On Aug 10, 1:41*pm, "PrecisionmachinisT"
wrote:

Current federal tax revenues are appx 16% of gross gdp and the interest on
the federal debt is about 1.5% of it.


But federal spending is appx 25% of gdp.


The current political situation is similar to having the bank president (
Boehner et al ) instruct it's loan officers to turn down loan apps for new
refrigerators and washing machines from anyone who lives on an
even-numbered-street even though they might make 180K per year and have no
other creditors to speak of.

More like the having the bank president instruct it's load officers to
turn down loan apps where it looks like the loan will never be paid
off. Something that should have been done in the mortgage business.

Dan

wrote in message
...
On Aug 10, 1:41 pm, "PrecisionmachinisT"
wrote:

Current federal tax revenues are appx 16% of gross gdp and the interest
on
the federal debt is about 1.5% of it.


But federal spending is appx 25% of gdp.

Wrong--you are high, and I was low.

But it really hasn't changed much at all since the early 50's

http://nationalpriorities.org/resour...2015-perc-gdp/

In fact, I'm a little bewildered as to why so many people all of a sudden
seem to view public debt as a huge problem for the US

http://en.wikipedia.org/wiki/List_of...by_public_debt

As to the actual defecit amount, the world currency supply ( M1 M2 M3 ) has
expanded exponentially since then.

Exonomic growth ( wealth creation ) absolutely depends upon the continued
issuance of debt via the fractional reserve system ----( something I've
been trying to get you to understand for some time )

The current political situation is similar to having the bank president
(
Boehner et al ) instruct it's loan officers to turn down loan apps for
new
refrigerators and washing machines from anyone who lives on an
even-numbered-street even though they might make 180K per year and have
no
other creditors to speak of.

More like the having the bank president instruct it's load officers to
turn down loan apps where it looks like the loan will never be paid
off.

What in the world makes you think that a bank officer would EVER want a loan
to be fully paid off ?

Something that should have been done in the mortgage business.

Why ?

--a banker's interest lies solely in maintaining a positive income stream.

On Aug 11, 10:34*pm, "PrecisionmachinisT"
wrote:


Exonomic growth ( wealth creation ) absolutely depends upon the continued
issuance of debt via the fractional reserve system ----( something I've
been trying to get you to understand for some time )

Maybe if you explain why economic growth depends on continued issuance
of debt , I might be convinced.

The current political situation is similar to having the bank president
(
Boehner et al ) instruct it's loan officers to turn down loan apps for
new
refrigerators and washing machines from anyone who lives on an
even-numbered-street even though they might make 180K per year and have
no
other creditors to speak of.
More like the having the bank president instruct it's load officers to
turn down loan apps where it looks like the loan will never be paid
off.

What in the world makes you think that a bank officer would EVER want a loan
to be fully paid off ?

If it looks as if a loan will not be paid off, it generally means the
property will go into foreclosure.

*Something that should *have been done in the mortgage business.

Why ?

If the bankers had required that borrowers are capable of paying on
the loan until it is paid off, there is much less chance of having to
foreclose. The loose loan requirements was one factor in creating the
housing bubble and the recession.

--a banker's interest lies solely in maintaining a positive income stream..

It is not positive if the loan goes into foreclosure. Why do you
think the banks had to be bailed out by the government?

Dan

On Fri, 12 Aug 2011 04:57:16 -0700 (PDT), "
wrote:

snip
It is not positive if the loan goes into foreclosure. Why do you
think the banks had to be bailed out by the government?
snip
============

The banks and the bankers are two separate things...

wrote in message
...
On Aug 11, 10:34 pm, "PrecisionmachinisT"
wrote:


Exonomic growth ( wealth creation ) absolutely depends upon the continued
issuance of debt via the fractional reserve system ----( something I've
been trying to get you to understand for some time )

Maybe if you explain why economic growth depends on continued issuance
of debt , I might be convinced.

The current political situation is similar to having the bank
president
(
Boehner et al ) instruct it's loan officers to turn down loan apps for
new
refrigerators and washing machines from anyone who lives on an
even-numbered-street even though they might make 180K per year and
have
no
other creditors to speak of.
More like the having the bank president instruct it's load officers to
turn down loan apps where it looks like the loan will never be paid
off.

What in the world makes you think that a bank officer would EVER want a
loan
to be fully paid off ?

If it looks as if a loan will not be paid off, it generally means the
property will go into foreclosure.

Something that should have been done in the mortgage business.

Why ?

If the bankers had required that borrowers are capable of paying on
the loan until it is paid off, there is much less chance of having to
foreclose. The loose loan requirements was one factor in creating the
housing bubble and the recession.

