United States Debt Default

No, completely wrong. It works the same way when you make a cash deposit in your bank account. Does the bank "buy" the currency from you? No, of course not. They just take it and note that your account is now larger by the same amount of money you have them.

You even cited a Wiki page that agrees with me!

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Crashfrog in Message 145:

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Federal Reserve Notes are printed by the Bureau of Engraving and Printing (BEP), a bureau of the Department of the Treasury.[8] The Federal Reserve Banks pay the BEP not only the cost of printing the notes (about 4¢ a note), but to circulate the note as new currency rather than merely replacing worn notes, they must pledge collateral for the face value, primarily in Federal securities.

In contrast, the Federal Reserve pays the United States Mint—another Treasury bureau—face value for coins, as coins are direct obligations of the Treasury.

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http://en.wikipedia.org/wiki/Federal_reserve_note

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(Emphasis added)

Perfectly simple and requires the issuance of no further government debt.

You even cited a Wiki page that agrees with me!

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Crashfrog in Message 145:

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Federal Reserve Notes are printed by the Bureau of Engraving and Printing (BEP), a bureau of the Department of the Treasury.[8] The Federal Reserve Banks pay the BEP not only the cost of printing the notes (about 4¢ a note), but to circulate the note as new currency rather than merely replacing worn notes, they must pledge collateral for the face value, primarily in Federal securities.

In contrast, the Federal Reserve pays the United States Mint—another Treasury bureau—face value for coins, as coins are direct obligations of the Treasury.

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http://en.wikipedia.org/wiki/Federal_reserve_note

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(Emphasis added)

It's the difference between paying cash and writing a check.

As far as I can tell, your proposed solution would only be even remotely possible if it involved the Treasury minting coin (and perhaps printing U.S. Notes) which it then distributed directly to those to whom it was obligated in place of a check drawn from its account.

The money would still be the same thing, an I.O.U., except the Treasury wouldn't be taking anything in exchange for it, and so wouldn't technically be taking on more debt for itself.

But when the Treasury sells its coin to the Bank, the Bank gives the Treasury something of actual value and receives, in exchange, a promise from the Treasury (worthless trinkets, really) to return that thing of actual value when asked for.

That's a debt—straight-up.

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Crashfrog in Message 149:

If you have a quarter, which means that at your request the Treasury must pay you twenty-five cents, but the way they're going to pay that "debt" is by giving you a quarter

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More ideally, they will give you back whatever they received from the Bank the first time around when they gave the Bank the coin in exchange for some stuff.

If they give you a quarter in exchange for your quarter, then they're really not settling their debt; they're just telling you to take your I.O.U. and try to get something of value with it from someone else. Others are certainly free to accept your I.O.U., but that debt is still officially an obligation of the Treasury, even if you manage to pass along the responsibility of collecting on it to someone else.

Jon

Though you Americans do have a funny law that allows shops to take any kind of currency if they so desire.

That's not funny, that's normal. Surely you could do that too --- if you want, you can let someone settle their debts with you in rubles or gold or chickens. If not, why not?

That's not funny, that's normal. Surely you could do that too --- if you want, you can let someone settle their debts with you in rubles or gold or chickens. If not, why not?

I wonder how you deduct the tax from chickens???

I think the law we have that only certien currency can be used in shops and simmilar places still comes from yugoslavia where too many german marks where "imported" to the country causing some problems forgot the details of what exsactly was going on.

It is still funny though technically a shopkeeper in your country can legally accept monopoly money for goods i wonder how that would show up on a tax report.

p.s.

Well usualy when a debter cant pay his debt you take something of value like a house or a car to settle the debt you could take a few chickens and settle the debt that way sure but i just dosent happen stuff like that usualy gets auctioned off and the money goes into the pocket of the guy who owns the chicken owners debt.

Edited by frako, : No reason given.

Taz writes: The republicans have been trying to cut medicare and social security in the name of fiscal conservatism.

These are the heart and soul of the Democratic Party, but, even with the most popular Democrat since Clinton in office, and even with a virtually balance House and Senate, if these programs are cut, we will be entering a very dark time in US History. Right at the time I am retiring, too! I hate the wealthy and would bring them down if I had the power to do so. (Not personally...any of you who are republican or wealthy please understand that I am asking you to suffer a little bit too, along with we poor folk.)

There aren't enough "wealthy" to make much of a difference.

The problem is on the other end of the scale.

