US Financial Crisis

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ok the public debt is 10$ trillion
but the soo called graphs which show 48-53$trillion is the gross debt which includes liabilities.

So you agree that whenever US debt is mentioned, that, its the $10 trillion figure that's to be used rather than the higher one ?

[warthog]

yeah 10$ trillion is factual and scientific but blrp why do some peeps use the 50$trillion?

[blr_p]

That's the question i want you to answer

Why the $10 is to be considered and not the $50.

Look at what was said over Martenson's movie.

[warthog]

thank god now you are happy with me.I dont like when you go mad cuz it hurts our thread.
psi will neded to redl the movie as i del it)
anyways did you check this guy rahul metha's proposals

one thing i always wondered how the hell you will get loans from a full reserve banking.I talked to him and i asked this question.First of all he says that the central banks dont create interest and the only way to pay your loan with interest is from the total money supply or M3 so bankrupticies are built in.Aslo he said that the tax we pay is used mostly to pay the debt which the RBI charges fro printing our money.(you can debate with him,he is very knowleldgeble)

he said that whenever you want to get a loan the govt would print money and when you have repaid the loan the money would be removed fro the money supply.He as other wacky proposals but its good to know that someone from india is doing sometinhg and not like guys like me who post on forums which doesnt help

[blr_p]

thank god now you are happy with me.

Umm, i think you have not understood what i meant.

you still have not answered why the $10trill in debt is to be considered in place of the $50 trill figure?

You don't have to dl martneson's movie, just read the transcript for that chapter on his site. But he uses the $50 trill figure, then read what my comments re:that subject are.

Then do some research on US debt.

I'm asking you to verify that the $10 trill is the right figure (give the reasons) to use for national debt..

Then give me your answer.

[warthog]

its verified that the national debt is 10 trillion $ http://en.wikipedia.org/wiki/United_States_public_debt

from wiki
is important to note the difference between the fiscal terms gross debt and public debt. In brief, the public debt is the gross debt less the amount the government owes itself. The figure below shows the trend in public debt with the background colored by the party controlling the executive.

so its only public debt.What about external debt?
http://mwhodges.home.att.net/nat-debt/debt-nat.htm

just watched it, the 48 trillion is the ratio btw debt and income but chris says that debt is not bad but too much is.Its self liquidation vs non liquidation debt.
http://www.chrismartenson.com/crashc...hapter-12-debt
why he is advocating the 50 trillion to be used than the public debt?

but why so much debt?From my understanding it is cuz the govt borrows from the fed to print their money and the interest adds up slowly year by year.,the debt could be zero if the govt printed its own money and paid the debts

here is a interesting quote by rahul metha

MRCM Party - Brief descriptions of first seven changes
Government Debt

Does a father have right to make promises on behalf of his son? Or should a father be allowed to create debt for his son? Or rather, does a father have right to sell his son into slavery? If not, government has no rights to do debts. A person’s debt dies with him. A private company’s debt dies with death of the company or its owners and a public company’s debt is NOT shareholder’s liability and does not go to next generation. But the government debt, which is created by officers appointed by TODAY’S individuals, gets carried on the next generation, with huge interest. The government debt is essentially a mechanism by which RBI-heads and owners/controllers of scheduled banks are converting the Indians into their slaves. The internal debt can still be wiped off by inflating the currencies. But what about external debt? Any Finance Minister with even 1% morality would have hesitated in creating debt is foreign currency. Essentially what Manmohan Singh (and other Finance Ministers) have done is told American Bankers’ following “Give me X billion dollars and ours sons will repay. If not, they will be your slaves.” If one has slightest sense of morality, he would reject the concept of government creating debt. We at MRCM Party has enact a law that would enable citizens to imprison an officer who takes external or even internal debt and thus put an end to Govt Debt.



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atleast we have someone here in India who knows!!

[blr_p]

its verified that the national debt is 10 trillion $ http://en.wikipedia.org/wiki/United_States_public_debt

Public or national debt is $10 trillion (current). This is what the govt. owes.

so its only public debt.What about external debt?

External debt is defined as the total public and private debt owed to nonresidents repayable in foreign currency, goods, or services. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.

The Treasury shows it was $13.7 trillion in external debt as of end June 2008.

The public or govt, part here is only $2.7 trillion, rest is held by fed, banks & other sectors.

just watched it, the 48 trillion is the ratio btw debt and income.
http://www.chrismartenson.com/crashc...hapter-12-debt
why he is advocating the 50 trillion to be used than the public debt?

