Is the Ballooning US Debt a Threat to Our Future Economic Situation?

[PhilKravitz]

Phil,

I think your meant to say, http://en.wikipedia.org/wiki/Bretton_Woods_system" , versus Brenton Woods... I have been there, the hotel that is and toured where the world financial leaders met, quite impressive, they have the room blocked off sort of as a shrine.

Rhody...

ooopppsss yes you are right Bretton Woods

 

[Evo]

What does matter in managing the overall cost of healthcare?

You brought it up, do some research and then post your findings.

 

[rhody]

Maybe, small localized currencies are in our not too distant future as a way of protecting a regions wealth, think I am crazy, consider this, http://en.wikipedia.org/wiki/BerkShares" in the Berkshires where I grew up (clever name, huh?) have been in circulation since 2006. Some smart, think outside the box ahead of their time folk, I reckon...

BerkShares are a local currency designed and issued for the Berkshire region of Massachusetts. According to the BerkShares website,[6] residents purchase BerkShares at 95 cents (USD) per BerkShare from one of twelve branches of five local participating banks. Businesses then accept BerkShares at full dollar value, differentiating the business as one supporting the BerkShares values' of local economy, ecology, sustainability, and community, and creating a five percent discount incentive for those using the currency. BerkShares can then be used by accepting businesses to purchase goods and services from other participating businesses, make change, pay salaries, or support local non-profits, increasing the local economic multiplier effect and keeping value recirculating in the region. If businesses have an excess of BerkShares, they may also be returned to a participating bank at the equivalent rate of 95 cents per BerkShare (i.e., charging no exchange fee).

Over 70 area non-profits currently accept BerkShares for donations. Participating banks provide BerkShares with 13 brick-and-mortar offices where residents can exchange dollars for BerkShares and receive more information on the project.

Rhody...

 

[Al68]

Maybe, small localized currencies are in our not too distant future as a way of protecting a regions wealth, think I am crazy, consider this, http://en.wikipedia.org/wiki/BerkShares" in the Berkshires where I grew up (clever name, huh?) have been in circulation since 2006. Some smart, think outside the box ahead of their time folk, I reckon...


Rhody...

Sure, but "Berkshares" are not a different currency, they are just bank notes redeemable for U.S. dollars. Legally, they are nothing more than a bearer note for 95 cents that some retailers are giving a 5 cent discount for using.

 

[rhody]

Sure, but "Berkshares" are not a different currency, they are just bank notes redeemable for U.S. dollars. Legally, they are nothing more than a bearer note for 95 cents that some retailers are giving a 5 cent discount for using.

Al68,

This is true for the moment at least, but if the US currency is devalued say 30% and people are used to dealing in Berkshares for .95 cents on the dollar, it is not too far of a stretch to suggest that they could at least regionally set their own exchange rate in the region based on Berkshares alone for participating members. It is all contingent on that magic ingredient, "trust", in return for goods and services, simple as that. I would dare to suggest that Berkshares could be used just like other valuable assets, gold, etc... in times of crisis. Of course control over the number of shares printed is important for the regional currency to hold it's value, just like it is with the run-away dollar. Print too many Berkshares and we are in the same ballgame all over again.

Rhody...

 

[Al68]

Al68,

This is true for the moment at least, but if the US currency is devalued say 30% and people are used to dealing in Berkshares for .95 cents on the dollar, it is not too far of a stretch to suggest that they could at least regionally set their own exchange rate in the region based on Berkshares alone for participating members. It is all contingent on that magic ingredient, "trust", in return for goods and services, simple as that. I would dare to suggest that Berkshares could be used just like other valuable assets, gold, etc... in times of crisis. Of course control over the number of shares printed is important for the regional currency to hold it's value, just like it is with the run-away dollar. Print too many Berkshares and we are in the same ballgame all over again.

Rhody...

They are not like gold, silver, etc. that have intrinsic value. Their only value is from their backing by those issuing banks, ie backed only by U.S. dollars.

They will always be worth 0.95 U.S. dollars, unless they either become worthless because those banks go bankrupt, or they gain numismatic value due to rarity, which is a different matter altogether, and seemingly unlikely.

 

[Jasongreat]

Sorry, but again, you're doing nothing but making unsupported random claims. A doctor's income doesn't really matter when it comes to managing costs of overall healthcare. Please stop posting unsupported opinions. Do some research before posting.

Are saying that if a procedure costs 1,000 dollars or if it costs 10,000 dollars, it has no impact on healthcare costs? Doctors incomes have to have an impact on costs, don't they?

 

[rhody]

They are not like gold, silver, etc. that have intrinsic value. Their only value is from their backing by those issuing banks, ie backed only by U.S. dollars.

They will always be worth 0.95 U.S. dollars, unless they either become worthless because those banks go bankrupt, or they gain numismatic value due to rarity, which is a different matter altogether, and seemingly unlikely.

Al68,

Thanks, I was unfamiliar with the term, http://en.wikipedia.org/wiki/Numismatics" , I don't think it will come to that, but interesting to note it was used in ancient cultures without a monetary system.

