Comments on: Where’s the Debt? http://www.coyoteblog.com/coyote_blog/2006/12/wheres_the_debt.html Dispatches from a Small Business Sun, 12 Feb 2012 09:39:47 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: BlacquesJacquesShellacques http://www.coyoteblog.com/coyote_blog/2006/12/wheres_the_debt.html/comment-page-1#comment-4197 BlacquesJacquesShellacques Wed, 06 Dec 2006 03:08:15 +0000 http://coyote-blog.com/wordpress/2006/12/wheres_the_debt.html#comment-4197 <p>A comedy in three steps:</p> <p>Chiang Kai Shek: Joe, I'm the Chinese repo man come to get your TV or seize your land.</p> <p>Joe: (After 3-5 years of legal wrangling, seizure exemptions, bankruptcy, stays of execution, appeals, relief from forfeiture etc etc) OK, go ahead, take the land, here's the deed.</p> <p>State and Federal Tax Assessors: Chiang, did we mention non-resident taxes? And all the tax arrears? Yes they're both very high. We need the money to look after Joe.</p> <p>I used to practice law in Canada. I have tried to seize assets, including land, from American debtors. Ha. Ha. What fun.</p> <p>The absolute and only thing the Chinese can do with the money is "Buy American". Or burn it, I suppose.</p> <p>Every lawyer knows that when debt reaches a certain level your banker becomes your partner.</p> <p>Howdy partner, Chiang.</p> A comedy in three steps:

Chiang Kai Shek: Joe, I’m the Chinese repo man come to get your TV or seize your land.

Joe: (After 3-5 years of legal wrangling, seizure exemptions, bankruptcy, stays of execution, appeals, relief from forfeiture etc etc) OK, go ahead, take the land, here’s the deed.

State and Federal Tax Assessors: Chiang, did we mention non-resident taxes? And all the tax arrears? Yes they’re both very high. We need the money to look after Joe.

I used to practice law in Canada. I have tried to seize assets, including land, from American debtors. Ha. Ha. What fun.

The absolute and only thing the Chinese can do with the money is “Buy American”. Or burn it, I suppose.

Every lawyer knows that when debt reaches a certain level your banker becomes your partner.

Howdy partner, Chiang.

]]> By: Bill http://www.coyoteblog.com/coyote_blog/2006/12/wheres_the_debt.html/comment-page-1#comment-4196 Bill Tue, 05 Dec 2006 20:41:20 +0000 http://coyote-blog.com/wordpress/2006/12/wheres_the_debt.html#comment-4196 <p>Wow. The second sentence of the post states that, "It's a mistake... to confuse the trade deficit with a debt," the second commenter expands on this point, and Peter still manages to screw it up. </p> Wow. The second sentence of the post states that, “It’s a mistake… to confuse the trade deficit with a debt,” the second commenter expands on this point, and Peter still manages to screw it up.

]]> By: Ultima Ratio http://www.coyoteblog.com/coyote_blog/2006/12/wheres_the_debt.html/comment-page-1#comment-4195 Ultima Ratio Tue, 05 Dec 2006 18:01:54 +0000 http://coyote-blog.com/wordpress/2006/12/wheres_the_debt.html#comment-4195 <p>You'll be pleased to know that your website is the 2nd Google result for "Lou Dobbs trade deficit" (a simpering Mother Jones interview being the first).</p> You’ll be pleased to know that your website is the 2nd Google result for “Lou Dobbs trade deficit” (a simpering Mother Jones interview being the first).

]]> By: Peter Duray-Bito http://www.coyoteblog.com/coyote_blog/2006/12/wheres_the_debt.html/comment-page-1#comment-4194 Peter Duray-Bito Tue, 05 Dec 2006 02:22:06 +0000 http://coyote-blog.com/wordpress/2006/12/wheres_the_debt.html#comment-4194 <p>Chris, Joe's money for the TV comes from the money he's borrowed against his home. This money comes from Treasuries our government sells to the Chinese. The Chinese claim against the U.S. bonds they own ultimately is Joe's house.</p> <p>Reality check.</p> Chris, Joe’s money for the TV comes from the money he’s borrowed against his home. This money comes from Treasuries our government sells to the Chinese. The Chinese claim against the U.S. bonds they own ultimately is Joe’s house.

Reality check.

