All Money is Debt

[Logical]

Just been watching ZEITGEIST II ADDENDUM (http://www.youtube.com/watch?v=1gKX9TWRyfs) very intersting stuff.

Basically all the money that exists is somewhere along the line owed by somebody to somebody else.

Money is put into circulation from thin air. All that is done is to stop this is inflation.

When the central bank (of America) goes on to loan money to other banks, they charge interest.... but whats interesting is that nowhere in the world does this money to pay it back exist.

The money owed to the banks will always exceed the money in circulation.

Somewhere along the line the economics will crash.

I though it was a great and very informative documentary although im sure some would just dismiss it as nosense and go on living ignorant to it.

Wonder what everyones thoughts are on the economic system and where it goes from here.

[John Little]

That sounds about right to me, but I'm no economist. What gives money its value as I understand it is a notional set of indices pegged in the overall debt and it is acceptable for currencies to float within the margins of what is set. You get trouble if you go outside those margins.

But I don't think it will crash totally because it is no-one's interest to let it happen.

[Gleber2]

It's in no-ones interest to let the economy collapse but this does mean that it won't happen. Every pyramid scheme collapses eventually.

[Logical]

Its really ridiculous what the government spend the money on though. In 2007 the us spent $161.8 billion in anti-terrorism mesures yet in 2004 1,907 were killed due to supposed terrorist attacks, of that number 68 were American. The leading cause of death in America is heart disease which kills 450,000 each year!

In 2007 how much did the US spend on research on this issue? $2.9 billion dollars!

In 2007 the US spent 54 times the ammount on terrorism than it did for a disease that kills over 6000 times as many people a year.


Just a tad corrupt you not think?

[Walter Ego]

I think it's a great system.

As long as I can make fairly large amounts of cash out if it - then its fine by me. If I can't then I'll pull out and watch the mugs crash and burn.

Lovely.

[scorrie]

You can watch the USA national debt grow in real time on the following site:-

http://www.usdebtclock.org/

[John Little]

Its really ridiculous what the government spend the money on though. In 2007 the us spent $161.8 billion in anti-terrorism mesures yet in 2004 1,907 were killed due to supposed terrorist attacks, of that number 68 were American. The leading cause of death in America is heart disease which kills 450,000 each year!

In 2007 how much did the US spend on research on this issue? $2.9 billion dollars!

In 2007 the US spent 54 times the ammount on terrorism than it did for a disease that kills over 6000 times as many people a year.


Just a tad corrupt you not think?


Corrupt is probably the wrong word. 'Necessary' is probably more accurate.

Until 1913 there was no Federal income tax and taxes were designed to be low in order that people should have unfettered use of what they earned.

But as the Federal government increased in size and power, so did spending- Defence was what most spending was on, and it was also what taxpayers did not mind paying for. The defence related industries are and have been woven so much into the US economy that if you reduced spending on them and moved the cash elsewhere, you'd cause mass unemployment and economic collapse.

Take a look at this;

http://www.militaryindustrialcomplex.com/

It may be regrettable but the alternative is unthinkable..........

[Logical]

I think it's a great system.

As long as I can make fairly large amounts of cash out if it - then its fine by me. If I can't then I'll pull out and watch the mugs crash and burn.

Lovely.

Your the kind of human we should all aspire to be.

At a time when 50% of people earn less than $2 and 1% of the population earns 40% of the worlds wealth.

And all you care about is yourself, no wonder the worlds a mess.

[Logical]

The defence related industries are and have been woven so much into the US economy that if you reduced spending on them and moved the cash elsewhere, you'd cause mass unemployment and economic collapse.


Dont see why the funds wouldnt create jobs elsewhere. But im no expert.

[John Little]

They would create jobs elsewhere but trying to persuade voters to go for such liberal and/or socialist investment would be a bit of an uphill struggle.

But on defence, presidents lose elections because they don't spend enough.

[John Little]

I read today in the Independent that US Military expenditure last year totalled $680 Billion which is 46.5% of total world expenditure. It's still only 4% of their GDP. That does not include what they make from exporting hardware - which must be considerable, but that figure is not given.

Makes interesting reading if you read this too, which comments on the cost of Obama's new healthcare reforms which the Tea Party are so exercised about;

"White House adviser Nancy-Ann DeParle estimated that the changes proposed by the White House would increase the cost of the overall health care bill to $950 billion over 10 years, which she said will be offset by additional fees for health providers and penalties on large employers that do not cover their workers."
http://www.politicsdaily.com/2010/02/22/obama-unveiling-modified-health-care-plan-today/

Fact is that it is easier to persuade people that taxes have to be spent on weapons.

I wonder which is more in the interests of the taxpayers?

[Logical]

Fact is that it is easier to persuade people that taxes have to be spent on weapons

I have always thought that the fuss over the health care was an excuse for the Republicans to work their way into power eventually. The health care plan seems to benefit the poorer most which I can see many politicians not understanding :(

As for the spending in weapons, it does puzzle me a little why people would rather their money go back to war than into health care or similar.

[Gleber2]

We spend £20billion on Afghanistan and Cancer researchers have to beg on the telly. The human race is insane!!

[John Little]

That's an interesting figure Gleber 2. I'd be interested in the source cos I can never find such when I look. I guessed it was more than that.
You would not happen to know what the Iraq thing cost us would you?

