Bush has just tripled the US foreign debt overnight

eamonnm79 · 29-09-2008 3:01pm

SoCal90046 wrote: »

Here's a book that will help you develop better arguments.

The debt ceiling has nothing to do with the flow of spending. When Congress passed a bill to authorize spending of $800 billion, the debt ceiling had to be raised too. If the funds were already committed, there would be some accompanying event, such as the issuance of Treasury bonds; that hasn't occurred. Regardless if the funds were spent, if the administration wants to commit more funds, and Paulson has asked for an additional $700 billion, the ceiling on the debt has to be raised again.

If they didnt issue treasury bonds, Where did they get all the money to bail out Fanny and freddie AIG JP Morgan etc? They did, mainly to Chinese and Saudi Banks. The treasury lives hand to mouth. It doesnt hold big reserves. If they need finance they have to instruct the fed to issue bonds.

I have already sent you a link showing where they have spent 1.1 trillion and if they get permission for this 700 billion it will go to 1.8
IMHO very few lay people know that they have already given 1.1 trillion of their tax dollars and the media are not telling people this.

My point was that I think there is a deliberite campaign of misinformation to protect the media and the poloticians.

I watched the presidential debate from friday. Both candidates spoke about the effects on the economy of the 700 billion dollar bail out. Neither of them spoke about the 1.1 trillion that the tax payer has already given in just the last 2 months.
I actually emailed a few american journalists from liberal media in america to tell them they were misrepresenting the size of the bailout and the ones who relpied basicly said 'oh yeah, good point'
Id like to recomend a book to you, Manufacture and Consent by Noam Chomsky.
Not for the first time the American public are being scared into doing what the interests of Wallstreet and the huge corporations.
If you read Shock Doctorine by Naomi Klein this is the usual tactic.

I heard an interview she gave on friday. She said the thing that Surprised her most was the fact that that the latest bailout document was only three pages and in readable language. She said because of this people are reading it and objecting strongly.
Intrestingly the amended bailout document is 110 and ten pages and unreadable to lay people.
Jesus Im starting to sound like Jim Corr!

This is funny but Leno is using the wrong figure too.

See, you know the way a bailout works? Here's the way a bailout works. A failed president and a failed Congress invest $700 billion of your money in failed businesses. Believe me, this can't fail."

~ Jay Leno

Économiste Monétaire · 29-09-2008 3:06pm

eamonnm79 wrote:

If they didnt issue treasury bonds, Where did they get all the money to bail out Fanny and freddie AIG JP Morgan etc? They did, mainly to Chinese and Saudi Banks. The treasury lives hand to mouth. It doesnt hold big reserves. If they need finance they have to instruct the fed to issue bonds.

The Treasury does not tell the Federal Reserve to issue T-Securities. That jobs falls to the Bureau of Public Debt.

edanto · 29-09-2008 4:03pm

So what is the relationship between the Treasury and the Federal Reserve?

As I understand it the Fed is a privately owned bank that lends money at interest to the govt, "about as Federal as Federal Express" to use the expression from Zeitgiest. Whereas the Treasury is fully government and it is the Treasury that is seeking permission from Congress to increase the level of public debt. Any of that wrong?

Économiste Monétaire · 29-09-2008 4:29pm

The Federal Reserve has been delegated the task of conducting monetary policy by the legislative branch of the United States government. 'It' (the Federal Reserve system) is not a privately owned bank, I know of no privately owned banks that are required to make bi-annual reports to a legislature and whose board is appointed by the executive branch of a government, with consent from the legislature.

The Quasi-State (complex) structure is a bi product of America's long standing disdain for having a central bank. The need for a central bank comes from the long standing adage, the power to print money should be separate from the power to spend it.

Just to nip it in the bud, I'm not going to get into a CT type conversation about the Fed.

eamonnm79 · 29-09-2008 5:32pm

I thought the fed was privately owned bank too.
I got this from wiki (I know wiki isnt always correct so if its wrong Id like to know)
Conservative Democrats fought for a privately owned, yet decentralized, reserve system, which would still be free of Wall Street's control. The Federal Reserve Act passed Congress in late 1913 on a mostly partisan basis, with most Democrats in support and most Republicans against it.

edanto · 29-09-2008 6:19pm

It seems to be a bit of a connundrum who actually owns it, not helped by the fact that there are a menu of answers, each equally true, and an assorted arraoy of bullsh1t to wade through.

The best answer that I've found is that the Fed is owned by its member banks. After that, we get lost in a fog of undisclosed details and corporations owned by corporations - plus I don't know enough about economics to know how to compare the Fed to any other central banking system that there is.

This page seems to give answers to Federal Reserve questions that seem a bit more level-headed than the zeitgeist claims, but I've got no idea about the factfullness
http://webskeptic.wikidot.com/zeitgeist-federal-reserve

Apologies for the off-topicness...