Lacking a structured monetary system, people in the past lived in a barter society and used locally found items of inherent or implied value. A few people today still use bartering in absence of a monetary system. Early money used by people is referred to as "Odd and Curious", but the use of other goods in barter exchange is excluded, even where used as a circulating currency (e.g., cigarettes in prison). The Kyrgyz people used horses as the principal currency unit and gave small change in lambskins.

Rhody...

 

[Al68]

Thanks, I was unfamiliar with the term, http://en.wikipedia.org/wiki/Numismatics" , I don't think it will come to that, but interesting to note it was used in ancient cultures without a monetary system.

I would note also that a fiat monetary system, as we know it today, was never used in the U.S., and rarely elsewhere, until relatively recently. Coining money just meant pressing gold, silver, etc. into a flat circle stamped to guarantee its composition. It was real money. And paper notes were IOU's for real money, ie gold/silver. Real money can't be devalued by its issuer after it's issued.

Wouldn't it be nice to be able to write a check to buy something, with magical ink that later reduces the amount of the check? That's essentially what government does, effectively taxing everyone in addition to all the other means of taxation.

Also interesting is that coining real money is still done today, by both government and private companies, but they now must be called silver or gold "rounds" instead of "coins" because they are real money instead of fiat money.

 

[mheslep]

I'm not only worried about what our debt levels mean to our long-term economic growth and http://www.neverfailgroup.com" , but how they affect our national security. When a sworn enemy owns a significant portion of your debt, it can seriously undermine your ability to defend yourself.

The only "sworn enemy" the United States has now is the Taliban and Al Qaeda. Some others might be counted as openly antagonistic relationships, like N. Korea, Iran, Hamas. One doesn't trade ~$360 billion per year with sworn enemies.

 

[rhody]

Here is a new wrinkle from a young man ahead of his time, thinking outside the box, Mr. Zuckerberg... of Facebook: who sees the impending devaluation of our currency, and his response to it:
http://tech.fortune.cnn.com/2011/01/28/facebook-pay-our-way-or-get-out/

As Facebook starts to host all sorts of commerce -- and is now mandating the use of its currency -- perhaps it's time to stop thinking of it as a company and start thinking of it as a country.

and

Imagine, for a moment, that you're the central banker of a country with nearly 600 million residents. Your economy is growing quickly, and the bigger it gets, the more foreign investors are knocking at your door, trying to hawk their wares and build within your borders. Nobody knows how much your economy is actually worth -- some place the GDP at $50 billion, making it the 73rd largest economy in the world, though everyone agrees that your country will be a global force for years to come.

But there's one sector of your economy that won't fall in line. By the end of the year, it'll be worth over a billion dollars and it has proved to be sustainable even during an economic downturn. But a lot of the companies that make up the industry don't want to use the national currency. They'd rather use their own currencies and avoid a hefty 30% tax on all transactions.

But, as a wise central banker, you know that for a country to grow its economy, it needs a singular currency so the proletariat doesn't get confused. You've been able to convince the largest companies to use the national currency, but rogue stragglers remain. What do you do?

Tell them they can either use the currency or get the hell out.

and

Facebook, already a technological and cultural hegemon, is becoming an economic one as well. A key feature of Facebook's decree is that developers can still use their own currencies; they'll just have to peg the local currency to Facebook Credits.

An interesting twist ? No ?

Rhody...

 

[WhoWee]

Here is a new wrinkle from a young man ahead of his time, thinking outside the box, Mr. Zuckerberg... of Facebook: who sees the impending devaluation of our currency, and his response to it:
http://tech.fortune.cnn.com/2011/01/28/facebook-pay-our-way-or-get-out/
and
and
An interesting twist ? No ?
Rhody...

It is. I like this fellow and recently responded to him on a facebook post regarding IPO strategy. Given the wide distribution of member/friends I think he'd be wise to accept EVERY currency at this point - as one increases - another decreases.

 

[mugaliens]

Here is a new wrinkle from a young man ahead of his time, thinking outside the box, Mr. Zuckerberg...

Oh, heck no! Under his plan all the funds flowing out of our hands would have even less accountability than the hundreds of millions that flowed "through" the Clinton foundation into Haiti.

But didn't.

Are you out of your mind?

 

[WhoWee]

Oh, heck no! Under his plan all the funds flowing out of our hands would have even less accountability than the hundreds of millions that flowed "through" the Clinton foundation into Haiti.

But didn't.

Are you out of your mind?

Quite possibly - but the young man has a unique problem set. LOL

 

[mugaliens]

Quite possibly - but the young man has a unique problem set. LOL

Since we all pay taxes, isn't it all our problem? One day, the account will most certainly come due, and it won't matter who has paid what up until that time. At that time, we will all wind up paying dearly.

 

[WhoWee]

Since we all pay taxes, isn't it all our problem? One day, the account will most certainly come due, and it won't matter who has paid what up until that time. At that time, we will all wind up paying dearly.

With interest - I was merely commenting on the facebook scenario.