134: Will Faster GDP Growth End the Debt Debate?

The US central bank thinks the GDP could rise as fast as 3.9% this year? Tell me more after April.
Here are some serious rebates on the solution to the deficit and budget, including faster GDP growth to Monetary Sovereignty. I assume they are correct mathematically and theoretically. However, by matching them with inflation figures can be helpful to GDP in the sure win on the balance sheet. With our ten percent inflation for the next five year can wipe out deficit or printing 30 trillion can balance it out too. Not bad for a CPA or CFP, but, is it really true? We cannot double or increase the GDP to generate income for our government; the problem is how it works? It was the matter of expenditure that put our economy to a halt because income and expenditure relatively grown on same environment we created.
I am not going to argue the value of the dollar in the half full and half empty, or the theoretic mode which is how we substantiate a viable environment for business growth and stability of our society. Do not forget the data we have to the evaluation to Egypt, the growth on GDP and income ranking; we omitted the 40% of the population living on $2 a daily. We are still trying to figure out how its people survive. And, they live. So, mathematics is not the pure solution on calculation how well is our business growth and stability of our society. In the 80s, our government compensates the poor and business with subsidies, medical, and housing; so America government eased the tensions of the disgruntled. It created the budget is so big; we can no longer finance our government with a balanced budget. So, can GDP out grow deficit is a question?
Perhaps I would like to irony that Mr. Bernanke suggest on the imbalance between nations.” Mr. Bernanke called on countries that export more than they import to allow their currencies to reflect its overall economic performance, and urged those with large trade deficits to increase their savings and put their fiscal policies on more sustainable path. “He unintended flood the emerging nations with our less than 1% interest savings to venture on the emerging nations and commodity markets. QEII took off 10% off the dollar or raise 5% to Renminbi, and with the hyperbole of the ETF investment in America is irrelevant. I warned him on the short-term interest rate may create the out- flow and long –term investment in America could not rebuild our economy with short on credit, in contrast, China capped with inflation it boosted the interest rates, and the rise on the long-term bond and the QE III is irrelevant to the near solution on the imbalance between nations too.
I also would remind Mr. Mitchell that monetary sovereignty in printing money worked in Japan because most bonds were self financed. Eventually, it stopped the foreign investment and cut the cash flow after the yen went 300 to 100. It became #3 in the ranking. America may follow if QE III and VI apply. Pimco, China and others cut their holding on the bonds. So, America can finance itself. If American can shave off imports and its cash flow, we can be all millionaires. Why worry?
I find Mr. ps56penn62pr64 speaks well on the State-owned Banking is encouraging.
“Any state can charter its own bank, hiring professional bankers to organize and run the day to day operations, creating initial reserve capital by depositing all state revenue in their own accounts, encouraging state employees to do their banking business with the state’s bank, paying profits to the state treasury as revenue, and offering the public a government banking option. Many citizens would choose to do business with a state-owned bank, with their interest payment on loans and mortgages helping to finance public services. People would pay the same amount of interest and taxes, but they would receive greater public benefits.”
Perhaps, it is time to cut off the bail-out on the banking if we learn our lesson on the S&L. More legislatures must apply on the scrutiny of its operations; instead of, banker gives bonus to banker may not be sealed deal, partying with prominent figures with bigger deals can be calculated at a cost; and no account is unknown to our government or IRS. It may give our banking a push on the transparency and efficiency to our industry if we can truly execute it rather than create another soccer ball that our politicians can knick around. It was how we get screwed in the S&L. Perspectively,we must really commit to it.
May the Buddha bless you?

ps56penn62pr64, you are totally wrong in your assertion..in fact the states cannot issue money through their own chartered banks because states are not monetary sovereign therefore it doesn’t matter how much fancy funny accounting they do….only a chicken can make eggs, not you nor I. Rodger Malcolm Mitchell is absolutely right when he wrote above : quote > ” the states ability to create money would be limited by their banks ability to lend. In contrast, the federal government’s ability to create money is unlimited.” He is also right when he wrote you : quote > “Fractional reserve lending actually doesn’t exist. More properly, it would be called “fractional-capital” lending. The Fed gives banks all the reserves they want, but bank lending is restricted by bank capital.”

So forget about your ridiculous preposterous plan, its never going to work. What you should be writing here is pleading to the Obama regime, Congress and the Fed to start bailing out the states and pay their debts, including counties and municipal debts.

The only monetary sovereign here is “Helicopter” Ben Bernanke’ s Fed through the US Government and only they have the power and ability to create money out of nothing. Whether there are nefarious pernicious harmful consequences for both for the USA dollar and its still present standing as the world’s reserve currency as a result of the Fed’s unlimited money printing, that is another matter that I have to discuss with Rodger Malcolm Mitchell.

