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Mike Huckabee’s Portman slam marks a week of controversial comments


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That's very interesting to read all about that. I mean I haven't really followed the whole economic issue in that much depth, so it's interesting to read in more detail.

 

But even if it the bond market does collapse, that debt is still there to pay off it just doesn't vanish. I guess I find it hard to see how you can pay it all off, though I guess of course it means that inflation will go through the roof.

 

In terms of how things were handled w/ the bank collapse do you then think it was a good or bad thing for the bailouts? I mean yes it's a lot of debt, but couldn't it have been much worse?

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Oh but debt does vanish when you don't pay it. Just like if you stopped paying your bills, your debts vanish - the downside is, nobody will ever lend you money again!

 

When you lend someone money, that's taking a risk (just like buying a stock). The risk exists whether you want it to or not. So if China lends the US trillions of dollars, and they don't get it back... too bad for them. But also too bad for us - they'll never buy our debt again (at least not until there's another government in the US).

 

So in the same way an individual has a "credit score", so do the governments of the world. Credit ratings agencies have been downgrading countries like Ireland and Iceland and Spain, etc. Soon they'll downgrade US debt. But they really don't have to - we've reached a turning point where people aren't buying US debt in such large quantities anymore.

 

Instead, they are buying gold and silver and other commodities (because they view this as safer than the bond market).

 

Think about what happens when the market drives the interest rate higher (and that WILL happen... soon). Say something insignificant, like a move from 0.25% to 0.50% Suddenly that $80 billion/month will become $160 billion/month payment. That's huge. So we're sitting on the knife's edge.

 

All that matters when you're thinking about national debt is that monthly interest payment. We pay the bare minimum every month. But soon even this will get out of control, that's the point.

 

As for the bailouts - think about what a bank is. It's just a business whose job it is to connect lenders with borrowers. That's all. Nothing more complex (in principle) than that. So when a bank (or a currency) goes kaput... people don't die. Factories don't explode. Homes don't burn down. The productive capacity of the economy doesn't cease to exist.

 

In the same way, when you break a thermometer, the temperature doesn't suddenly go haywire in the room you're in - you just get a new thermometer. In this situation, we would just get a new currency and new banks. Banks, unlike car companies, electronics manufacturers, etc, don't require a lot of capital goods to start up. All you need is a few nerds and an empty office space and some paper to have a bank.

 

So a lack of bailouts wouldn't have been the end of the world, as you've been led to believe.

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I was an economics minor, political science major.

 

But most of what I know is self-taught, I just think the subject is fascinating and I'm in a minority that believes we're living in historic times. Most people think the status quo will continue in some form or another.

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Ron Paul would be a great choice, though I strongly doubt he'd get it especially since he wasn't liked by the huge Republican base.

 

I think it seems like Mitt Romney might get the nomination. Though other people will try to run, like Palin who I hope never gets nominated. If she does I think I'll join Obama's campaign and help him run against her. She scares the hell out of me.

 

Fox hates Ron Paul so I don't see that happening.

 

If Palin wins it's four more years of Obama.

 

Yep, my post was more of hopeless optimism than anything. Republicans hate him, Democrats are afraid of him...it's a win/win.

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