Thing is Government has other ways out of the problem, they could just print 10B and pay it off . inflation, or they could raise taxes, say increase the Gov tax income to 4B, then with say 12B debt , they are only at 3 times income. Thats like you on 50K having a 150K loan, dont sound too bad like that.. ??? well thats my 2 cents..
another great point! but as i see it hyperinflation is not a solution, it is a form of default by printing money. by using 'credit easing' we are cleverly defaulting on our obligations, also secretly robbing the bank accounts of citizens who save their money in dollar denominated assets. i decided not to include this point because of the time constraints (15min speech) and because i hope it comes up in the q &a portion.
The problem i see with your analasis is that you say that GDP is like the Governments income. The way i see it , this is not so. Government income is Tax revenue mostly+some other things.
So say your income is 50K, the most you should borrow is say 250K , thats 5 times your income. The US government income is, say 2.5B, so the most they should borrow is 12.5B, so my conclusion is ..they are getting close to over borrowing..
This is freaking amazing! Helped me understand so much! Should show this in schools definitely!
joobn 2 years ago
Thing is Government has other ways out of the problem, they could just print 10B and pay it off . inflation, or they could raise taxes, say increase the Gov tax income to 4B, then with say 12B debt , they are only at 3 times income. Thats like you on 50K having a 150K loan, dont sound too bad like that.. ??? well thats my 2 cents..
Nice vids, thanks for posting.
bazzmond 3 years ago
another great point! but as i see it hyperinflation is not a solution, it is a form of default by printing money. by using 'credit easing' we are cleverly defaulting on our obligations, also secretly robbing the bank accounts of citizens who save their money in dollar denominated assets. i decided not to include this point because of the time constraints (15min speech) and because i hope it comes up in the q &a portion.
kemosavvy 3 years ago
The problem i see with your analasis is that you say that GDP is like the Governments income. The way i see it , this is not so. Government income is Tax revenue mostly+some other things.
So say your income is 50K, the most you should borrow is say 250K , thats 5 times your income. The US government income is, say 2.5B, so the most they should borrow is 12.5B, so my conclusion is ..they are getting close to over borrowing..
bazzmond 3 years ago