“We are spending money we don’t have,” Mr. Bloomberg explained. “It’s not like your household. In your household, people are saying, ‘Oh, you can’t spend money you don’t have.’ That is true for your household because nobody is going to lend you an infinite amount of money. When it comes to the United States federal government, people do seem willing to lend us an infinite amount of money. … Our debt is so big and so many people own it that it’s preposterous to think that they would stop selling us more.”Until it becomes obvious that we can no longer service the debt, at which point, you know, it's not quite so preposterous.
May God deliver us from know-it-all billionaires.
Paraphrase of one of the comments:
ReplyDelete'So we shouldn't have to pay taxes, since you can just borrow all the money the govt needs'.
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ReplyDeleteIf you ever wonder what kind of leadership got us into this mess....
ReplyDeleteBruce: Sounds about right.
ReplyDeleteBut you know who will be first in line with his hand out when the big crunch comes.
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ReplyDeleteWe will probably not get to that point. As our debt grows interest rates will have to rise to cover the decrease in our credit standing. At some point that increase in interst rates will crater us and send the rest of the world into the abyss along with us.
This will happen before the world rejects our debt. There aren't enough QEs to soak up all the debt we will have while at the same time keeping interest rates low.
ReplyDeleteHey, maybe that is what the "flat earthers" really meant.
It won't take much of a rise in interest rates to crater us, Yojimbo, if the typical cash flow sucks as badly as I'm thinking, and people have to choose between eating and paying off loans.
ReplyDeleteYojimbo,
ReplyDelete"decrease in our credit standing"? That isn't possible, don't you remember the President's assurances from 2011 : “No matter what some agency may say, we’ve always been and always will be a AAA country."
preposterous to think that they would stop selling us more
I wonder how many in Zimbabwe said the same thing. The government does have the advantage of potentially being immortal. But they're getting close to saying "don't worry about it, everything'll be fine because it'll all run on unicorn farts!" I suspect they figure the government will always be able to rig the system in their favor, even if means screwing everyone else, but I'm surprised they're saying this stuff out loud.
Infinite debt forever and beyond!
We're doomed.
I think what Bloomberg is really saying is that he's played the system he helped design and he's personally got plenty of cash, so F.Y.
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