]]> By: Chris http://www.coyoteblog.com/coyote_blog/2006/12/wheres_the_debt.html/comment-page-1#comment-4193 Chris Tue, 05 Dec 2006 01:18:03 +0000 http://coyote-blog.com/wordpress/2006/12/wheres_the_debt.html#comment-4193 <p>Peter - Joe isn't borrowing from China to buy the TVs - thats the whole point, there is no debt. Joe gets a TV, China gets an appropriate amount of currency.</p> Peter – Joe isn’t borrowing from China to buy the TVs – thats the whole point, there is no debt. Joe gets a TV, China gets an appropriate amount of currency.

]]> By: Peter Duray-Bito http://www.coyoteblog.com/coyote_blog/2006/12/wheres_the_debt.html/comment-page-1#comment-4192 Peter Duray-Bito Mon, 04 Dec 2006 23:16:16 +0000 http://coyote-blog.com/wordpress/2006/12/wheres_the_debt.html#comment-4192 <p>Joe is borrowing money from China to buy the Chinese TV. China will keeping lending Joe money as long as Joe keeps buying China's new TVs. This has been a nice arrangement for the past 20 years or so.</p> <p>If Joe, for whatever reason, finds he can't borrow from China anymore, China will want to get something from Joe in exchange for the IOUs it holds. China, naturally, will want some of Joe's stuff. But by then, most of Joe's TVs are busted and Joe will have to fork over his primary asset: land.</p> <p>Naturally, Joe will just tell the Chinese to come and get it. For now, Joe's defense forces still rule the skies. But will that still be the case when Joe can't borrow anymore?</p> Joe is borrowing money from China to buy the Chinese TV. China will keeping lending Joe money as long as Joe keeps buying China’s new TVs. This has been a nice arrangement for the past 20 years or so.

If Joe, for whatever reason, finds he can’t borrow from China anymore, China will want to get something from Joe in exchange for the IOUs it holds. China, naturally, will want some of Joe’s stuff. But by then, most of Joe’s TVs are busted and Joe will have to fork over his primary asset: land.

Naturally, Joe will just tell the Chinese to come and get it. For now, Joe’s defense forces still rule the skies. But will that still be the case when Joe can’t borrow anymore?

]]> By: Aldo54 http://www.coyoteblog.com/coyote_blog/2006/12/wheres_the_debt.html/comment-page-1#comment-4191 Aldo54 Mon, 04 Dec 2006 16:31:05 +0000 http://coyote-blog.com/wordpress/2006/12/wheres_the_debt.html#comment-4191 <p>There is no such thing as a trade deficit - it is the biggest made up problem ever.</p> There is no such thing as a trade deficit – it is the biggest made up problem ever.

]]> By: BlacquesJacquesShellacques http://www.coyoteblog.com/coyote_blog/2006/12/wheres_the_debt.html/comment-page-1#comment-4190 BlacquesJacquesShellacques Mon, 04 Dec 2006 03:33:03 +0000 http://coyote-blog.com/wordpress/2006/12/wheres_the_debt.html#comment-4190 <p>More importantly, lets talk about power. </p> <p>Joe, an American, has the TV, a nice hard asset.</p> <p>The Chinese have some greenbacks. That is they have Joe's promise to give the Chinese something worth the same as the TV, someday, on demand, if all goes well, etc. etc (add more lawyers double talk and escape clauses)</p> <p>I myself do not trust Joe worth nothin'. He is notoriously unreliable, a drunk, a drug user, he could go bankrupt anytime. Imagine, he voted Democrat. What an idiot is Joe. Even so he talked so-called clever Chinaman out of a TV.</p> <p>Stupid Chinee, tricked by fast talking Yankee into trading valuable TV for mere paper.</p> More importantly, lets talk about power.

Joe, an American, has the TV, a nice hard asset.

The Chinese have some greenbacks. That is they have Joe’s promise to give the Chinese something worth the same as the TV, someday, on demand, if all goes well, etc. etc (add more lawyers double talk and escape clauses)

I myself do not trust Joe worth nothin’. He is notoriously unreliable, a drunk, a drug user, he could go bankrupt anytime. Imagine, he voted Democrat. What an idiot is Joe. Even so he talked so-called clever Chinaman out of a TV.

Stupid Chinee, tricked by fast talking Yankee into trading valuable TV for mere paper.

