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Can you have a healthy economy without debt?
#11
(03-22-2020, 02:03 PM)sevenmmm Wrote: The resources it took building and maintaining this economic system have dissipated into entropy.

Large institutions will no longer be able to be support.., probably never as it will take centuries for the biology to rebuild to past recent levels, if ever.

True or not........
gotta be a sad - almost pathetic type of life to live with that kind of doom and gloom negativism!



personally I hope you live at least 5 more years to see how much more well off most all humans are living world wide.
(course, as you've done the last 20 years or more, you will still be denying reality and claiming doom is "just around the corner still)

(03-22-2020, 12:32 AM)cbeatty Wrote: Can you have a healthy economy without debt?

Notice the instigator has been completely missing since asking this question??

NOW Y'all know why my first impulse to him was:


Quote:DaveGillie
______________________________
why would you ask such a question?
seems just trolling
Reply
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#12
(03-22-2020, 12:32 AM)cbeatty Wrote: Can you have a healthy economy without debt?

No.  People freely interacting with each other will always produce debt.  Let me give an example.

Suppose you need your lawn mowed and your neighbor needs some groceries.  You and your neighbor may agree that he will mow your lawn and you will provide some groceries.  This exchange benefits both parties because they both give up something they value less in exchange for something they value more.

There's no debt involved in this exchange.  But let's suppose he needs the groceries now, but won't have time to mow your lawn until the weekend.  So you provide the groceries now, and he will mow your lawn this weekend.  Now there's debt involved.  During the interval between you providing the groceries and his mowing your lawn, he owes you and you are owed by him.

What's wrong with this?  If the only way for this exchange to happen was for him to mow your lawn immediately, it might not happen at all, and both of you are poorer for it, because you're each giving up something that you'd rather have.  The existence of debt has facilitated a trade that benefits both parties.
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#13
I think the question today is how long can the system survive now that it has unsustainable debt and the trajectory is for the debt to reach ever higher levels, ever faster.
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#14
(03-22-2020, 04:08 PM)DaveGillie Wrote:
(03-22-2020, 12:32 AM)cbeatty Wrote: Can you have a healthy economy without debt?

Notice the instigator has been completely missing since asking this question??

NOW Y'all know why my first impulse to him was:


Quote:DaveGillie

Notice the instigator has been completely missing since asking this question??


NOW Y'all know why my first impulse to him was:
______________________________
why would you ask such a question?
seems just trolling

Hurry, hurry, give Gillie a cookie!
He's so smart. He has everything all figured in that 1 inch mind, inside a 2 inch thick skull.

Gillie, I ignored you, because I didn't want to insult you, you Stupid Ass, and that is all your question was worth. But since you brought it up again, hoping to get a pat on the head from the board, I feel no such compunction to go hold back.

(interesting that this "trolling" question elicited some thoughtful responses.)

(03-26-2020, 10:01 PM)aqualech Wrote: I think the question today is how long can the system survive now that it has unsustainable debt and the trajectory is for the debt to reach ever higher levels, ever faster.

Perhaps Cheney was right when he said deficits/debt doesn't matter. The debt has been "unsustainable" for a long time, and so has the trajectory for growth and speed.

How can debt be unsustainable when it can be expanded forever, and when money to pay it can be infinitly created. (And then with negative interest rates, you have another factor.)

Debt has been very good to keep the slaves working, and to"properly" distribute ownership.

(03-26-2020, 08:23 PM)Finster Wrote:
(03-22-2020, 12:32 AM)cbeatty Wrote: Can you have a healthy economy without debt?

No.  People freely interacting with each other will always produce debt.  Let me give an example.

Suppose you need your lawn mowed and your neighbor needs some groceries.  You and your neighbor may agree that he will mow your lawn and you will provide some groceries.  This exchange benefits both parties because they both give up something they value less in exchange for something they value more.

There's no debt involved in this exchange.  But let's suppose he needs the groceries now, but won't have time to mow your lawn until the weekend.  So you provide the groceries now, and he will mow your lawn this weekend.  Now there's debt involved.  During the interval between you providing the groceries and his mowing your lawn, he owes you and you are owed by him.