With about 50% of the population living off the government (i.e., they and the government are living off the 50% who have incomes), what we really need is a way to make some of those folks pay some taxes. That would give them more of an interest in keeping government expenses and tax rates down.

The problem we have is that we are subsidizing unproductive citizens. If you pay people not to work, what do you think the result will be?

There are a number of folks who we genuinely need to help or support, but that number is far smaller than those currently being supported.

Got some sauce for those whack ass numbers?

Figured you didn't.... Just like you NEVER have any solid validation when it comes to anything politics related.

even with the most popular Democrat since Clinton in office

The only Democrat since Clinton; which isn't much special considering we only had one other guy in between them.

even with a virtually balance House and Senate

Balanced in what way?

if these programs are cut, we will be entering a very dark time in US History.

Dark Times are already upon us.

Jon

You even cited a Wiki page that agrees with me!

No, it doesn't. The Federal Reserve Bank doesn't buy coins at face value because they're debt, they buy them at face value because they're already money. Just like how if you want a roll of quarters, you have to pay $10 for it - face value.

They're already money. When the Federal Reserve Bank buys $10 in quarters, they're making change, not buying debt.

You even cited a Wiki page that agrees with me!

No, it doesn't. I've already explained to CS how "direct obligation of the Treasury" just means "money."

I mean, what's the "obligation"? If you present a quarter to the Treasury, they're obligated to give you 25 cents for it. But they're going to meet that obligation by giving you a quarter. There's no way in which having a quarter can be construed as owning any debt - it doesn't gain interest, there's no obligation of repayment to be met.

As far as I can tell, your proposed solution would only be even remotely possible if it involved the Treasury minting coin (and perhaps printing U.S. Notes) which it then distributed directly to those to whom it was obligated in place of a check drawn from its account.

Well, the Treasury can't issue any more US Notes. There's a statutory limit on the total number that can be in circulation - I heard somewhere that it was 300,000 - and they're always at that limit.

But a platinum coin isn't a Treasury note, it's a coin. And while regular coinage, silver coinage, and gold coinage are subject to statutory limits as well, platinum coins are not. This oversight gives the Treasury unilateral authority to strike and issue platinum coins in any denomination, and by Federal law they're money. Legal tender. (CS has quoted the relevant law already.)

And again all they have to do is walk the coins over to a bank and deposit them in a checking account. They're money, so the bank has no reason not to take them. And once they're in an account checks can be written against that money, just like your checking account at your bank.

But when the Treasury sells its coin to the Bank, the Bank gives the Treasury something of actual value and receives, in exchange, a promise from the Treasury (worthless trinkets, really) to return that thing of actual value when asked for.

What does the bank give the Treasury except numbers in an account? Nothing. The money that the Treasury would write the checks against is just as "imaginary" as the money represented by a trillion dollar platinum coin. There's no difference. Hell, for that matter the people who get the checks are getting something every bit as imaginary, it's just more numbers in an account. Maybe at some point somebody down the chain actually takes it out in cash but so what? Cash is imaginary, too.

It's a fiat currency. Has been for decades.

More ideally, they will give you back whatever they received from the Bank the first time around when they gave the Bank the coin in exchange for some stuff.

No, they won't. Treasury debts are denominated in dollars, not in gold or silver. Hasn't been for decades, Jon. Don't you hear Buz complaining about that all the time? When you take your quarter to the Treasury to make a claim against their "obligation", what do you think you get?

You don't get gold or silver. You get 25 cents. Debts in the United States are denominated in dollars and cents, not in gold or silver. That's because dollars are a fiat currency. I mean jesus, Jon we talked about this for weeks not too long ago. Were you just completely not paying any attention?

With about 50% of the population living off the government (i.e., they and the government are living off the 50% who have incomes), what we really need is a way to make some of those folks pay some taxes.

They already pay taxes. They pay more as a percentage of their income in taxes, in fact, than the wealthiest 400 individuals in the United States.

Remember when you were schooled about your dishonest attempt to conflate taxes with income taxes? Can you explain why you're back here regurgitating the same falsehood?

If you pay people not to work, what do you think the result will be?

Probably exactly what already happens - they spend their time being productive in ways that aren't yet monetized.

There aren't enough "wealthy" to make much of a difference.

But they have enough wealth.

The problem is on the other end of the scale.

Prove it.

what we really need is a way to make some of those folks pay some taxes

Easily done:

Hey rich people; Coyote wants you to pay your employees fair wages instead of stealing all the wealth they generate and keeping it for yourselves. That way they can pay more in taxes.