Back to the Bailout Plan - here's an article in the Daily Camera (from hippy Boulder, Colorado)

House Republicans, meanwhile, fought hard for -- and won -- a provision that would establish a program whereby banks could buy government insurance to back the principal and interest on certain troubled assets, rather than selling them outright.

So does this mean that the banks get to pay the govt for this 'insurance policy' and if the asset turns out to be worthless, then the taxpayer takes the hit, but if the asset turns out to be valuable then the bank can retain the profit privately?

That seems outrageously unfair and stacked in favour of the banks. What's the motivation for it?

anonymous_joe · 29-09-2008 6:42pm

The obvious motivation is that the US government is at the end of the day in charge of the world's most important and productive economy. If debts got sold to foreign banks then America would find itself in debt to people with no loyalty to them (something no-one wants) moreover, those debts could bring down other banks, triggering a global banking crisis.

Furthermore, you have to allow for the effect that the American economy is almost always able to get itself out of any crisis, due to pretty much leading most industries.

Besides, in a worst case scenario, America takes on its own people's debt... The Federal Government can reduce the interest rates on those loans, etc and also give people more time to pay them back. Something that a bank would find unprofitable, but goverments tend not to seek out a profit.

SoCal90046 · 29-09-2008 8:37pm

eamonnm79 wrote: »

If they didnt issue treasury bonds, Where did they get all the money to bail out Fanny and freddie AIG JP Morgan etc? They did, mainly to Chinese and Saudi Banks. The treasury lives hand to mouth. It doesnt hold big reserves. If they need finance they have to instruct the fed to issue bonds.

Read up on the topic. The $800 billion authorized in July hasn't been spent. Think of it as a budget.

eamonnm79 wrote: »

I have already sent you a link showing where they have spent 1.1 trillion and if they get permission for this 700 billion it will go to 1.8 IMHO very few lay people know that they have already given 1.1 trillion of their tax dollars and the media are not telling people this.

You're talking nonsense here. You have no evidence as to what knowledge people have. The actions authorized in July are separate and distinct from the current request by the Secretary of the Treasury. You're misrepresenting what occurred.

eamonnm79 wrote: »

My point was that I think there is a deliberite campaign of misinformation to protect the media and the poloticians.

LOL

Yep, and the fact that there isn't a shred of evidence for this nonsense is de facto evidence of the depth of the conspiracy.

Methinks your post is better served on some kind of spirituality thread!

eamonnm79 wrote: »

I watched the presidential debate from friday. Both candidates spoke about the effects on the economy of the 700 billion dollar bail out. Neither of them spoke about the 1.1 trillion that the tax payer has already given in just the last 2 months.

Yet again, you're missing the point.

eamonnm79 wrote: »

I actually emailed a few american journalists from liberal media in america to tell them they were misrepresenting the size of the bailout and the ones who relpied basicly said 'oh yeah, good point'
Id like to recomend a book to you, Manufacture and Consent by Noam Chomsky.
Not for the first time the American public are being scared into doing what the interests of Wallstreet and the huge corporations.
If you read Shock Doctorine by Naomi Klein this is the usual tactic.

How very interesting. So should we expect a flurry of reports later today and tomorrow about this conspiracy that you have uncovered?

edanto · 06-10-2008 11:13pm

SoCal - I'll defer to your superior research - but I'd be interested in some links to US academic economics reports that explain what has been spent to date, the level of debt and other things that you mention, ideally written in plain language if you've seen them!

That's a pretty big ask I know, it's just the kind of papers that I've been looking for and haven't been able to find.

Be grateful for any pointers you might have! thx

SoCal90046 · 07-10-2008 4:16am

edanto wrote: »

SoCal - I'll defer to your superior research - but I'd be interested in some links to US academic economics reports that explain what has been spent to date, the level of debt and other things that you mention, ideally written in plain language if you've seen them!

That's a pretty big ask I know, it's just the kind of papers that I've been looking for and haven't been able to find.

Be grateful for any pointers you might have! thx

One of the best places to look, at least from what I have found, is the Government Accountability Office (it used to be called the Government Accounting Office and I still use this term) which is the investigational arm of the legislative branch. It basically digs up dirt on the executive.

The other place to look is the website of the website for the Department of the Treasury. It's a first step. From there you can burrow into all the agencies under the Treasury.

Probably the best area to dig into is the Bureau of the Public Debt, which has lots of information, though most of the juiciest pieces (well not all) are now at TreasuryDirect. If you dig into TreasuryDirect, you'll reach this page, which gives a chart showing the debt ceiling (with two recent bumps) and the actual spend. Here's a page that will give you other links and you should be able to find a page that allows you to learn what the debt was on any given day.

Bush has just tripled the US foreign debt overnight

Comments