What's wrong with this?  If the only way for this exchange to happen was for him to mow your lawn immediately, it might not happen at all, and both of you are poorer for it, because you're each giving up something that you'd rather have.  The existence of debt has facilitated a trade that benefits both parties.

Interesting response. And while I contemplate your answer, I will ask a variant question.

Can you have a healthy economy without institutional debt?
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#15
(03-27-2020, 01:41 AM)if cbeatty Wrote:
(03-22-2020, 04:08 PM)DaveGillie Wrote:
(03-22-2020, 12:32 AM)cbeatty Wrote: Can you have a healthy economy without debt?

Notice the instigator has been completely missing since asking this question??

NOW Y'all know why my first impulse to him was:


Quote:DaveGillie

Notice the instigator has been completely missing since asking this question??


NOW Y'all know why my first impulse to him was:
______________________________
why would you ask such a question?
seems just trolling

Hurry, hurry, give Gillie a cookie!
He's so smart. He has everything all figured in that 1 inch mind, inside a 2 inch thick skull.

Gillie, I ignored you, because I didn't want to insult you, you Stupid Ass, and that is all your question was worth. But since you brought it up again, hoping to get a pat on the head from the board, I feel no such compunction to go hold back.

(interesting that this "trolling" question elicited some thoughtful responses.)

(03-26-2020, 10:01 PM)aqualech Wrote: I think the question today is how long can the system survive now that it has unsustainable debt and the trajectory is for the debt to reach ever higher levels, ever faster.

Perhaps Cheney was right when he said deficits/debt doesn't matter. The debt has been "unsustainable" for a long time, and so has the trajectory for growth and speed.

How can debt be unsustainable when it can be expanded forever, and when money to pay it can be infinitly created. (And then with negative interest rates, you have another factor.)

Debt has been very good to keep the slaves working, and to"properly" distribute ownership.

(03-26-2020, 08:23 PM)Finster Wrote:
(03-22-2020, 12:32 AM)cbeatty Wrote: Can you have a healthy economy without debt?

No.  People freely interacting with each other will always produce debt.  Let me give an example.

Suppose you need your lawn mowed and your neighbor needs some groceries.  You and your neighbor may agree that he will mow your lawn and you will provide some groceries.  This exchange benefits both parties because they both give up something they value less in exchange for something they value more.

There's no debt involved in this exchange.  But let's suppose he needs the groceries now, but won't have time to mow your lawn until the weekend.  So you provide the groceries now, and he will mow your lawn this weekend.  Now there's debt involved.  During the interval between you providing the groceries and his mowing your lawn, he owes you and you are owed by him.

What's wrong with this?  If the only way for this exchange to happen was for him to mow your lawn immediately, it might not happen at all, and both of you are poorer for it, because you're each giving up something that you'd rather have.  The existence of debt has facilitated a trade that benefits both parties.

Interesting response. And while I contemplate your answer, I will ask a variant question.

Can you have a healthy economy without institutional debt?

That rates a maybe.  On the other hand, there is a kind of debt that you can definitely have a healthy economy without, and more to the point, you can’t have a healthy economy with.  That’s when debt is produced by central planners, especially when it’s how they issue your currency.  

Normal debt is when two consenting adults agree to create it, in the process of one lending to the other.  The lender forgoes the use of the money while it’s lent out.  But the debt produced when a central bank lends money into existence isn’t that kind.  No one is forgoing the use of anything.  There’s no deferral of consumption.  The “lent” money is conjured out of nowhere.  

The engine of economic progress derives from forgoing consumption and using the resources to produce more.  Instead of consuming part of the corn I grow, I sow it to produce another crop.  If I eat the seed corn, I may be full today but go hungry tomorrow.

