> And the US extending its self imposed credit limit is completely reasonable. In that the alternative, which would be actually defaulting on debt obligations, salaries, and other ways that we have already promised, which be absolutely catastrophic. The US has never defaulted on its debt.
There is another option: the US could cut spending.
In a refinance, you either (1) keep the same principal and adjust the rate or (2) take out a new loan for a greater amount than the former, using the new loan to pay off the former.
The US is not doing (1). Maybe you could argue that it's doing (2). But there is a key difference: the US is the only debter that can print its own cash. Hence why I think it's more appropriate to compare it to a credit card borrower that just keeps increasing the limit, using the new money to pay the interest.
The gov doesn't produce anything. It can only tax. The more it taxes, the less capital the private sector retains to produce. The less money the private sector has to produce, the lower the gdp. The US is not only devaluing it's currency by increasing the debt and then not taxing to pay it off (though here the devaluation acts as an indirect tax), but it's actively dampening the value of the underlying collateral. These things typically don't happen with refinances. I do not understand why anyone is still buying US treasuries.
Speaking of refinances, it would have been wise of the US to actually refinance its existing debt while rates were at historic lows and the existing debt had short maturity timelines, but Yellen didn't do that. Instead she ignored refinancing it to 30 years and kept it on deck to mature, forcing it to be refinanced at rates more than double what it was.
I argue that the US has defacto defaulted on its debt by devaluing the underlying collateral. No other entity gets to decide to pay back its loan by willfully deciding to pay less. Though there is some benefit to private borrowers, as the devaluation also means that private principal balances are worth less in real terms.
> Our stability, predictability, and safety is what makes us a world reserve currency. Our court system is one of the most important parts of that as well.
I'm interested in a source or your reasoning here. We aren't the only country with a western court system, and our Supreme Court routinely refuses to strike down unconstitutional laws (Medicare, social security, etc.).
You need a consistent, non-corrupt court system, but also lots of wealth. The British pound lost it's status as the world reserve currency simply because the British economy collapsed and they didn't have enough resources to back up a currency not backed by gold.
As for social security and such not being constitutional, that strikes me as sovereign citizen, "taxes are voluntary" nonsense.
> As for social security and such not being constitutional, that strikes me as sovereign citizen, "taxes are voluntary" nonsense.
Article 1 Section 8 clearly enumerates the powers of the federal government. Nowhere is it granted the power to provide welfare of any kind. Nowhere is it granted the power to provide medical goods and services. Nowhere is it enumerated the power to provide educational funding. Nowhere is it enumerated the power to set federal minimum wages.
The very first sentence of section 8: "The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States"
If education and welfare programs aren't "general welfare", I don't know what is.
Your comment reads like a trump legal filing. Literally citing cases that disprove your point.
You stopped short. You quoted the first paragraph but not the the supporting clauses. In fact, that preamble then goes into enumerating the specific federal powers.
If it was enough to say that taxes, duties, and excises could be levied and collected to pay for "common defense and general welfare", Section 8 would conclude with that sentence. There would be no need to follow that with explicit ennumerations.
Furthermore, we have a federalist government wherein we have a federal government with limited power. 10A wouldn't exist if this wasn't the case. Allowing the federal gov to tax for "general welfare" gives it unlimited power, which contradicts the very structure of the government.
Proper intro to S1A8:
"""
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow money on the credit of the United States;
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;
There is another option: the US could cut spending.
In a refinance, you either (1) keep the same principal and adjust the rate or (2) take out a new loan for a greater amount than the former, using the new loan to pay off the former.
The US is not doing (1). Maybe you could argue that it's doing (2). But there is a key difference: the US is the only debter that can print its own cash. Hence why I think it's more appropriate to compare it to a credit card borrower that just keeps increasing the limit, using the new money to pay the interest.
The gov doesn't produce anything. It can only tax. The more it taxes, the less capital the private sector retains to produce. The less money the private sector has to produce, the lower the gdp. The US is not only devaluing it's currency by increasing the debt and then not taxing to pay it off (though here the devaluation acts as an indirect tax), but it's actively dampening the value of the underlying collateral. These things typically don't happen with refinances. I do not understand why anyone is still buying US treasuries.
Speaking of refinances, it would have been wise of the US to actually refinance its existing debt while rates were at historic lows and the existing debt had short maturity timelines, but Yellen didn't do that. Instead she ignored refinancing it to 30 years and kept it on deck to mature, forcing it to be refinanced at rates more than double what it was.
I argue that the US has defacto defaulted on its debt by devaluing the underlying collateral. No other entity gets to decide to pay back its loan by willfully deciding to pay less. Though there is some benefit to private borrowers, as the devaluation also means that private principal balances are worth less in real terms.
> Our stability, predictability, and safety is what makes us a world reserve currency. Our court system is one of the most important parts of that as well.
I'm interested in a source or your reasoning here. We aren't the only country with a western court system, and our Supreme Court routinely refuses to strike down unconstitutional laws (Medicare, social security, etc.).