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originally posted by: ScepticScot
In economics velocity of money is GDP divided by money supply. Bond purchases would not be included in GDP.
In terms of the quantity theory of money, we may say that the velocity of circulation of money does not remain constant. “You can lead a horse to water, but you can’t make him drink.” You can force money on the system in exchange for government bonds, its close money substitute; but you can’t make the money circulate against new goods and new jobs. - Paul Samuelson
originally posted by: ScepticScot
He is talking about adding money to the system (quantity) not velocity. Bond purchases are not included in GDP and not included in the velocity of money.
originally posted by: neo96
Is Trump's idea about renegotiating the national debt unconstitional?
Yeah well fiat currency didn't exist at the time.
Neither did the federal reserve.
Neither did the big fat sacred cows social security, medicare, and medicaid.
And the prescription drug plan.
The government take over of student loans didn't exist.
Food stamps didn't exist.
Big oil subsidies didn't exist.
Big alternative subsidies didn't exist.
'unconstitutional' ?
Nope.
Borrowing more money is asinine though.
Want to fix the debt ?
Fix the money as in fiat currency.
Take cut down the number of $$ in circulation increasing the value of the dollar.
Back it with something gold,silver,platinum
Less than 20 silver.
100's gold.
Create a new bill like the 500 back it with platinum.
Then get the US government the hell out of the insurance business, healthcare business, education business, and foodstamp business.
None of that is ever going to happen though as badly as it's needed.
We will always have debt, and since the state created money.
That is never going to change.
originally posted by: introvert
Why would anyone be interested in negotiating the terms of the debt when they already have contracts? What incentive would they have to take less money for their investment?