The core thing here is that you have to go without something today to be better off tomorrow.  If deferral of consumption is crowded out by borrowing without there being any lender going without, economic progress is frustrated, not aided.  You need capital to make labor more productive and increase living standards, but it has to be real capital derived from deferred consumption.  Fake capital won’t do it.  Worse, it displaces the real thing and reduces living standards.
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#16
(03-27-2020, 04:58 AM)Finster Wrote: [quote pid='24795' dateline='1585273285']

(03-26-2020, 10:01 PM)aqualech Wrote: I think the question today is how long can the system survive now that it has unsustainable debt and the trajectory is for the debt to reach ever higher levels, ever faster.



Finster
Perhaps Cheney was right when he said deficits/debt doesn't matter. The debt has been "unsustainable" for a long time, and so has the trajectory for growth and speed.

How can debt be unsustainable when it can be expanded forever, and when money to pay it can be infinitly created. (And then with negative interest rates, you have another factor.)

Debt has been very good to keep the slaves
working, and to"properly" distribute ownership.

[/quote]
Don't forget what happened in 2008.  Too much easy money leads to bad investments (including your own stock) and the eventual evaporation of people's invested money.  After a decade of too-easy money and too much borrowing by companies and governments, it is inevitable that a lot of those assets that people have piled into will turn out to be not worth much.  All that borrowed money was loaned by someone.  True, including banks, but whose money does that represent?  Poof!  That is when you know the debt was unsustainable - the borrowers begin to default.

Of course, the Fed could and is buying up half of everything in exchange for their shiney fiat, and people will be cheering about that for a little while.
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#17
(03-27-2020, 04:58 AM)Finster Wrote:
(03-27-2020, 01:41 AM)cbeatty Wrote: Interesting response. And while I contemplate your answer, I will ask a variant question.

Can you have a healthy economy without institutional debt?

That rates a maybe.  On the other hand, there is a kind of debt that you can definitely have a healthy economy without, and more to the point, you can’t have a healthy economy with.  That’s when debt is produced by central planners, especially when it’s how they issue your currency.  

Normal debt is when two consenting adults agree to create it, in the process of one lending to the other.  The lender forgoes the use of the money while it’s lent out.  But the debt produced when a central bank lends money into existence isn’t that kind.  No one is forgoing the use of anything.  There’s no deferral of consumption.  The “lent” money is conjured out of nowhere.  

The engine of economic progress derives from forgoing consumption and using the resources to produce more.  Instead of consuming part of the corn I grow, I sow it to produce another crop.  If I eat the seed corn, I may be full today but go hungry tomorrow.

The core thing here is that you have to go without something today to be better off tomorrow.  If deferral of consumption is crowded out by borrowing without there being any lender going without, economic progress is frustrated, not aided.  You need capital to make labor more productive and increase living standards, but it has to be real capital derived from deferred consumption.  Fake capital won’t do it.  Worse, it displaces the real thing and reduces living standards.

Great writing. Concise expression of a complex subject. This is a very interesting thesis. It appeals to me, but then I have a very low opinion of the FED and all central banks. From my vantage, they appear to be designed for theft.
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#18
(03-29-2020, 03:21 AM)cbeatty Wrote:
(03-27-2020, 04:58 AM)Finster Wrote:
(03-27-2020, 01:41 AM)cbeatty Wrote: Interesting response. And while I contemplate your answer, I will ask a variant question.

Can you have a healthy economy without institutional debt?

That rates a maybe.  On the other hand, there is a kind of debt that you can definitely have a healthy economy without, and more to the point, you can’t have a healthy economy with.  That’s when debt is produced by central planners, especially when it’s how they issue your currency.  

Normal debt is when two consenting adults agree to create it, in the process of one lending to the other.  The lender forgoes the use of the money while it’s lent out.  But the debt produced when a central bank lends money into existence isn’t that kind.  No one is forgoing the use of anything.  There’s no deferral of consumption.  The “lent” money is conjured out of nowhere.  

The engine of economic progress derives from forgoing consumption and using the resources to produce more.  Instead of consuming part of the corn I grow, I sow it to produce another crop.  If I eat the seed corn, I may be full today but go hungry tomorrow.

