We never had to do tariffs to alleviate our debt

We never had to do tariffs to alleviate our debt.

All we had to do was tax the rich and corporations more to service our debt to acceptable levels.

Didn't "have" to

Glad you have moved on to bargaining. Acceptance soon

Wait until you figure out that there's no real accounting need to offer bonds at interest in the first place. Or that the national debt is something to be particularly concerned with.

They would literally rather starve to death than admit trickle down doesn’t work holy kek

tax the rich

Doesn't work. This is the peebrain solution of underdeveloped brains. The Ultra wealthy simply go elsewhere. First they put their money outside of taxable boundries, if that doesn't work they leave. Simple as. They will ALWAYS avoid those taxes. Not that it would fix the world anyway.

Another thing to remember is that the government creates money. The government could very well just give you money that you want to tax from the rich. Would that cause inflation? Yes. How much? I don't know. Depends on how aggressively you tax consumption and how much current private debt is paid down (money destroyed) and future demand for consumer credit declines.

How does trickle down "not work"?
What is the alternative?
How does that alternative work better?

We actually needed to do nothing. Nothing could have been done and there would have not been a problem.

Don't forget that if you included the services trade surplus, the deficit isn't even that big. Internal changes completely within the US could have fixed it. Orange man got too greedy and thinks he can buy out the rest of the world for pennies. This has become purely a game of chicken against everyone in all directions at the same time. The only thing for sure is this is gonna hurt ordinary folks like (You) and (Me)...

Alternatives could be jobs guarantees like FDR wanted or like they did in Argentina in the early to mid-2000s. MITI-style credit guidance windows. Heavily subsidized or free healthcare and education. Universal basic income/helicopter money/negative income tax/national dividend. Some combination of all of the above.

What the hell do you people think we'll do if we literally stop producing everything and just give everyone 1k a month?

You can't live anywhere on $1k a month. And if anything, it could free a lot of people up to move somewhere else or get into a different line of work instead of whatever they are doing to make ends meet now. You're just very badly misinformed.

I'm sorry. Have you ever taken a class on economics? Even econ 101?

A department inside the state issues money, then three different levels of state (not that department) collect that money in order to spend it. State, city, county, do not issiues currency. A branch of the federal does. The federal also collects money to spend. All levels of government do in fact spend money.

tax the rich and corporations

they move away from your country

THERE WAS NOTHING I COULD DO DOOD

You are misinformed

Where did you get your econ degree? Vaush or reddit?

The debt ceiling is political theater. There are self-imposed legal restrictions, that don't follow any law of accounting. But what is actually happening is that the government has net credited bank reserves the moment it spends a deficit. That money is already there. So bond sales drain excess reserves. It's an asset swap. Non-interest bearing debt for interest-bearing debt.

They would literally rather starve to death than admit trickle down doesn’t work holy kek

Yes. It is insane to watch.

Lower order governments do collect taxes for revenue because they don't issue money. The federal government spends then taxes. This is why there are deficits. They spend more than they take out because they don't need your tax money to fund things. Taxes are about managing inflation, redistributing income, and modifying behavior. Of course, the government could take over the role of funding states, but there are reasons why individual states wouldn't want that.

Show me the links. As it stands the government spends out of its treasury general account which is held at the federal reserve and needs reserves to spend which can be raised via bond sales. Post the links proving otherwise or you’re wrong.

Brown hands typed this.

Think this through logically -- why would the government need to raise money through bond sales?

What does it accept as payment for bond sales? Yen? Deutschmarks? No. It only accepts US dollars. Where do dollars come from? The government. It only accepts its own debt! Reserves left over from the government spending more than it takes in through taxation!

They DO need our tax money to fund things. Contrary to popular belief, they can't just print all the money they need and use that because that would cause extreme currency depreciation and hyperinflation

Trickle down doesn't work because of wealth accumulation at the very top and the fantasy of infinite growth needed to make shareholders happy. The solution is raising the minimum wage by limiting CEO income.

where do the dollars come from? The government

Wrong lol they come from the federal reserve accounts of member banks buying the bonds transferring it to treasury general account.