Wow! And Time actually pays you for your opinion…amazing.

You say, “Why does GDP matter to the debt equation? Faster GDP growth boosts tax revenues for the government because individuals and companies produce more income, and therefore, hopefully, pay more to Uncle Sam.”

First, when considering the GPD equation, the term Government Purchases (G) is the only term that will be “boosted” in the foreseeable future; however, for obvious reasons, I don’t expect it will solve the debt problem as you hope. Likewise, I don’t believe it will generate wealth, produce more income, or increase tax revenues.

Remember, the government does not create wealth or produce income; it only receives money, through taxation, from its citizens in the form of receipts. Equally, the government doesn’t refer to its receipts as neither income nor revenue for that reason.

Second, let’s talk numbers.

If you take the term G out of the GDP equation, one can accurately measure the private sector’s ability to generate wealth. When done so, the debt surpassed GDP in 2009, and that hasn’t happened since WWII. In comparison, the GDP less government purchases was $11.4 billion, and the debt was $12.1 billion (both chained to 2010).

As I’m sure you are aware, the OMB has released the FY 2011 budget proposal. In it, the administration itself claims the debt is currently 93.2% of GDP, and it’s forecasted to eclipse GDP next year — 102.6%. Moreover, by 2013, the debt will be 106.0% of GDP. Now, that assumes that there will be a boom in employment, which there won’t be. And, that our credit rating won’t be increased, which it will be (this will balloon our debt interest payments, which will make it the single largest function category in the federal budget).

Additionally, again, if you eliminate the term G, the current GDP less government purchases is reported at $11.8 trillion; whereas, the debt is at $14 trillion — a deficit of $(2.2) trillion. Hence, the debt has already eclipsed the private sector’s ability to generate wealth. Put another way, the debt is 119% of GDP less government purchases.

Third, when it comes to reporting the debt, the CBO, that’s Congress of course (the ones who love to spend our money), live in a fantasy world. It’s the only government reporting entity that reports the debt as you’ve described in your article. The OMB, GPO, BEA and Treasury all agree and report it as I’ve described it.

Lastly, although the CBO, run by Congress, reports the debt as you’ve descibed, Congress does report it agreement with OMB, GPO, BEA and Treasury annually in its concurrent budget resolution.

Rodger, you are correct. However, if we did so, would any other nation state ever lend us another dime?

I’m sure you’re aware that of our $14 trillion dollar debt, $11.6 trillion is held by foreign nations. Although your proposed practice, policy will work for paying off just $2.4 trillion, do you think those other nation states will accept your practice, policy of just printing money to pay them back. I think you need to realize that it’s a little bit more complicated than just printing money. Don’t you think?

Mr. Rodger Malcolm Mitchell, nobody is arguing with you about the Fed’s power and ability to print money until the cows come home. That is a plain fact that the US Fed as a monetary sovereign can print money indefinitely. Just like “Helicopter” Ben Bernanke can and is free to crash and explode his rotary wing aircraft loaded with freshly minted fiat dollars against a cliff he he chooses do to it with him in it.

Now the question you should be asking yourself is: “Do I feel lucky ??? Why the heck doesn’t the Fed follow my advice and just keep printing money until all the US foreign, states, municipal and counties debt is all paid for? After all, Ben Bernanke could do this tomorrow if he wishes, heck, with a couple strokes of his computer keys he could pay off all this accumulated debts immediately.” Mr. Rodger M. Mitchell, you are absolutely right when you wrote above – quote > ” What if China said, “We want the $800 billion we lent you, now. The federal government simply would debit China’s T-bill account $800 billion and credit China’s checking account the same $800 billion. That would require nothing more than a couple of computer keystrokes. That is how Monetarily Sovereign nations operate.” < unquote –

Unfortunately Mr. Mitchell what you fail to realize is if China demanded all its money back, the US dollar would no longer be the world's reserve currency and would become worthless. You correctly mentioned that the the situation in Germany's Weimar Republic in the 1920's was completely different from the USA today, as well as the hyperinflation in Argentina Lebanon and Brazil during the seventies and Zimbabwe today. You are right. The USA so far has been able to double its money supply in less than two years and keeps on increasing it to this minute with so far no nefarious consequences. So why do you think that is ??
Why would Germany's Weimar Republic, Brazil, Argentina, Zimbabwe all suffered the nefarious catastrophic consequences of their unlimited money printing with hyperinflation of more than 1000% and the USA is doing exactly the same very thing but so far has gotten away with it ??