There. Fixed.

The problem we have is that we are subsidizing unproductive citizens.

Didn't know we lived in a nation that let people starve to death on the basis of their 'productivity' (likely measured by you as a function of how much wealth they can generate and funnel into the pockets of the rich).

There are a number of folks who we genuinely need to help or support, but that number is far smaller than those currently being supported.

Yes; clearly we are doing too much. That's why there are no homeless people, no hungry people, no poor people. We obviously already helped all the people who 'we genuinely need to help or support'—all the rest has just been overkill.

I hate to say it, but I guess I am no longer shocked when I find a person whose scientific prowess does nothing to prevent mind-numbing stupidity in other fields of thought.

Jon

They're already money. When the Federal Reserve Bank buys $10 in quarters, they're making change, not buying debt.

I never said they were buying debt. They are giving the Treasury something of real value in exchange for I.O.U. trinkets. It represents a debt of the Treasury, as indicated by the Wiki article you quoted calling the coins 'obligations' of the Treasury. Obligation = Debt.

I've already explained to CS how "direct obligation of the Treasury" just means "money."

Nope; you sure didn't.

If you present a quarter to the Treasury, they're obligated to give you 25 cents for it.

So you say.

it doesn't gain interest

Neither does the money I borrow from my parents; still debt.

there's no obligation of repayment to be met.

Of course there is. Read the link you posted.

And again all they have to do is walk the coins over to a bank and deposit them in a checking account. They're money, so the bank has no reason not to take them. And once they're in an account checks can be written against that money, just like your checking account at your bank.

That's not how it works.

What does the bank give the Treasury except numbers in an account?

Read the link you posted; it's all in there.

No, they won't. Treasury debts are denominated in dollars, not in gold or silver. Hasn't been for decades, Jon. Don't you hear Buz complaining about that all the time? When you take your quarter to the Treasury to make a claim against their "obligation", what do you think you get? You don't get gold or silver. You get 25 cents. Debts in the United States are denominated in dollars and cents, not in gold or silver. That's because dollars are a fiat currency. I mean jesus, Jon we talked about this for weeks not too long ago. Were you just completely not paying any attention?

Oh well. Why don't I ever learn?

You're hopeless.

Always have been.

Always will be.

My time is best spent elsewhere.

Jon

Got some sauce for those whack ass numbers? Figured you didn't.... Just like you NEVER have any solid validation when it comes to anything politics related.

"Nearly half of US households escape fed income tax

Recession, new tax credits have nearly half of US households paying no federal income tax"

http://finance.yahoo.com/...S-households-apf-1105567323.html

So now you want to raise taxes on working families who are already struggling, but NOT raise taxes on the super rich? What the FUCK is your problem?

{abe}

With about 50% of the population living off the government (i.e., they and the government are living off the 50% who have incomes),

I'm glad you cherry picked that article. Hell, you didn't even cherry pick it: you misconstrued it. You DO realize that those ALLEGED 50% aren't considered "living off the government" AND they DO have an income, right?

Edited by hooah212002, : No reason given.

"Nearly half of US households escape fed income tax Recession, new tax credits have nearly half of US households paying no federal income tax"

Key words are key...

They unlock all the meaning and prove to everyone that you are good at misusing sources when it suits you.

Jon

So why would the Federal Reserve give them the money for it in the first place?

They wouldn't. They couldn't.

First, the Fed Board of Governors, at its sole discretion, determines what notes in what denominations to purchase from the Treasury. Each individual Fed Reserve Bank in each district, at its sole discretion determines what coins in what denominations to buy. Treasury could strike all the $billion Platinum Geithners it wants but without a purchase order from the Fed they sit in the vault. They do not go into circulation and sit on the Treasury's books, in the Public Enterprise Fund, at production value, not face value.

Second, one of the reasons for the Fed, the very crux for its existence is to keep monetary policy out of the government's hands. Frog's little scheme is precisely what the Fed is there to prevent: government diluting the supply and the value of money by churning out cheap money for political purposes.

Third, except for numismatic items and bullion sales, all coinage flows through the Federal Reserve at its sole discretion as to amounts and values. The Fed has no use for a $billion Platinum Geithner any more than it has a use for a $50 Gold American Eagle. These are bullion sales to the public and anyone who thinks someone is going to buy a 1 ounce platinum coin for a $billion needs an MRI.

Edited by AZPaul3, : No reason given.

Edited by AZPaul3, : No reason given.

Edited by AZPaul3, : No reason given.