I'm announcing the US has just discovered $23 T worth of gold. Should we dump in the Mariana Trench. - Politics Forum.org | PoFo

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Everything from personal credit card debt to government borrowing debt.

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OK, not really.

However, I just had a thought.

It is that == a year after the deficit spending has been made the economy has adjusted to its size. If their has been no inflation and the money has found a nice safe place to be "saved". Then it is not ging to be a problem ever.

My evidence is historical. Has there ever been a case, even in gold standard times, when past deficit spending has caused inflation?

I think there was a problem in Spain in the 1520s when the Aztec gold flooded into Spain and quickly left for other nations because Spain was so backward economically that it didn't tax. But, this was not actually deficit spending. It was actual gold.

so, the question was == for the 325 years that the UK has had a national debt that actually grew almost every year, did it cause inflation? Is some inflation a good thing?Yes, we target 2% nowadays.

So, my point is a year after the deficit spending the bonds have become the assets of somebody. That somebody really wants that asset. That somebody had cash and used it to buy the bond, and was not forced to do this at gun point. That somebody might be a foreigner. So what, she had US $$ and used them to buy the bond. She wanted the bond. The 'somebody' might be a company or corporation and it could be a US corp. or a foreign corp.. These corp. bought the bond willingly.

It is just an accounting fact that the world's economy has in it some $X of dollars and some $Y of US bonds. It is another accounting fact that when the US uses tax revenue dollars to redeem a bond, the US Gov. takes "at gun point" the taxed dollars and gives then to the bond holder, and then destroys the bond. So, before the transaction there was (say) $1 M in cash and a $1 M bond held by the public (someone in the world), and after the transaction the public has just the $1 M in cash (and the bond has been 'burned'). Why does Mainstream Economists think this is a good idea?
. . . I actually claim that they do not think it is a good idea. They just like to talk about.
. . . OTOH, maybe they are this stupid.
. . . Those bonds are as good as gold to their holders. Their holders do not want the US to tax them to pay them. They want someone else to pay the tax, if they think about it at all. But, think about it. Who holds the bonds? Are they rich or poor? Do you really think the poor of the US have $23 T of excess cash to be taxed away to pay the rich who would really rather have the bond anyway.
. . . The whole exercise makes as much sense as my title asked. It was, "Why dump $23 T worth of gold into a 5 mile deep ocean trench?"

Funny question, what nation is home to the largest hand dug hole in the ground (in terms of cubic feet or meters)?

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