--a banker's interest lies solely in maintaining a positive income stream.

It is not positive if the loan goes into foreclosure. Why do you
think the banks had to be bailed out by the government?

Dan

Banks were playing with other peoples money, and consequently less concerned
about whether it got paid back.

Mortgages, and even the market value of the properties themselves, ceased to
be driven by supply and demand for housing and were instead driven by the
supply and demand for mortgage backed securities.

Because this process kept driving up property values, no one was much
worried about foreclosures. Prepayment of the loan was viewed as a bigger
problem than default. When people prepay, the investors lose their income.

The junk mortgages were not invented to give deadbeats a loan, they were
invented to create more mortgages to sell to investors.

Paul K. Dickman

----- Original Message -----
From:
Newsgroups: rec.crafts.metalworking
Sent: Friday, August 12, 2011 4:57 AM
Subject: Where's all the loudmouthed Obama liberals since his last
massive failure?


On Aug 11, 10:34 pm, "PrecisionmachinisT"
wrote:


Exonomic growth ( wealth creation ) absolutely depends upon the continued
issuance of debt via the fractional reserve system ----( something I've
been trying to get you to understand for some time )

Maybe if you explain why economic growth depends on continued issuance
of debt , I might be convinced.


Last time, maybe I confused you, you got stuck on the Fed's function but for
the time being forget about the federal reserve...

Anyways, it's called "fractional reserve banking"...

In a nutshell, banks "create" money by taking in deposits from one
individual--and then issuing loans to several others totaling an amount much
higher than the original deposit :

http://en.wikipedia.org/wiki/Fractional-reserve_banking

Bob deposits $100.00 into the bank, and Joe the banker loans out $80 to
about 5 people, and it recycles through the economy several times but as
long as each one of these 5 people in turn deposits $25 into a bank
someplace well then there you have it--a magical perpetual money
machine.....

IOW, digging for gold is dirty work and it's pretty hard at least for me to
imagine a functioning economy whereas pretty much everybody is a prospector
or egg farmer.


The current political situation is similar to having the bank
president
(
Boehner et al ) instruct it's loan officers to turn down loan apps
for
new
refrigerators and washing machines from anyone who lives on an
even-numbered-street even though they might make 180K per year and
have
no
other creditors to speak of.
More like the having the bank president instruct it's load officers to
turn down loan apps where it looks like the loan will never be paid
off.

What in the world makes you think that a bank officer would EVER want a
loan
to be fully paid off ?

If it looks as if a loan will not be paid off, it generally means the
property will go into foreclosure.


Whether or not the loan ever gets paid off is irrelevant, of import is only
whether the debtor can continue to service said debt.

Something that should have been done in the mortgage business.

Why ?

If the bankers had required that borrowers are capable of paying on
the loan until it is paid off, there is much less chance of having to
foreclose. The loose loan requirements was one factor in creating the
housing bubble and the recession.

Probably a good arguement for tighter government control over banks.


--a banker's interest lies solely in maintaining a positive income
stream.

It is not positive if the loan goes into foreclosure. Why do you
think the banks had to be bailed out by the government?


The banks ran out of prospective borrowers, causing deposits to also fall to
a point below the allowable fractional percentage--therefore, they could not
make any new loans even if they could have found a sucker who was willing to
sign the dotted line.

On Aug 12, 11:11*pm, "PrecisionmachinisT"
wrote:

Exonomic growth ( wealth creation ) absolutely depends upon the continued
issuance of debt via the fractional reserve system ----( something I've
been trying to get you to understand for some time )

Maybe if you explain why economic growth depends on continued issuance
of debt , I might be convinced.

Last time, maybe I confused you, you got stuck on the Fed's function but for
the time being forget about the federal reserve...

Anyways, it's called "fractional reserve banking"...

In a nutshell, banks "create" money by taking in deposits from one
individual--and then issuing loans to several others totaling an amount much
higher than the original deposit :

http://en.wikipedia.org/wiki/Fractional-reserve_banking

Bob deposits $100.00 into the bank, and Joe the banker loans out $80 to
about 5 people, and it recycles through the economy several times but as
long as each one of these 5 people in turn deposits $25 into a bank
someplace well then there you have it--a magical perpetual money
machine.....

IOW, digging for gold is dirty work and it's pretty hard at least for me to
imagine a functioning economy whereas pretty much everybody is a prospector
or egg farmer.


Sorry but I understand how banks create money. It is the why economic
growth depends on continuance of issuing debt that eludes me.

Dan