The Biden Economic Miracle

[james03]

Biden confirmed. $500 Billion for State bailouts. California should get $100 Billion of that.

[Miriam_M]

Biden confirmed. $500 Billion for State bailouts. California should get $100 Billion of that.

A huge portion of that California bailout will go to:
Unions
Illegal immigrants
The homeless
The French Laundry <that part a joke, not the first 3 parts>

Please, God, not "reparations."  Pretty ironic, by the way, that word.  Somehow I think the Left is going to pay a very different form of reparations than the rest of us "evil" white people.

[MaximGun]

Because when it blows, pensions go to zero and Social Security stops.

It stops at thirty trillion or one hundred trillion.  When the gold is used up, whether the USA owes 29.5 or 99.5 makes no real difference.  Social security cannot be paid, we passed that point long ago.

If Yellowstone goes pop then social security stops too.  As it does with nuclear war or civil chaos.

In the wacky world we now live in, which is heading for a terrible fall, you have not explained why printing trillions more dollars is a terrible thing.

There is no way back to fiscal stability at this point, and has not been for years.  They might as well print to put off the dreaded day as long as possible.  Nobody can tell me why having a smaller unpayable debt is worse than having a larger unpayable debt.  The debt will be written off anyway since it cannot be paid.

Why is it worse to enter global communism with a larger amount of unpaid debt, when the whole world is going to shit anyway?

No empire lasts forever, they all collapse, some with debts larger than others.  The unpaid debt does not mean much relative to the suffering from the collapsed empire.

[james03]

Looks like you are talking about a high level view.  Sounds a little like accelerationism, i.e. vote for Biden.  Like I said elsewhere, I can't say they are wrong.

However, there's a difference between controlled demolition vs. catastrophic failure.  And the latter is what will happen, which is what I refer to as "go Detroit".  But Detroit didn't have control over the value of money and debt levels for the remaining 99% of the country.  So per your argument: Given, it is now politically impossible to avoid catastrophic failure, we should ......
My response is to move to fly over country after you secure employment and form local Catholic communities. 

Beyond that, we are geeking out and looking at timing.  I don't know when it blows up, and in fact it might be awhile.  And if we get The Biden Economic Recovery Plan, we should get a nice boom and bubble reflation.  But in that case you get the inflation.  Oil is in the $50's again.  What happens after Europe and the large blue States reopen after The Biden Covid Plan?

So it's important to keep an eye on things and let the market tell you what it is doing.

[Tennessean]

Somehow I think the Left is going to pay a very different form of reparations than the rest of us "evil" white people.

I don't think maranos will pay a red cent.

[MaximGun]

James, This is a Traditionalist forum.

No Traditionalist I have ever spoken to wants the status quo and steady downward spiral to continue.

All of the prophecies related to this age, and most of the stories of similar downward spirals in biblical history end with a bang, not a slow and steady recovery from a 30T dollar hole.  How could they?  How can an immoral and degenerate world raise up a generation of children who are more moral and have more self control.  Only suffering can do that.  People suffering so much that they realise their parents are wrong.

You have a declining power the USA and a rising power of Communist China who will duke it out militarily or economically for supremacy. 

The USA is running a financial pyramid scheme based on printed money and confidence and bluff.  The country is soon to be run by paranoid maniacs who delight in evil and behave in quite insane ways.  At some point the bubble bursts.  Nobody can say what other conditions accompany that bursting of the bubble, war, natural disaster, dogs and cats living together.  But whatever happens those holding the debt (foreign countries) are in trouble also.  There is almost certain to be a systemic collapse and a complete lock up of derivatives as countries will not know whom to trust and whom is solvent.

I fail to see why the size of the debt matters when one of the options is to simply write it off.  For a while America would not be credit worthy (but who would be is very hard to say).  Perhaps nobody would be credit worthy, lending would stop, in which case there is no relative disadvantage. Eventually when things stabilise there would have to be access to credit again, because there would not be an IMF who were capable of locking the USA out of the credit system.   The USA is too big.   Lenders must lend when the risk is measurable in order to make a return on their loans, otherwise they have dead money and no income.

