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08/29/2010

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Joshua Norman

@ M Hoffman

Did you know you shared the same first initial and last name as Michael Hoffman the Holocaust denier?

Jewish bankers & trillion dollars for wars for Israel? I think you forgot to take your meds today. Please put your tinfoil hat back on so they won't scan your brain waves, though I think you lack the proper equipment for them to do that.
Plus no one forced El Republicano Caudillo El Presidente Jorge Wahhabi Bush to invade Afghanistan or Iraq. Presidente Bush was El Decidir. I think he did it because he didn't want to invade Saudi Arabia, a country where his family has ties to and the country when 15 out of the 19 hijackers hailed from. As for Israel's "foreign aid" Israel only receives $2.3 billion annually and they have to use it to buy weapons from American contractors. That's not fair, given the opportunity Israel could learn to blow as much on their military industrial complex as the US does instead of having to spend it in America. BTW I oppose foreign aid, even for democratic allies like Israel. I oppose it for Israel because the US has too much leverage over Israel if Israel turned down military aid the US can't tell them to surrender land.

If only there was an ounce of truth in your ranting, maybe then Israel wouldn't have to deal with Barack Hussein Obama, the long-legged Muslim Mack Daddy trying to get Israel to surrender to the Arab Muslim Nazis.

James Morgan - Puritan Financial Advisor

The political resistance is too intense. It’s at that point that the bondholders, and holders of other contractual rights against the government, have to start worrying about the prospects for outright default or default through inflation. These are possibilities in our future, just as in the future of Greece.

Henri Labelle

Thanks a lot for this very complete article! I agree with your position.

Douglas Levene

Judge Posner's analysis is trenchant as usual.

A question he does not address is what happens if a state is insolvent. States cannot print more money so they can't inflate their way out of debt. There is no legal process in place for the adjustment of debts owed by a state and it's far from clear that creditors could levy on state-owned assets to pay off defaulted state debt. Can a state constitutionally enact legislation providing for all state debts to be reduced proportionately as part of restructuring of state obligations? Who knows? I suppose a defaulting state would end up like Argentina when it went bust, unable to borrow any money at all, and living solely on the proceeds of state taxes and the generosity of the taxpayers of the other states via the Federal government, until such time as it could negotiate a voluntary restructuring with the debt-holders.

mba

Interesting article. You make some good points. Thank you again.

sevisme

I live by the assumption that the answer is yes.

Debt Advice

Good info, I do think they are currently like paper trying to wrap over fire right now. You sure can't hide it!

william Hayes

I agree with Becker that, policies which promote investments in total factor productivity growth produce long-term economic growth. Still, everyone always ignores relative ROI. What if, as history suggests, the ROI on government 'investment' and spending is much lower than that of private sector or, more markedly, venture capital investment? If that is the case, than any government policy which 'increases TFP growth and long term economic growth' actually decreases it relative to hypothetical private sector base line. This, for the future is impossible to prove, but the vast preponderance of historical data suggests that it is the case, including detailed recent studies by Harvard Professor Dr. Lerner

Alex

Deficits are not a problem. They can be simply wiped out through international cooperation.

If governments worldwide simply start taking a lot of money from highly productive people, wealthy savers and investors and then distribute it to average people then …

You simply have the curious phenomenon whereby all of humanity all of a sudden starts being able to afford and enjoy a lot more goods and services without humanity actually having to produce more goods and services. Voila! The perpetual machine of prosperity! If we could only believe in “hope and change” it would actually be possible…
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Patrick Oegerle

Is the U.S. Government really unlikely to inflate its currency?

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I agree is lack of confidence, lowering standard of living and social disintegration. Not to mention inability to execute foreign policy. One consequence of any remedial choices considered will be everyone being equally poor. Finally the equalitarians will have what they want. Even worse, because of their inability to monetize debt, the cities. I do fear that we are attempting to over-leverage whatever governmental or public equity we have. I also doubt that the market for federal debt is so irrational and/or inefficient that the Treasury can continue to issue mountains of debt at low interest rates unless investors recognize the the federal government is not insolvent.

Arjun

@Alvin-what are the other 2 blogs you read,Sir?Thanks.

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den


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and for goods and services. Monetizing the debt will occur in any event. Who now benefits from this "economy"? The Jewish bankers and Federal Reserve banks who control the "money supply". Recently the Fed has been purchasing treasury debt in large quantities. This is a no lose proposition since the money which the government could create at nominal cost is instead "borrowed" from the Fed which also creates the "money" at nominal cost. Can the banker in Monopoly go

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