I have been digging around to understand better why he uses that figure. To do so we must differentiate between public & private debt. As this article explains its the private sector debt that has shot up much more than public debt over the last cpl of decades

So i started looking for the sources of the graphs mentioned in that article and came upon the fed's Flow of Funds Accounts. The full report is here, latest at this time is Q3 for 2008. On page 2 we see

At the end of the third quarter of 2008, ie Jun 30 2008, the level of domestic nonfinancial debt outstanding was $33.0 trillion; household debt was $13.9 trillion, nonfinancial business debt was $11.0 trillion, and total government debt was $8.1 trillion.

So if we add 33 + 13.7 = $46.7 trillion (as of Jun 30 2008) for TOTAL debt.

Is TOTAL debt the correct figure to use ?...that is the question

If we consider TOTAL public debt as of (Jun 30 2008) it was

8.1 + 2.7 = $10.8 trillion

This figure the govt. can tax the public to repay debt.

The rest is either corporate or individual debt ie it is private debt. If your neighbour falls into debt and loses his home you are not affected. Maybe your property price might be affected but you are not liable in any way for his loan is my point.

This is why feel, the TOTAL figure quoted by beck, martenson & hodges is *not* the correct figure to use. You will never see a TOTAL figure for debt in any reputed publication, these guys have just pulled the figures from different sources and added it all up and said this is TOTAL debt

Now if corporates fail then govt has to assume the debt which means the public become liable. I can't show more recent figures as the latest flow of funds report is only upto Jun 30 2008. The delay to publish the Flow of Funds report is 6 months as you can imagine the amount of work that goes into it.

having governments buy distressed assets from the banks, or provide loan guarantees, is not an effective solution. It does not reduce the volume of debt, or force recognition of losses. It merely re-denominates private sector obligations to be met by households and firms as public ones to be met by the taxpayer.

So its hard to tell how much more public debt has grown as a result of the stimulus plan & the newly acquired debt. But maybe roughly another couple of trillion or little more. That puts the figure at approximately $13 trillion as of today. Not the end of the world of course but not too good either.

but chris says that debt is not bad but too much is.Its self liquidation vs non liquidation debt

Correct, i'm not sure how much of private debt is of the self-liquidating type.

but why so much debt?

Simply because credit has always been very easy & cheap to obtain in the US. The govt. + fed want to encourage consumption as much as possible. So long as ppl go out & spend then everyone is happy. Precisely why they don't encourage saving too much. It helps to create the perception that tomorrow will not be too bad so one can always manage it.

But if a shock happens then the figure can be scary as the future is not so clear. This is where the fear mongering comes in. I was talking to a friend in the US recently and he said all everyone is doing is just 'moaning & groaning' endlessly. One person says sky is falling, another one hears it and both keep repeating it.

From my understanding it is cuz the govt borrows from the fed to print their money and the interest adds up slowly year by year.,the debt could be zero if the govt printed its own money and paid the debts

Ahh, but as you have seen the govt. or public part is only one quarter of the TOTAL debt. You forget the individuals + corporates that do the bulk of borrowing. So long as they can pay back no one is afraid. When they can't the question is how many cannot pay back. Not knowing that exact figure creates more tension. You can be fooled into thinking its much larger than the reality.

[warthog]

I understand blrp and i also understand serious drawbacks of full reserve system like how the hell an individual can take loan.SO the monetary refrom act doesnt proposes solution but this guy rahul metha has some wacky ideas like govt printing money for loan and when the loan is paid the money is removed from M3.Have you checked his site?
and can a hybrid system work?

[warthog]

and now g7 calling for new world order
G7 sets sights on new world order | Herald Sun


THE world's richest nations have called for urgent reform of global finance to save the world from the economic devastation that is dragging more and more countries into recession


tell me blrp you still dont believe that centralization wont happen but many world leaders are now openly saying that we need global reforms for the crises.It's ironic that globalization caused this and the solution they want is more globalization.

and og you supported obamas' stimulas(cough bailout) bill,just see this
[youtube]CvnwOjDjnH4[/youtube]

and this
[YOUTUBE]coRWgHdMO2Q[/YOUTUBE]

[warthog]

now thats F****** GREAT
RBI peps up mood; Re, bonds turn firm- Forex-Markets-The Economic Times


First the fed buy t bills and now RBI

looks like india will soon go down the path of USA and the rupee will be devalued soon.