Ron: >> > I think the plan to have high government debt is just a way for the >> > wealthy >> > to have another way to get surplus value from workers who pay taxes >> > which >> > result in payment to bond holders.
Me: >> How does this work? the way I can see it is if the government cuts >> programs that help the working class while raising taxes on the >> working class in order to pay the interest on the debt. That seems to >> be the trend. Ron: > A high income person would rather buy bonds than pay taxes. IIRC, high > income/wealth individuals own a considerable portion of US debt. well, rich folks do pay _some_ taxes on interest on government bonds. But you're right that the gov't has switched from taxing the rich to borrowing from them. me: >> It's true that the existence of the government's debt usually leads to >> a redistribution upward, to the interest-earners. It also makes >> government officials more dependent on the kindness of _rentiers_ (or >> at least think that they are so). A socialist government (under >> capitalism) wouldn't run significant deficits and pile up debts, >> except perhaps to invest in infrastructure and the like. Ron: > A big improvement in the government budget deficit has to come from a cut in > defense spending. that's a good idea. > A socialist government on both a federal, state, and local basis would > probably buy corporations by issuing bonds. why not expropriation? it really depends on the specifics involved with the creation of a socialist government. >> It's true that interest rates are likely going to rise in the future >> (since they're so low now) but to some extent the government has >> locked in low rates by issuing and selling long-term bonds. I'll have >> to check how much they've done that, but if they're smart this is the >> strategy they have followed. > Federal debt mostly consists of bills, notes, bonds, and TIF securities. The > average maturity is about 5 years. Bonds are issued with a maturity greater > than 10 years, but only comprise 11% of the debt. I'd guess that the Treasury decides what bonds to issue based on (what I think of as) standard financial principles, i.e., that long-term bonds should be issued to finance long-term projects, short-term bonds to finance short-term cash needs, etc. They don't follow the principle of "hey long-term interest rates are low, so we should lock them in by selling a bunch of long-term bonds." Maybe a businesscritter such as Mitt Romney would follow this principle? ;-) -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