I agree they contain the CAPABILITY to spend money freely, but that would take a vote to change the federal reserve and treasury system from congress, so until that happens you are wrong.

Wrong lol they come from the federal reserve accounts of member banks

And where do they get it from? You're not thinking logically.

Bond sales aren't fiscal policy, they are monetary policy. They are trying to hit an overnight interest rate target, draining reserves from the system. It's right in front of your face.

It has nothing to do with growth or people having too much money. Wealth is not zero sum. It's something you create, not something that people need a portion of. Minimum wage is one of the things that destroyed this country.

Let the market decide the value of labor. When the state does it, or if you have a union of people doing it (same as the state in a democracy) you end up over valuing your labor and it just leaves. Then you have to rely on welfare (if you're lucky enough to live in a welfare state) or (ironically) move to find work.

From the federal reserve themselves conducting open market operations, of which treasuries are some collateral acceptable yes but so are other municipal and mortgage securities. Additionally reserves can be transferred freely for any reason, meaning consumer borrowing and payments can impact this. Additionally cash counts as reserves and can be deposited.

Yes, if they literally never took any taxes that would eventually happen, assuming that the supply of goods did not keep pace.

From the federal reserve themselves conducting open market operations

Right -- they are putting reserves back in after draining them. The origin point for dollars is government. Sorry.

Wrong, completely. If it was the policy of the government to use bonds to control the overnight rate then there would be no need for QE, as the government could simply issue less bonds to reach the rates they want. This is a nonsensical thought on your end.

‘Producer’ and ‘consumer’ are parties to a given transaction, not classes. Workers are labor producers, companies are labor consumers etc.

Tariffs will be passed on as much as possible, just as corporate taxes, sales taxes, income taxes and payroll taxes are passed through as much as possible. Key words there: as much as possible. In a market with elasticity SOME of any tax will come from pinched margins, and in the case of tariffs some of the cost will also be eaten by foreign debasement.

Over 80% of fed tax revenue comes from taxes on labor producers (income, payroll taxes), whose margins are currently being pinched? Workers.

Broad tariffs ARE a tax on corporations and the rich, as they are effectively a national sales tax on imports, corporate margins are reduced, the stock market sell-off was pricing-in reduced profit margins.

Incorrect though, the federal governments monetary needs are secondary to the federal reserves needs of sustainable currency issuance. Reserves are created by either private or federal government borrowing. You’re far oversimplifying the bond auction process and flow to hit a point that just isn’t there to make. Sorry.

QE was about recapitalizing banks. The Fed swapped reserves for securities.

Wealth IS a zero sum game. The fact that the opposite is argued is the reason America is in this mess. Inflation goes up but wages stay the same, rich people get richer while the QoL of the middle class goes down the drain. Millennials and zoomers have to work more hours and generate more productivity than their boomer and Xexer parents yet they will never be able to buy a house or raise a family on one income.

Tariffs are a tax on the middle class because corporations will just raise the prices and pass the tariff to the consumer. It's absurd to think otherwise.

the fed swapped reserves for securities

Like it already did in open market operations to support their limited reserves policy you mean lol

The government does not need to borrow. Maybe you have a dog in this hunt, I don't know. The issuer of a currency can't borrow its own currency.

the issuer of the currency can’t borrow its own currency

I’m sorry but you’re completely wrong and I’ve proved it to you time and time again. I can link you directly to the federal reserve if you like, the government has voted that it MUST spend out of the treasury general account which MUST have reserves in it which are not conjured out of thin air but created from payment transfers of tax into the treasury general account and sales of bonds into the treasury general account.

Right, but QE is done on a larger scale and typically involves longer term securities. They are targeting a low interest rate. Of course, the Fed is a monopoly so if they want a low, zero, or near-zero interest rate policy they can just set one like the BoJ did.

These are self-imposed mechanisms, presumably to give the appearance of "fiscal responsibility", but more likely to support already very wealthy people with guaranteed returns.

When the government spends a deficit, it has net credited bank reserves. The money is in the system. So bonds are issued with the idea that they are sidelining the money and taking it out of circulation, it's monetary policy. The government could just leave those reserves in the system. Or, were it not for legal restrictions, the central bank itself could just buy them on the primary market.