The core thing here is that you have to go without something today to be better off tomorrow.  If deferral of consumption is crowded out by borrowing without there being any lender going without, economic progress is frustrated, not aided.  You need capital to make labor more productive and increase living standards, but it has to be real capital derived from deferred consumption.  Fake capital won’t do it.  Worse, it displaces the real thing and reduces living standards.

Great writing. Concise expression of a complex subject. This is a very interesting thesis. It appeals to me, but then I have a very low opinion of the FED and all central banks. From my vantage, they appear to be designed for theft.

Notice so far I’ve managed to avoid mentioning the Fed as such.  But you’ve recognized the indirect allusions.  

Your conclusion follows like night does day.  Governments have only so many ways of raising the funds they spend.  They can levy direct taxes.  They can borrow.  They can inflate.  Of these, only the first is honest.  It allows voters to see in full view the cost of politicians’ programs.  The second is less so, because the borrowing may be repaid and it might not.  The third is theft.  The government creates the currency from nothing.  This takes purchasing power from all holders of the currency.  The crucial point here is that few voters are aware of it.  As prices rise, the blame is put on things like bad weather, greedy oil companies ... anywhere but the cost of politicians’ programs.  Deficits and debts are discussed as if they’re just abstractions with little relevance to voters’ daily lives.  

The whole situation is further complicated by the fact that in order to retain the appearance of propriety, instead of just printing up the money and forthrightly inflating (as if there were such a thing), it’s borrowed from the banking system.  This results in the inflation being temporary in nature, with periods of inflationary expansion followed by deflationary bust.  The greater the buildup of debt, the lower the price must be put on it to induce more debt accumulation.  The end game is near when the price of credit nears zero.  And the inflationary periods become weaker and the deflationary phases stronger.  We see examples in the stock bear markets of 2000-2003, of 2008-2009, and finally the current crash.  

Another side effect - if not an intended effect - is that as interest rates fall, asset prices rise.  This transfers wealth to those who own most of the assets; by definition the wealthy.  So in addition to enriching and empowering politicians, debt-fueled inflation also makes the rich richer at the expense of everyone else.  It should be no mystery by now what’s been blowing out the wealth gap.  It sure isn’t the free market.

So while I wouldn’t make the case that debt itself is fundamentally an economic evil, there is no question that this kind of debt is at the core of the biggest scam in human history.
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#19
(03-29-2020, 05:24 AM)Finster Wrote: So while I wouldn’t make the case that debt itself is fundamentally an economic evil, there is no question that this kind of debt is at the core of the biggest scam in human history.


I agree

Quote:cbeatty
__________________________________

....................I have a very low opinion of the FED and all central banks. From my vantage, they appear to be designed for theft.


I agree
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#20
(03-27-2020, 04:58 AM)Finster Wrote: The core thing here is that you have to go without something today to be better off tomorrow.  If deferral of consumption is crowded out by borrowing without there being any lender going without, economic progress is frustrated, not aided.  You need capital to make labor more productive and increase living standards, but it has to be real capital derived from deferred consumption.  Fake capital won’t do it.  Worse, it displaces the real thing and reduces living standards.

You know I like your overall comment, but I have to question this paragraph. It is written carefully, and to work through it requires some thinking.

"The core thing here is that you have to go without something today to be better off tomorrow."

Is this really true? for an individual, or for society? 
With abundance and growing crops, can I not gorge myself today and tomorrow also?


"If deferral of consumption is crowded out by borrowing without there being any lender going without, economic progress is frustrated, not aided."

In cases where consumption is deferred, yet no private party is looking to put to work/use that which is saved, can The FED(or Keynes) make the argument that money, debt or fiat or not, is just a mechanism to put capital and labor to work; therefore, to loan money into existence to create public works is for the overall benefit of society? 

"You need capital to make labor more productive and increase living standards, but it has to be real capital derived from deferred consumption.  Fake capital won’t do it.  Worse, it displaces the real thing and reduces living standards."

Can the FED(or Keynes) make the argument that "money is the grease that moves the world," and that lubricating the system with plenty of it, through debt creation or not, allows and/or entices more labor utilization which results in more goods, services and capital?
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