If the USA owes China 30T and goes bankrupt and writes it off or 100T and goes bankrupt and writes it off, does China's response vary?  Perhaps it is better to owe China as much money as possible so that the CCP cannot stop their own people from rising up and killing their communist overlords when their stock market and social welfare programs completely explode. When people lose everything and they have nothing left to lose, they lose it.

Can anyone on this forum see ANY realistic possibility of a new US administration taking power in our lifetimes and responsibly paying down a debt of 30,000,000,000,000 dollars?   I cannot.  That debt will never be paid, not even in inflated US dollars.  Nobody can force the USA to do so and nobody can lock the USA out of the economic system, at least for now.  You would need a super powerful, super dominant China with advanced weapons that could do to the USA what the USA did to Iraq and Libya and that is a few decades away.

Why do the assets in the USA go to China, the farms, ports and stuff?  With a big enough collapse you would just get a tough guy taking over, kicking the Chinese out and stealing their assets and patriotic Americans would applaud him.  The Chinese can swing for it.  If they want to got to nuclear war with the USA over the assets they are welcome.

So it is in the USA's interest, as far as I can see, to have the biggest baddest collapse possible, drag everyone else down with them and then park aircraft carriers and nuclear subs wherever they are needed.  Then set up a new set of rules about how international trade is done.  What the USA needs to do is default on the debt but pay the military and their families well, so they control that power.

I am not saying this is going to happen.  I am saying that once you are past the point of no return (you know you can never pay) and are going bankrupt then you might as well pig out on debt, because for sure the Chinese can never take those goods back and deconstruct them into gold or money.  This is not moral, but it is sensible for immoral governments who are in a dominant position.

[james03]

We are either talking past each other or I am obtuse.  What is the point of disagreement?

If your point is that a detonation that takes out the globohomo marxist system is a good thing, I agree.  However there are consequences for a collapse.  Argentina went the default route.  Venezuela went the money printing route.  There is no option 3.

As far as defaulting, we owe $1 Trillion to China.  Most of the debt is held by pension funds, corporations, banks, and insurance companies.  So if you default, you wipe all of those people out, which is basically everyone.  You also make it impossible to finance the budget deficit, so you'll have to IMMEDIATELY cut $2 Trillion from the Fed budget.  The only place to cut is medicare and socialist security.  Oh, and socialist security holds its dwindling reserves in treasuries.

I really don't get your point.  Sum up the point of contention in a few sentences.

I am saying that once you are past the point of no return (you know you can never pay) and are going bankrupt then you might as well pig out on debt, because for sure the Chinese can never take those goods back and deconstruct them into gold or money.

So go the Venezuela option.  Corporations going bankrupt don't take down the currency when they go out with a bang.   Countries that take out huge debt (purchased by freshly printed Fed bucks) destroy their currency.  I'd like a little more time to prepare.

[christulsa]

I'll summarize the contention.  03 argues for the Venezuela route, printing more $, to buy more time to prepare for collapse, economically.  MG argues for the Argentinian option, defaulting and a accelerating the collapse ultimately for moral and spiritual reasons.  If I got that right.

[Prayerful]

While confidence holds up the US cannot possibly go bankrupt, but the vast devaluation of the dollar since Pres Nixon perhaps hints there is a point. However, I the other big blocs like the EU and PRC have severe issues. PRC is known for vast, uninhabited cities and its demographics are astoundingly unbalanced, there's frequent small scale riots, which might suggest there could be a tipping point. Yet Chinese have a relaxed attitude to rules, but know not to tweak the Red Dragon - a degree of local protest seems to be tolerated. They are rather good at high speed rail. Trains do run on time there. Despite a lot of patents, the Chicoms rip off everything. The EU aka Greater Germany has many effective companies and while its demographics are bad, there was nothing comparable to the stupidity of the One Child Policy. I think, for now, the US is still the best of a very indifferent bunch.

[MaximGun]

Unpayable debt is unpayable.