Sure, I don’t disagree the scale and intended effects of QE was different than standard OMO. But they’re the same exact mechanism, the federal reserve was (is) already swapping securities for reserves because that is how reserves are created or destroyed in modern U.S. banking. Treasuries are beholden to overnight rates dictated by the federal reserves OMO’s, the federal government does not release debt on a schedule to manipulate overnight rates, that is nonsensical as the government structures its debt needs around its spending needs, and the federal reserve manipulates the overnight rates to ensure the governments spending currency remains stable.

Treasuries are beholden to overnight interest rates

Yes, technically in this system because they are required by law to issue bonds to "cover" deficits so they have to respond to a market or otherwise people wouldn't purchase them. But the Treasury is also a monopoly and could theoretically set its yields at whatever it wanted.

these are self imposed mechanisms

Sure, in the same way our elections are self imposed. Until we vote away elections they still occur, same way until we vote away the treasury and fed functions the government will need to balance its treasury general account.

The money is in the system. So bonds are issued with the idea that they are sidelining the money and taking it out of circulation, it's monetary policy. The government could just leave those reserves in the system. Or, were it not for legal restrictions, the central bank itself could just buy them on the primary market.

The government “leaving the reserves in the system” is called not issuing bonds, they need to issue bonds to balance their spending so you’re just plainly wrong. The central bank does buy reserves on the open market, for example the RRP is one great example of a fed facility that takes bank reserves out of the system and puts assets into it in exchange. So multiple scenarios right there on how you’re wrong.

technically

could theoretically set its yields to whatever it wants

You mean accurately? How you think it SHOULD work is worth dogshit, how it does work is that the treasury must spend money from the treasury general account which must raise money via taxes or bonds or other misc payment transfers from Fed member banks. The treasury absolutely can set the rate on treasury’s to whatever it wants, as long as it matches the supply demand curve in the market for that rate given they can’t just wish money into their fed account.

Accounts are net credited first. Government spends first. They do not wait for bonds to be issued. Then they are bound by law to issue these bonds to "cover" a deficit (that they already paid out). It's an asset swap.

Just tax the most economically mobile people in society lmao xD

Again, send link. I could believe this, but I’ll bet there’s caveats to ensure the treasury general account is not “overdrafted” at the Fed you’re not taking into consideration. And needing to shore up the treasury account after spending /=/ treasury can set bond rates at whatever it wants.

That's what asset seizures, bank accounmt freezing and no fly lists are for bud

but I'll bet there's caveats to ensure the treasury general account is not "overdrafted"

You're right -- they make the Treasury rely on issuing bonds. They also have tax and loan accounts at member banks they can dip into.

As for the rates, the Treasury could just come out and set it at 0%, but would you buy it? These are al legal constraints to theoretically separate monetary and fiscal policy. A lot of it seems left over from the gold standard, frankly.

they need to issue bonds to balance their spending so you’re just plainly wrong. The central bank does buy reserves on the open market

Yes, they are legally required to "cover" a deficit by issuing bonds. And the central bank's open market operations buy securities on the secondary market, not the primary market.

the central bank operations buy securities on the secondary market

OMO’s where the central bank buys back reserves buys them from primary dealers off the secondary market. Your complaint was that the central bank cannot draw down reserves, you’re wrong they literally can buy reserves on the open market. That has nothing to do with buying assets.

Oh it deleted my response to this darn.

You're right -- they make the Treasury rely on issuing bonds. They also have tax and loan accounts at member banks they can dip into.

Your arguments really fucking incoherent, we agree they need to release bonds, if you’re arguing they don’t need to because they spend the money before they create then I want links, as contemporary account balancing thought for federal reserve accounting standards is you can’t spend reserves that don’t exist. Proof of burden is on you conspiracy boy, I want PROOF that the treasury general can be overdrafted. If they have to issue bonds, when do they? At what level of overdraft must they? How much will they need to sell? Until then this sounds incoherent and like you’re arguing the government can print money when literally all the facts say they cannot and only the Fed can.