tag:blogger.com,1999:blog-2098432983500045934.post357535568769733614..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: Off the markThe Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-2098432983500045934.post-23573316950082756202015-06-28T18:07:35.361-04:002015-06-28T18:07:35.361-04:00Jim-
Ahh yes, the good old days, there was no way...Jim-<br /><br />Ahh yes, the good old days, there was no way that could go badly :) Generally speaking, debt is paid off by transferring your commercial bank deposits (your assets) to settle your liabilities. The Govt uses its bank deposits (Fed liabilities) to pay off its TSY liabilities. (Tsy securities).Anonymoushttps://www.blogger.com/profile/15433129947896088098noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-89767805867211216462015-06-28T17:53:45.640-04:002015-06-28T17:53:45.640-04:00Auburn wrote:
"Another way to think about thi...Auburn wrote:<br />"Another way to think about this. When people actually borrow money, they must repay this debt with their assets. Chase will not accept more of your IOUs in payment for your home mortgage"<br /><br />Apparently you aren't acquainted with some of Chase's loan products that they were offering during the housing bubble .<br />A loan where Chase will accept more IOU's as payment for a mortgage is called a negative amortization loan. <br /><br />Zero down Neg-Am loans were an important driver for house price inflation in the housing bubble as they allowed people with little money to buy and flip houses.<br /><br />jimnoreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-26662431018321077182015-06-28T11:59:07.606-04:002015-06-28T11:59:07.606-04:00Greg-
The US Govt does not and indeed cannot borr...Greg-<br /><br />The US Govt does not and indeed cannot borrow its own IOUs, just like no other economic entity can borrow its own IOUs. People borrow assets (financial primarily) and all financial assets are the liability of their issuer. <br /><br />In the case of the US Dollar and the US Govt (of which both Fed and Tsy are a part), TSY securities are US Govt IOUs (and are mostly on the Fed's balance sheet) and Reserves are US Govt IOUs and are mostly on the Fed's balance sheet (minus physical cash). So both types of accounts are IOUs of the US Govt, they are both financial liabilities of the US Govt. So it makes no sense to say the exchanging reserves for TSyies (one Govt IOU for another Govt IOU) is "borrowing" in the context that that word is used colloquially. <br /><br />Another way to think about this. When people actually borrow money, they must repay this debt with their assets. Chase will not accept more of your IOUs in payment for your home mortgage, you must deliver your financial assets to Chase. And this is how it works for every economic entity in the US Dollar economy. For the US Govt and TSY securities, the Govt is paying off its financial liabilities with its own financial liabilities. This is exactly the opposite of what the non-Federal Govt does when it borrows.<br /><br />IOW, your comment about the Govt having to acquire its own IOUs from rich people who could have only gotten their Govt IOUs from the govt in the first place in order to keep functioning is confused.Anonymoushttps://www.blogger.com/profile/15433129947896088098noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-80681376026073128902015-06-27T19:17:11.854-04:002015-06-27T19:17:11.854-04:00Hey Arthurian. Check out my post "The Standa...Hey Arthurian. Check out my post "The Standard Definition of Money is in Error." at: http://anamecon.blogspot.com/2015/06/the-standard-definition-of-money-is-in.html.<br /><br />I think it is important. But then, I could be mistaken...<br /><br />Anyway, the only reason 'the people' owe the rich so much is because the rich manipulate the government into lowering the taxes on the rich, so the government instead has to borrow from them to keep functioning. It's a scam. greghttps://www.blogger.com/profile/08201906679062960215noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-88105841586069666542015-06-27T09:14:45.940-04:002015-06-27T09:14:45.940-04:00Right Art.
If you look close enough, I think you ...Right Art.<br /><br />If you look close enough, I think you will find that what the govt is being directed by is not the average Joe six-pack but instead the very very very above average banker or corporate titan. They have bought our govt. So any complaints about what our govt is doing is ostensibly a complaint against what the CEOs of this country/world want.<br /><br />I haven't seen any of those movies but my son and daughter in law have and I know enough about the story to be intrigued. Those kind of stories are usually something I am interested in but I agree about with your critique of that mindset. Its the all-out that is wrong. I am all for people not being passive sheep/bots and taking an interest in the how and why of their social circumstances but too often in our sensationalizing culture we celebrate the guys who just blow things up. <br /><br />Not everything about our system/culture needs to go. We need to get rid of things/ideas which are counterproductive and not destroy the whole thing.<br /><br />Greghttps://www.blogger.com/profile/03139782404004492965noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-92186597191764514772015-06-27T08:12:09.175-04:002015-06-27T08:12:09.175-04:00"The biggest success of the conservative move..."The biggest success of the conservative movement was in painting the Govt as the universal bad guy/other in the 1980s."<br /><br />Agreed.<br /><br />I am particularly troubled by the direction this meme has taken lately -- for example with the "Hunger Games" movies. <a href="http://www.imdb.com/title/tt1951266/" rel="nofollow">Mockingjay Part 2</a> is listed as "Adventure, Sci-Fi" but the blurb says "Katniss Everdeen and District 13 engage in an all-out revolution against the autocratic Capitol." <br /><br />Not my kind of adventure.<br /><br />I saw the earlier movies and liked them. But the problem is that those movies encourage a mindset that favors or accepts all-out revolution in <i>our own</i> country.<br /><br />I have no problem with blaming the government for what the government has done wrong -- economic policy, I think, is fully to blame. But I have a <b>huge</b> problem when people blame the government <i>first</i> and then look for ways to undermine government or drown it in a bathtub or whatever. Without understanding what the cause of the problem really is.<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-32535106026864536162015-06-27T07:12:39.408-04:002015-06-27T07:12:39.408-04:00This is a classic example of looking at the other ...This is a classic example of looking at the other guys behavior as the problem and not yours.<br /><br />The biggest success of the conservative movement was in painting the Govt as the universal bad guy/other in the 1980s.<br /><br /> Ever since, any crisis starts with looking at what "govt" did. Greghttps://www.blogger.com/profile/03139782404004492965noreply@blogger.com