I know that the 2 brigades we sent to Korea pushed our balance of payments into deficit in 1951.
There's an idea going round in my head and has been for some time, that our current economic difficulties are due in some part at least to Mr Blair's little foreign adventures so if you know how much I'd be glad to know.

[John Little]

I have always thought that the fuss over the health care was an excuse for the Republicans to work their way into power eventually. The health care plan seems to benefit the poorer most which I can see many politicians not understanding :(

As for the spending in weapons, it does puzzle me a little why people would rather their money go back to war than into health care or similar.

Politics of fear.
Have a wee look at this;

http://www.youtube.com/watch?v=a2hbzq25VAE

[rich]

Try this!

http://www.nybooks.com/articles/archives/2010/aug/19/crisis-euro/

[John Little]

Very good article, clear and accurate. Mr Soros is of course mainly speaking of the Euro and of Germany's responsibility.

However if such a keen financial mind thinks that Merkel, Cameron etc have misread the situation and should not be cutting back then they should sit up and listen. Soros is a Keynsian - and many knock Keynes these days - but if anyone knows what he's talking about in economics then it's Soros - and he has the billions to prove it!

If money is merely a notion and it's all debt then all these cut backs may prove to be a historical mistake....


Thanks Rich. ;)

[Gleber2]

That's an interesting figure Gleber 2. I'd be interested in the source cos I can never find such when I look. I guessed it was more than that.
You would not happen to know what the Iraq thing cost us would you?

I know that the 2 brigades we sent to Korea pushed our balance of payments into deficit in 1951.
There's an idea going round in my head and has been for some time, that our current economic difficulties are due in some part at least to Mr Blair's little foreign adventures so if you know how much I'd be glad to know.
A figure out of my jumbled memories of half caught remarks on the telly.
Not sure if it was per day/week/ month or year. Iraq cost us our national honour and integrity if indeed we had any to lose and that's priceless, isn't it?

[John Little]

Bitter LOL! Yes I rather think it did.

The only ones who came out of it with any degree of honour were the guys who were sent in, followed their orders and did their jobs in the same style they always have - with commitment, bravery and professionalism.

But you don't exactly get the financial costs of the war screaming every day do you?

I think I'll indulge in some idle googling and see if I can come up with something.

[John Little]

This says £14 billion so far but I think that sounds a bit cheap....

http://www.guardian.co.uk/world/2009/feb/13/afghanistan-iraq-bill-british-military

20 billion here.
http://news.uk.msn.com/uk/articles.aspx?cp-documentid=153839830

[Gleber2]

This says £14 billion so far but I think that sounds a bit cheap....

http://www.guardian.co.uk/world/2009/feb/13/afghanistan-iraq-bill-british-military

20 billion here.
http://news.uk.msn.com/uk/articles.aspx?cp-documentid=153839830
Checked the second link and don't, for a second, believe it. £20billion for Afghanistan maybe, but for both, never!

[John Little]

That's about the average figure I can find - but I should add that this figure is on top of the normal defence budget - it does not include the normal day to day figures including salaries, housing etc.

[rob murray]

Corrupt is probably the wrong word. 'Necessary' is probably more accurate.

Until 1913 there was no Federal income tax and taxes were designed to be low in order that people should have unfettered use of what they earned.

But as the Federal government increased in size and power, so did spending- Defence was what most spending was on, and it was also what taxpayers did not mind paying for. The defence related industries are and have been woven so much into the US economy that if you reduced spending on them and moved the cash elsewhere, you'd cause mass unemployment and economic collapse.

Take a look at this;

http://www.militaryindustrialcomplex.com/

It may be regrettable but the alternative is unthinkable..........

US government spending increased dramatically in the 1930's when the US economy collapsed ( share falls / bank collapses ) and unemployment went through the roof. Up to this period the US economy was run on classical economic principles ie the role of the state was to provide a minimum of services ( small government ) with everything else provided by the private sector. Up to the late 20's early 30's, the US economy had cyclical ups and downs but never a full blown depression of the magnitude faced.At that time period faced with total ruin, the US government were at a loss how to proceed. When Roosevelt came to power 1933/34 he adopted the economic theories of John Maynard Keynes an english economist who fundamentally proved that classical economic theory was fatally flawed, specifically that an economy in a downward spiral may in fact stay there and not bounce back if left to itself, therefore the role of the government was central in pushing an economy back into a stable state. Specifically this meant governments should run a deficit ( borrow money ) by financing projects / creating jobs which in turn would inject money back into the economy thereby creating growth / more jobs. Many of the projects delivered under what became known as the New Deal were large scale engineering / construction led involving large firms. These same firms proved "helpful" during WW2 forging very close links with US government hence the political / military / industrial alliance which has dominated post war US.War and the space race are basically massive job creation programmes..basically there is no economic reason for unemployment other than to control inflation..and even then there are clear methods to do this. We in the UK in 2010 face the same economic conditions as the UK / US did in the 30's...so what is the current answer...cut the role of government ( ie return to a small state ) by doing so create unemployment, indirectly cut benefits and create a situation where the economy will have low inflation ( not enough money in circulation ) and low interest rates, the theory being that business can borrow cheap money, expand and create the jobs to soak up the unemployed. Only problem here is that in Japan in the 90's rates were at zero and their economy was still flat for years. Its all really make believe !!