Just a question: How is paying interest to the Fed, which then gives that money back to the Treasury a "profit?" That's like me giving my brother $10 and him giving me the $10 back and me saying I made $10 that day.
Just a question: How is paying interest to the Fed, which then gives that money back to the Treasury a "profit?" That's like me giving my brother $10 and him giving me the $10 back and me saying I made $10 that day.
How do you figure? The entire budget isn't even $5 trillion. It is between $3 and $3.5 trillion.Originally Posted by bxm042
Last edited by Zippyjuan; 12-12-2012 at 05:46 PM.
Freedom is a state of mind. Nobody can take that from you unless you let them.
Okay here's what (should have) happened in 2008. (a rough breakdown)
Housing prices were inflated up to a point, the bubble popped, and suddenly people were in mortgage situations that were way over their heads. Now, in a free market, the companies that made bad lending decisions would have been forced to declare bankruptcy, leaving the next-in-line competitors to come in and buy up toxic assets at reduced rates. Liquidation, in other words. It would have worked somewhat like an auction where people buy stuff cheap and hope to re-sell the goods for a profit, just not for as much as the goods had gone for before. --- so yeah, liquidation.
For the homeowner and the new 'top dog' company, they *might* have been able to re-negotiate previously inflated mortgages to a more acceptable level. This would have been a win-win for everyone. The home buyer gets to stay in his home with a mortgage he can afford payments on. The new mortgage holder gets to make a profit off of assets that were bought relatively dirt-cheap from a now-bankrupt AIG. Everyone lived happily ever after. The end.
What actually happened?
Government stepped in and bought toxic assets off of AIG's hands (and numerous others). For the company on Wall Street, this meant they got off the hook. But the homeowner? [okay he's not actually an owner until the mortgage is paid off, but let's not get too technical] His home value just got shored up by a government bailout! With no relief and still in over his head, he's faced with foreclosure. And forclose they did.
The panic was all over housing prices falling when the market was indicating that prices needed to fall. Now, if you're an investor in real estate, falling prices is a bad thing. But if you're a homeowner who is simply looking at either keeping a roof over his head or getting tossed into the street, cheaper house-payments aren't exactly a bad thing. Sure, you aren't going to 'flip' the house and move out and turn a profit (like we thought was just going to go on and on forever indefinitely), but, yeah, at least you have a roof over your head.
Want a summary in the form of a cheesy football analogy?
AIG is still in the game after the referee (the market) tried to throw them out. The homeowner is still trying to figure out if he should stay for the rest of the game or leave the stadium now and try to beat traffic. And the Fed is still coaching every team making sure no one makes any plays that aren't planned in advance. Not much of a game if you already know who's gonna win, is it?
Last edited by nobody's_hero; 12-12-2012 at 05:54 PM.
If something bad happens, we will be blamed. If something good happens, we will get no credit. If nothing happens, we will be forgotten.
http://usatoday30.usatoday.com/news/...ing/55179748/1
These are the sort of accounting tricks which would land the CEO's of private companies in prison, but it's ok when Congress does itThe big difference between the official deficit and standard accounting: Congress exempts itself from including the cost of promised retirement benefits. Yet companies, states and local governments must include retirement commitments in financial statements, as required by federal law and private boards that set accounting rules.
The deficit was $5 trillion last year under those rules. The official number was $1.3 trillion. Liabilities for Social Security, Medicare and other retirement programs rose by $3.7 trillion in 2011, according to government actuaries, but the amount was not registered on the government's books.
The Matrix is a system, Neo. That system is our enemy. But when you're inside, you look around, what do you see? Businessmen, teachers, lawyers, carpenters. The very minds of the people we are trying to save. But until we do, these people are still a part of that system and that makes them our enemy. You have to understand, most of these people are not ready to be unplugged. And many of them are so inured, so hopelessly dependent on the system, that they will fight to protect it.
We would have to be able to sell Treasuries to Martians.
Come check out our message board - Free Speech is always encouraged.
http://speakfreeforum.com/forum/
Step 1: Collect Underpants
Step 2: ...
Step 3: Profit!
Never knew this would really work!
Interesting. But should the future benefits I qualify for by working and paying taxes this year but will not be paid anything of this year count as this year's expenses? I am not retired and receiving any such payments today and could possibly be dead before I collect any of those benefits. Those are potential costs- not realized costs. I MIGHT get the money. Or I might not. If you promise to buy a car from me ten years from now, should you count that as one of your expenses for this year against this year's income? How many years into the future should those potential benefits be extrapolated? If I qualify for say $100 a month for life after age 60 this year (but won't retire for 20 years) and think I may live to 90 and have 35 years to collect, should that count as $1200 (the annual benefit qualified for) or my entire life expectancy? What it will cost will depend on when I retire and how long I live after I retire. How can you calaculate that? Should that potential future cost have to be budgeted out of today's tax revenues when there will also be future tax revenues at that time? Do you take those into account as well or just the expenses side?
Last edited by Zippyjuan; 12-12-2012 at 07:52 PM.
Freedom is a state of mind. Nobody can take that from you unless you let them.
Just because its tricky doesn't mean that the debt obligation isn't there. You don't just say "These trillions and trillions of debt obligations are kind of hard to predict precisely, so we're just going to put a big fat zero on that for our deficit calculations, k?"
Every other company and organization manages to account for these sorts of retirement costs just fine, using GAAP. And in fact all companies and organizations are actually required to account for these sorts of requirement costs. Except for the Federal Government of course.
And by the way, you're right. A lot of these costs won't be realized. The USA will have gone bankrupt, dissolved, or hyperinflated, long before most of these costs come to realization. (I won't ever see a dime of the money I've put in)
Absolutely. At least according to GAAP you should. (Properly amortized and all that, I'm no accountant).If you promise to buy a car from me ten years from now, should you count that as one of your expenses for this year against this year's income?
But they don't even count these numbers in their total debt obligations. The 16 trillion is a fraction of their real debt obligations. Were it any other company, it would be called fraud, but with the FedGov, that's just 'Merica for ya
Last edited by bxm042; 12-12-2012 at 08:44 PM.
The Matrix is a system, Neo. That system is our enemy. But when you're inside, you look around, what do you see? Businessmen, teachers, lawyers, carpenters. The very minds of the people we are trying to save. But until we do, these people are still a part of that system and that makes them our enemy. You have to understand, most of these people are not ready to be unplugged. And many of them are so inured, so hopelessly dependent on the system, that they will fight to protect it.
Sure it worked. It worked perfectly. You had money and now government and big corporations got your money.
YOU-(inflation, taxes)-government-(baliout)-corporations.....
TRANSFER OF WEALTH.
So you gave up on this:
Help with documenting voting rights violations and election fraud abuses!?
Shame. Nothing encourages crime than not punishing it. You are letting them get away with it.FAIL.
I'm becoming increasingly convinced that not only will we see the collapse of the dollar in the next 10 years, but we will also see World War III.
When the central banks around the world start dumping the dollar as a reserve currency... I consider it highly likely that the US will go to war to stop it. We've started wars for much less.
The Matrix is a system, Neo. That system is our enemy. But when you're inside, you look around, what do you see? Businessmen, teachers, lawyers, carpenters. The very minds of the people we are trying to save. But until we do, these people are still a part of that system and that makes them our enemy. You have to understand, most of these people are not ready to be unplugged. And many of them are so inured, so hopelessly dependent on the system, that they will fight to protect it.
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