]]> By: Ray G http://www.coyoteblog.com/coyote_blog/2006/12/wheres_the_debt.html/comment-page-1#comment-4189 Ray G Mon, 04 Dec 2006 03:29:51 +0000 http://coyote-blog.com/wordpress/2006/12/wheres_the_debt.html#comment-4189 <p>Nice examples. I've always found it works best in comparing the individual to the overall economy. Most people just don't seem to get econ, and so breaking it down to our personal choices tends to work best. As in, I give Wal-Mart money, they give me goods - what deficit? That's a little over simplified, but it makes the point. </p> Nice examples. I’ve always found it works best in comparing the individual to the overall economy. Most people just don’t seem to get econ, and so breaking it down to our personal choices tends to work best. As in, I give Wal-Mart money, they give me goods – what deficit? That’s a little over simplified, but it makes the point.

]]> By: lk1 http://www.coyoteblog.com/coyote_blog/2006/12/wheres_the_debt.html/comment-page-1#comment-4188 lk1 Sun, 03 Dec 2006 23:42:32 +0000 http://coyote-blog.com/wordpress/2006/12/wheres_the_debt.html#comment-4188 <p>The trade deficit and the national debt are different. The U.S. problem is that the national debt, the borrowing of money from someone (mostly US citizens in the past and now a great deal from China, Japan, and Europe) by selling promissory notes (US Treasuries etc) continues to increase and is involuntarily accumulating debt on each citizen of the US. Both the interest and the principal must be repaid at some point and as long as the debt increases due to excess spending by the government(borrowing more than it makes), our US standard of living must eventually decline (not accounting for technology). Inflation may allow the US to repay part of the debt with cheaper dollars but that has another subset of problems. Continued increased national debt will eventually cause increased taxes (decreased standard of living), a decreased value of the dollar ie inflation (decreased standard of living, or even failure of the government (decreased standard of living). Essentially the government, like each of it's citizens, must eventually live within its means or suffer the consequences. This, I believe is the primary problem, and since the majority of our government borrowing is from the Chinese, many people confuse the borrowing (borrowing is BAD) with the purchasing of less expensive Chinese materials (which is GOOD). Obviously with the globalization of goods/services and consequent competition, prices (and therefore salaries/jobs primarily American salaries/jobs) are going to decrease as Chinese jobs/salaries increase unless the U.S. replaces those jobs with some service or product in which the U.S. has a comparative advantage over the Chinese (or whichever country). Fortunately the US dollar has become the gold standard and therefore the US can continue to borrow temporarily although eventually with increasing debt the dollar will fail. Harry Reid, the new House whip appears to understand this problem-hopefully he will lead some action to accomplish the appropriate objectives. Many others in our government appear to be completely unaware of the situation. Finally in an only partially related discussion, my own personal objection to the IRAQ conflict is that we are financing the conflict with this borrowed money. If the US had tons of surplus money not needed for alternative fuel research, health, seniors, poverty, education, etc., helping others might not be so reprehensible (not to mention the Americans lives lost).</p> The trade deficit and the national debt are different. The U.S. problem is that the national debt, the borrowing of money from someone (mostly US citizens in the past and now a great deal from China, Japan, and Europe) by selling promissory notes (US Treasuries etc) continues to increase and is involuntarily accumulating debt on each citizen of the US. Both the interest and the principal must be repaid at some point and as long as the debt increases due to excess spending by the government(borrowing more than it makes), our US standard of living must eventually decline (not accounting for technology). Inflation may allow the US to repay part of the debt with cheaper dollars but that has another subset of problems. Continued increased national debt will eventually cause increased taxes (decreased standard of living), a decreased value of the dollar ie inflation (decreased standard of living, or even failure of the government (decreased standard of living). Essentially the government, like each of it’s citizens, must eventually live within its means or suffer the consequences. This, I believe is the primary problem, and since the majority of our government borrowing is from the Chinese, many people confuse the borrowing (borrowing is BAD) with the purchasing of less expensive Chinese materials (which is GOOD). Obviously with the globalization of goods/services and consequent competition, prices (and therefore salaries/jobs primarily American salaries/jobs) are going to decrease as Chinese jobs/salaries increase unless the U.S. replaces those jobs with some service or product in which the U.S. has a comparative advantage over the Chinese (or whichever country). Fortunately the US dollar has become the gold standard and therefore the US can continue to borrow temporarily although eventually with increasing debt the dollar will fail. Harry Reid, the new House whip appears to understand this problem-hopefully he will lead some action to accomplish the appropriate objectives. Many others in our government appear to be completely unaware of the situation. Finally in an only partially related discussion, my own personal objection to the IRAQ conflict is that we are financing the conflict with this borrowed money. If the US had tons of surplus money not needed for alternative fuel research, health, seniors, poverty, education, etc., helping others might not be so reprehensible (not to mention the Americans lives lost).

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