IDBillzFan Posted November 29, 2011 Share Posted November 29, 2011 Because they didn't opt to not increase spending, they opted to not increase the country's credit limit. Those are, in fact, not the same thing - the way the budget process works, the money was already "spent" (i.e. allocated to an expenditure), it just didn't exist "yet". Akin to buying a new stove on credit, because even though you don't have $600 cash now, you know you can take $150 out of each of your next four paychecks for it. And, as it turns out, the government needs to float some sort of debt. At least short-term, since tax receipts are net 90 to the best of my recollection (at least mine were, when I had a business), but the government pays out on net 30. Which is not saying the government's financing isn't stupid...just a completely different kind of stupid than you're implying. Understood. My small point was more about the idea that I tire of the excuse that criticism is warranted primarily because they didn't do what has been done for all these years. I really hate that kind of rationale. But apparently it sells books. Link to comment Share on other sites More sharing options...
DC Tom Posted November 29, 2011 Share Posted November 29, 2011 Understood. My small point was more about the idea that I tire of the excuse that criticism is warranted primarily because they didn't do what has been done for all these years. I really hate that kind of rationale. But apparently it sells books. Well, I'm with you there. "But they didn't do the same thing they've always done!" That's not criticism...look where "same as always" has got us. Link to comment Share on other sites More sharing options...
TPS Posted November 29, 2011 Author Share Posted November 29, 2011 Because they didn't opt to not increase spending, they opted to not increase the country's credit limit. Those are, in fact, not the same thing - the way the budget process works, the money was already "spent" (i.e. allocated to an expenditure), it just didn't exist "yet". Akin to buying a new stove on credit, because even though you don't have $600 cash now, you know you can take $150 out of each of your next four paychecks for it. And, as it turns out, the government needs to float some sort of debt. At least short-term, since tax receipts are net 90 to the best of my recollection (at least mine were, when I had a business), but the government pays out on net 30. Which is not saying the government's financing isn't stupid...just a completely different kind of stupid than you're implying. There are always tax receipts coming in, but the quarterly business payments create a blip. The Treasury has a daily target ($5 bil. I believe) it keeps on account at fed banks, the remainder is held in formal accounts with private banks. Some portion of tax receipts go to fed, but most are sent to the private accounts. Bond sales also go to those private accounts. Treasury works with fed to transfer funds from those accounts when needed. As a matter of procedure, the government "spends" from its account at the Fed by crediting a bank account which increases bank reserves. The bank then would purchase an interest bearing government security with those reserves. It's almost as if government spending creates the funds (reserves) necessary to finance itself.... Link to comment Share on other sites More sharing options...
3rdnlng Posted November 29, 2011 Share Posted November 29, 2011 The state of politics in the State of New York going back in time 3 years. Reprehensible. Link to comment Share on other sites More sharing options...
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