US deficit continues to fall

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http://www.npr.org/blogs/thetwo-way/2014/10/15/356428818/u-s-budget-deficit-falls-to-pre-recession-levels

They are keeping interest rates very low, and consequently the deficit is much less (less interest to pay on the debt).

It is not clear how they can get out this situation. If rates go back to say 6%, then that is 500 billion more in interest to pay per year.

This is the result of the privately owned Federal Reserve buying (and monetizing; AKA "nationalizing" or "socializing") U.S. government debt for the last several years.

NYTIMES.COM: "No Surprise, Fed Was Biggest Buyer of Treasuries in 2013" (February 21, 2014)
http://www.nytimes.com/2014/02/22/busin ... -2013.html

RT.COM: "US Fed slashes debt purchases by another $10 bn" (January 29, 2014)
http://www.rt.com/business/fed-bonds-purchases-cut-367

CNS.COM: "Fed's Ownership of US Debt Breaks $2T for First Time" (August 19, 2013)
http://www.cnsnews.com/news/article/200 ... first-time

CNS.COM: "Fed Has Bought More U.S. Gov?t Debt This Year Than Treasury Has Issued" (February 7, 2013)
http://www.cnsnews.com/news/article/fed ... has-issued

BLOOMBERG.COM: "Treasury Scarcity to Grow as Fed Buys 90% of New Bonds" (December 3, 2012)
http://www.bloomberg.com/news/2012-12-0 ... bonds.html

MONEYNEWS.COM: "WSJ: Fed Buying 61 Percent of US Debt" (March 28, 2012)
http://www.moneynews.com/Headline/fed-d ... /id/434106

The risks involved in doing this are serious:

LEARNING MARKETS.COM: "Risks of Monetizing the U.S. Government Debt" (Undated)
http://www.learningmarkets.com/risks-of ... nment-debt

During the last decade the government has inflated away most of its debt.

Yep, and anyone who uses the U.S. dollar worldwide ended up paying more to get the U.S. government out of debt. For U.S. citizens that means we paid once (by taxation) and again (by socialized dollar inflation which deflated each dollar's value). Nice scam if you can get it.

This is just the price of gold going up and down. Just about every country would have a similar graph if you compare the debt (in their currency) to gold.

Well, you have to pay for the free lunch one way or the other. If people don't want to pay more in taxes, the government has to find other ways.

In a nation with an honest government, it would be that simple. But, in the United States, at least, it is compounded with the corruption of public servants who have admitted or been discovered to have transfered U.S. wealth to themselves or others. If U.S. Secretary of Defense Donald Rumsfeld, and his successors, never "tracked" let alone researched the infamous "$2.3 trillion in transactions" http://www.defense.gov/speeches/speech. ... eechid=430 in defense spending that he admitted on Sept. 10, 2001, can you imagine lesser amounts (worth hundreds of billions of dollars) of missing funds getting more scrutiny from that or any other U.S. government agency? Instead, the missing funds get added to the pile of cash that the Federal Reserve monetizes, and nobody gets convicted, let alone questioned.

I'm not into conspiracy theories.

Er, no. That only influences the cost of present borrowing (in turn influencing future expenditure on servicing the debt), not the size of the deficit (present expenditure - present income).
Surely it's just the result of the US economy growing? After all, it's normal for deficits to rise during a recession and fall when the economy grows.

According to the simplified explanations provided by Wikipedia.org https://en.wikipedia.org/wiki/Monetizat ... _inflation about monetization, "[w]hen governments intentionally [monetize debt], they devalue existing stockpiles of fixed income cash flows of anyone who is holding assets based in that currency. [...] A deficit can be the source of sustained inflation only if it is persistent rather than temporary, and if the government finances it by creating money (through monetizing the debt), rather than leaving bonds in the hands of the public."

Isn't this essentially what I wrote?

It's a result of public investing by means of borrowing. It's been going on since the dawn of nations and it's a standard practice, the addition of the Federal Reserve doesn't change much is anything at all.

If your car breaks down and you don't have the income to fix it, do you:
A) walk to work until you can save for repairs.
B) Cut spending in the household budget.
C) Borrow the money with the promise to pay it back.



To clarify, it's the price of gold fluxuating combined with the debt going up. It's a meaningless chart.

The idea that gold and currency share a direct relationship(or should share one) is absurd.
1. It's not possible for modern economies to backed by gold because of the shear size of the world economies relative to the amount of gold.
2. Because of 1, the value of gold would rise drastically(deflation) leading to hording, leading to ever higher value, and eventually collapse. It's why we no longer have a gold standard, it's a failed experiment.
3. Gold's value is almost as abstract as paper money. Only about 10% of gold is used in industry. The rest of it use is jewelry and gold 'investments.'

No. Expanding the money supply leading to higher inflation =/= falling deficits.

Nothing, not even reality, facts and truth, will compel Conservatives to admit that anything Obama does is helping this country, yet they will cry that EVERYTHING he does is hurting this country. If there were ever to be acknowledged a true conspiracy in the history of this country, the concentrated effort to downplay, c*ck block, sabotage, discredit and slander this POTUS will rank number one with a bullet. It wouldn't surprise me if a bullet were not the exclamation point on the event, since they are failing miserably at impeding progress, despite the obstacles listed above, and the perpetual state of denial and excuse making of his haters.

I believe that is a despicable description of people who are nothing more than your political opponents. In case your words were intended to include me, I will state it obviously, I am neither a Democrat nor a Republican. I am, in my state, registered as an unaffiliated voter. I laugh at all political parties and coinsider them to be corrupt in ways that the Mafia could only envy. It is statements like these that forced me, and continue to force many others, to leave their partisan affiliations http://www.wvmetronews.com/2014/07/08/d ... ud-numbers http://www.ncoc.net/Voters-leaving-Repu ... -in-droves and vote for the constitution and its liberties. For those candidates who agree with me, I will support them. Otherwise, I have no use for them.

But, I wouldn't dare insult them as unindicted assassins with such a statement as yours. Clean up your act.

The comments are not directed at anyone in WP but rather at the strategists who have made id openly known that their number one objective has nothing to do with making America a better place, improving the economy, creating jobs, addressing poverty, or any other of the actual important issues of our day. Their number one objective, abo anything else, including the improvement of life for Americans, is to discredit and block everything and anything associated with Obama. McConnell has stated this fact on many occasions. It is a blinding, hate filled obsession to destroy Obama that is destroying America.

I find what these obstructionists are doing to America as "despicable"

Good gravy, the way people in this forum are fixated on terminology and the demand to censor everyone down to writing at the level of a preschooler training on the "Hooked on Phonics" toddler set, I don't even know how people here ever managed to learn to read in the first place. Is there any word or term you don't find offensive or despicable? Do I need to start posting using one syllable words and nine word paragraphs just to appease people who seem to have extremely limited vocabularies and experience with the English language? Do people who oppose Obama only read books about Dr. Seuss or Gumby? Did you find the same reasons to whine when reading Ayn Rand books?

I am growing weary of the tag team mind game assaults launched against me but I wont run to a moderator and squeal for intervention like people do to me. Do you have any understanding of the concept of fairness. This is not a game of cleverness. People here see through what is going on. None of these little mind games are over my head. I find these things juvenile and childish. Behave like grown, educated adults please and stop insisting that anyone who says something you disagree with has to use the vocabulary of 6 year old children.