I'll tell you why. Because the US dollar is still the world's reserve currency and as such has a big unique advantage over all the other currencies. All this other nations who printed unlimited amounts of money didn't have the advantage that the USA does, their currencies were no world reserve currencies, therefore their currencies ended up crashing with hyperinflation of more than 1000% year. So what's really happening here is that the USA is playing a very dangerous game of Russian roulette: It is defying the laws of money supply versus a stable currency because its betting on its dollar being the world reserve currency just like the suicide player in Russian Roulette with the revolver to his head is betting that the chamber that fires is empty. If he looses his bet and hits a loaded chamber when he pulls the trigger he is dead, game over.

Likewise, the Fed is playing the very same extremely dangerous game….by printing money like crazy betting on the dollar unique privileged position as the world's reserve currency to maintain its intrinsic value. But, just like the British pound in the past who also was the world's reserve currency during the 18th and 19th century the US dollar will no longer be the world reserve currency in the near future. Why? Because the Fed policies of excessive money printing and zero interest rates in the last two years is finally causing big inflation in the world as well as in the US. as a result the value of the US dollar is being gutted against other major international currencies.

Thus it is only a matter of time that the world gets fed up with the US dollar, China and all the other lenders are not going to keep quiet much longer as they see the value of their investments in dollars diminish by the day as the US dollar loses value … China and the other lenders will pull their money out and will change their investments to other non dollar currency perhaps even a brand new world single currency. When that happens, that new currency will become the world's reserve currency substituting the US dollar. Once the US dollar loses its unique advantage and status as the worlds reserve currency, it will crash and sink fastest that the Titanic, in fact becoming worthless, because the hard reality is that no nation can more than double its money supply in less than two years and get away with it once it no longer has the ace card as the world's reserve currency.

Then you will be paying $500.00 for a loaf of bread Mr. Rodger Malcolm Mtichell….then you will finally realize your darn preposterous ridiculous absurd folly of unlimited money printing as the salvation to all our debt problems and supposedly ensuing prosperity…. I will keep on telling you here in this blog every day: The day of reckoning is coming faster than you think….don't believe me? Heck, China and the others are already having secret meetings without the US being invited about replacing the dollar as the word's reserve currency.

Britain, just like you Mr. Rodger Malcolm Mitchell also presumptuously arrogantly and pretentiously assumed that their glorious pound would forever be the world's reserve currency…..but the British Central Bank and Government insisted on devaluating the pound in order to boost exports and employment until world investors who all held British pounds got fed up and the US dollar took over ….therefore please mark my words, its only a matter of time that another major currency takes over the US dollar as the word's reserve currency.

The term “reserve currency” merely refers to a currency that other governments hold in significant quantities. No other nation’s currency is the world’s reserve currency, yet none of them have “crashed faster than the Titanic,” as you say. I’ve seen no evidence that being the world’s reserve currency prevents inflation.

The term “reserve currency” is just descriptive, and has very little economic effect.

Rodger Malcolm Mitchell

How do we pay off the national debt?

First ask why do we have a national debt when the congress has full sovereign authority to issue money. Repaying the national debt is not sufficient to create a sustainable economy and establish economic justice. The goal should be to reclaim our monetary and banking system. The government must issue all money, prohibiting all fractional reserve lending as counterfeiting, and operate the banking system as a public utility.

Only governments have the authority, power and flexibility to issue stable currency necessary to a sustainable economy. They can lend money into the economy like banks, issue and spend money directly into the economy for programs and infrastructure, fine-tune the money supply with taxes, and regulate commerce with legislation.

Our national debt is a matter of congress’s choosing to issue interest-bearing bonds rather than debt free currency when the government has a budget deficit. Some of the debt, about $5 trillion is intra governmental debt where money is shifted from one branch of government it another, as in the case of social security funds being shifted to the general operating fund. Much of the remaining $9 trillion debt is held by the banking system and the Federal Reserve and about $4 trillion by domestic and foreign investors.

The national debt is only a portion of the $55.7 trillion total debt in our economy. Since the private banking system owns much of our national debt and creates the rest of the $55.7 trillion total debt in the economy, the government must deal with the private banking system.

We already know the system is weak, poorly capitalized banks are being taken over by the FDIC on a regular basis and many others are on the verge of failure. A government audit of all banks would establish the book value of the system. Using it reclaimed monetary authority the government should buy the entire banking system at book value. Government ownership of the banking system would sharply reduce the nation debt, Since the private banks own the regional branches of the Federal Reserve system that own the central Federal Reserve that owns our debt.

Owning and operating the banking system would be a great benefit, with ownership greatly increasing government revenue as the interest on loans and mortgages flows into the treasury.