Therefore print it until the system collapses.  Nobody knows when that is going to be.  Pundits have been wrong, time after time.  All of them.  Nobody understands economics and nobody predicted the mad debt world we are in today.

There is no advantage to defaulting on 30T as opposed to 100T.  In fact, in the second case you have 70T worth of goods and services for whatever good they do.

Whatever comes next, neither of those amounts will be paid.  Neither will the pain be 3 times worse.  Nor will it ever be known if it was 3 times worse since there is not a parallel universe to compare it to.

[Heinrich]

Unpayable debt is unpayable.

Therefore print it until the system collapses.  Nobody knows when that is going to be.  Pundits have been wrong, time after time.  All of them.  Nobody understands economics and nobody predicted the mad debt world we are in today.

There is no advantage to defaulting on 30T as opposed to 100T.  In fact, in the second case you have 70T worth of goods and services for whatever good they do.

Whatever comes next, neither of those amounts will be paid.  Neither will the pain be 3 times worse.  Nor will it ever be known if it was 3 times worse since there is not a parallel universe to compare it to.

What part of the US do you live?

[christulsa]

I live 150 miles distant from London in the SW of England.

[ralfy]

The country has unfunded liabilities of over $200 trillion.

It's commercial banks, together with counterparts in other countries, are exposed to a global unregulated derivatives market with a estimated notional value of $1.2 quadrillion.

What Biden and other Reagan clones have been playing around with, including Trump, is essentially chump change, but even that's enough to cause chaos. For example, the 2008 crash, which is a culmination of more than three decades of Reaganomics, started with fallout from "only" $1 trillion in money gambled in the housing market, leading to the rich receiving an estimated $15 trillion in bailouts by 2011.

And that's the same rich that essentially controls the U.S. economy.

[james03]

For example, the 2008 crash, which is a culmination of more than three decades of Reaganomics,

LOL.  This is what happens when you react to symptoms and don't understand.

Congress passed the CRA which forced banks to make loans to minorities who didn't qualify.  They gave them a back door in that the banks could offload the junk to Fannie Mae.  Which is why Fannie blew up.  But overriding this was the Federal Reserve Banking Guild pumping money and keeping rates at a ridiculous low level.

fallout from "only" $1 trillion in money gambled in the housing market

It's right in front of you and you don't see it.  Where did the $1 Trillion come from to gamble on the housing market?  It came from Fed pumping.  You react to the symptoms (people going wild with $1 Trillion with gambling and fraud) and ignore the hippo in the bathtub.  The Fed.

Note I'm for reinstating Glass Steagle and going to either gold money or the green back.

The ANCAPS will reply that a government with the power to give you Glass Steagle is a government powerful enough to give you the CRA.  That's a good point, and thought must be given on how to get prudent regulation and avoid politicizing regulations, or using regulations to commit fraud.  For example, it should be obvious to everyone that we need to ban usury.  That has to happen if you want a stable economy.  One answer is to incorporate the usury ban in your founding documents, The New Constituion, along with sound money, and then rely on subsidiarity, that is individual State regulation, to regulate the banks.  That would be my answer to the ANCAPS.

[james03]

Unpayable debt is unpayable.

Therefore print it until the system collapses.

The worst move.  It is much better to default and do a controlled demolition.  In the corporate world, you would call it a pre-packaged bankruptcy.  Normally these fail due to game theory, but it is the ideal.  In the government bankruptcy, you don't have the problem.  You just default, but package it as best you can.  This results in a hard depression for about a year.  After it is behind you you will recover with real growth.  Historically 12 - 18 months until recovery.  Note your productive assets are still there.

Printing until it blows up misallocates resources and ends with the same result, a hard depression.  Skip the misallocation and just default up front.  Better plan.

Politically, as we saw in Greece, a controlled default is politically impossible.  So we will print until we can't.

As far as the size of the debt, you have a point.  The U.S. could issue zero coupon bonds, and the Fed would be the sole buyer.  The Fed could keep printing money and buying these bonds forever.  Of course the dollar will become worthless, however theoretically there is no limit to the debt level on the US Gov.  This is an evil of fiat money.