"Let's just tax the hell outta everybody and get it over with"

[Zippyjuan]

Ron has suggested writing off the portion of the debt the Federal Reserve holds. That is currently about $1.66 trillion or ten percent of our totatal debt. http://www.federalreserve.gov/releases/h41/current/

[Danan]

Partly. I assume he mostly means private sector debt, such as mortgages.

I think the government should be held accountable to it's promises, but I do agree that it must declare bankruptcy. People who loaned the federal government money will obviously have to take some sort of deal and would receive a fraction of what they loaned, but there have to be consequences, just as there are in the private sector.

The financial sector is really damaged and volatile right know, I don't see how it could survive a souverign debt crisis. And a complete collapse of the entire banking sector would obviously be devastating (no more pensions, insurances, money in deposits, savings, and on the other hand no more needed private sector loans).

But really I don't know if it's better to carry that debt around forever, causing lost decades (or even centuries...) like in Japan.

[Danan]

Ron has suggested writing off the portion of the debt the Federal Reserve holds. That is currently about $1.66 trillion or ten percent of our totatal debt. http://www.federalreserve.gov/releases/h41/current/

Yeah but is currently accounted against other liabilities of the Fed, which could cause trouble.

[juleswin]

Yes, rob everybody of even more of their money and give it to the government so they can murder more people abroad, cage more people at home, and destroy the economy even more. Great idea!

This is going to be even worse. Everybody pays in 40% which is far more than they are already paying in and then get a whole lot less. At that point even the begger on the street would be talking about revolution and that is the reason why they would never ever in a million years do it.

[Fox McCloud]

You can never tax enough to pay off the debt or reduce our deficit; we could abolish the government today and have SS+MEdicare+Medicaid run by an almighty self-sustaining AI and we'd still have deficit and continue to rack up debt.

Also if you choose to raise taxes, at some point it'll start affecting investment/etc. and net wealth will fall so the higher tax rate has a net zero or effect (or worse, negative).

[lx43]

Partly. I assume he mostly means private sector debt, such as mortgages.

I think the government should be held accountable to it's promises, but I do agree that it must declare bankruptcy. People who loaned the federal government money will obviously have to take some sort of deal and would receive a fraction of what they loaned, but there have to be consequences, just as there are in the private sector.

It would be great to have the majority of federal government assets repossessed by creditors. That, at least, would put hundreds of billions of dollars of assets (land, buildings, vehicles, precious metals, etc) back into the private sector where they can be put into much better use. It would also reduce the federal government's power and it would certainly increase caution when loaning to the federal government.

I'm fine with the govt auctioning off its assets to pay off what it can to debt holders, but after that the rest of the debt that can't be paid needs to be written off.

[Confederate]

I'm fine with the govt auctioning off its assets to pay off what it can to debt holders, but after that the rest of the debt that can't be paid needs to be written off.

Obviously the federal government's assets are not enough to pay the debt in full, which is why creditors will have to take a deal or get nothing. It'll be something like get 30 cents on the dollar or nothing at all.

[Danke]

Obviously the federal government's assets are not enough to pay the debt in full, which is why creditors will have to take a deal or get nothing. It'll be something like get 30 cents on the dollar or nothing at all.

With all the land, buildings etc. that the Feds own, are you sure? What do you think about http://cafr1.com/?

[seraphson]

Correct me if I'm wrong but if we have $0 debt with our current monetary system we essentially have near zero money (minus hard assets)?

[HigherVision]

This bimbo thinks paying off the debt is the way will solve all our problems.

I've seen her show before, she's not a bimbo. What she's getting at is that taxing everyone the full extent it would take to pay off the debt would show them just how expensive big government actually is. It would force the middle class to get over their 'soak the rich' fetish that's motivated by envy.