The Public portion of the debt held by investors could be paid by substituting interest-bearing bonds with government issued debt-free currency at prorated value. The action would not create inflation because bonds are a form of money that is already in play in the economy. Nor would the action diminish the value of investors’ portfolios. If a discounted bind worth $75 is replaced with $75 cash, no value has been gained or lost.

Let me repeat: Only governments have the authority, power and flexibility to issue stable currency necessary to a sustainable economy. They can lend money into the economy like banks, issue and spend money directly into the economy for programs and infrastructure, fine-tune the money supply with taxes, and regulate commerce with legislation.

94134gamesmith: Are capital controls good for the world economy?

IMF Managing Director Dominique Strauss-Kahn want capital to flow toward emerging markets. Countries have a number of policy options in their toolkits… and sometimes capital controls…….there is no one-size-fits-all solution…Again, we should always be pragmatic.
World Factbook 2010 shows Japan’s Debt/GDP at 189%….that Debt/GDP ratio should force a terrible inflation on Japan, Debt/GDP ratio for the U.S. as 53% (More recent data from the Treasury shows this to be 66%)…..and its debt should be “unsustainable.” But Japan is battling deflation, and seems to have so little difficulty “sustaining” its debt it will spend an additional $63 billion. See the disconnect?
Just so we understand, tax increases will “deepen the recession” (by removing money from the economy), but deficit cuts, which also will remove money from the economy, are O.K.???
http://www.rodgermitchell.com

Perhaps, when we look into the nature of monopoly that capital is used not toward emerging market; instead, in order to make it valuable, it make commodity scarce. In the more severe moment, it controls the outcome of its production and it stops production. When I read the garlic goes up, the farmer stored his harvest to wait on the next higher bid. When they saw the cotton went up, some gave up on growing cotton. Some complaint the harvest must pay a higher price in processing them, and the cost of the fertilizer were even higher since they did not purchase it earlier. Bad timing on profitability, the farmer went to play Mah-chong(gambling) rather than start growing more. It made all difficult for farmer and financier to calculate on its cost based on the bottom line. The one held on more capital bid higher, and the commodity accommodate on the scarcity/value rule.
Long before the monopoly began, we only saw the white knight and black knight who took advantages on efficiency to occupy corporations and dismantle them for profits. Now, capitalists and opportunists took role of the gatekeeper to these emerging markets and participated in their games as scalawags and Carpetbagger in the emerging markets; and, they corrupted themselves with the efficiency and knowledge in safeguarding the resources like the gatekeeper or money manager. At present, their successes in manipulating the scarcity of each commodity through the hedge funds or bankers; now, more pensions are involved, its assets are much bigger than sovereignty. It even controls many nations that are short on cash; and many nations joined in the games as well.
As the qualitative Easing performed, more of hot cash are being emerged into these hedge funds. They controlled all stages of production or manufacturing; and they dominated most commodities with their highest bid; all prices are inflated because the lower values on currencies that qualitative easing made available.
There must be a reserved system to all nations like IMF who can take the need on reverse the cash flow or lowering the bidding on the commodities from being dominated or captured. This is because these scalawags and carpetbaggers are not flowing toward the emerging market; they were the gatekeeper to the resources that cut production and created inflation.
IMF must think fast how to persuade every nation that cash do not act; and it is how the owner of it behaves. We are on the wrong side of the argument; it is value not price. What is behind the numbers? It is the value of all things including currencies.
AT present, we are paying the cost of the monopoly soon as the inflation kicks in; more of our productivity will halt after inflation takes effects. Deterioration to our economy will become permanent if we accept the practice of monopoly as the only way out. I am sure that our children will pay its price
May the Buddha bless you?

“the GDP less government purchases was $11.4 billion, and the debt was $12.1 billion (both chained to 2010).”

Oops, I meant trillion, not billion.

Mr. Gandel is correct the economy will grow.
We may never return to the heady days of the real estate bubble and full employment but it will be a steady march to growth.
And cutting back on programs could very well bring on Egyptian style protests here as inflation eats up income for those on fixed income.
Yes we need to cut spending but not on those least able to afford it.
Congress should make a nice jesture and cut their own pay and benifits, share the pain.
The right has always hated Social Security and now they smell blood, their driving a wedge between the generations. Many young people now belive SS will not be there for them thanks to the rights constant babble about it.
Has there been any constuctive dialog on fixing SS and improving it? Only reducing benifits and raising age limits. Nobody saying if we raise contribution percents we could improve it. No they actually reduced deductions for the year to futher drive the wedge.
In a boom economy with full employment and decent wages many would never save for retirement its human nature. So how in an economy where even future prospects are a shadow of yesterdays will people be able to save?
Cutting down on these programs is like living in la la land they have no concept of the repurcussions that will result.
But hey lets have at it, the quicker we hit the wall the quicker we reorganize.