09-15-2016, 07:10 AM
(09-07-2016, 02:33 AM)Galen Wrote: Second, the welfare and regulatory state you love depends on the petrodollar system remaining intact because that is the only thing maintaining demand for dollars and treasury securities which allows borrowing to continue. It will not be possible to taxes enough to close the deficit, particularly when interest rates rise as doubts about the credit worthiness of the US government become commonplace.
Once that happens there are three choices. First, the Fed can choose to monetize the debt, currently called quantitative easing. Second, the federal government can default on its debt. It may not even be called that but many promises, often called unfunded liabilities, will not be kept. Third, the government can live within its means, which will mean the government will become much smaller.
Money is one half every transaction so it damn well matters what happens to it.
You guys have been saying this since '71 (some of you since '33). This was a hot issue 300 years ago when it first came up. It's been with us ever since.