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Started By
Message
re: A $5,000 payment would not cause inflation
Posted on 2/24/25 at 8:10 am to SlowFlowPro
Posted on 2/24/25 at 8:10 am to SlowFlowPro
quote:
This money is supposed to be removed from circulation
What do you mean "supposed".
The money was appropriated by congress. They determine the "supposed" part. They planned on the executive spending it unless the spending did not pass the waste, fraud and abuse clauses in the appropriation bills, that no executive has enforced since Trump.
1
Posted on 2/24/25 at 8:11 am to WHS
quote:
Its no different than a stimulus check and I wouldnt mind it.
Ditto and as a retired person on a fixed income it would come in handy.
Posted on 2/24/25 at 8:11 am to Captain Rumbeard
quote:
But you're trying to avoid the fact that this is money already in circulation.
It's been allocated but frozen, correct?
quote:
We wouldn't be creating a single new dollar to do this.
What happens when those dollars go to "pay down the debt" in terms of dollars in circulation?
Fewer dollars in circulation.
Posted on 2/24/25 at 8:12 am to SlowFlowPro
I guess paying off treasury bonds is a way to remove money from circulation?
Posted on 2/24/25 at 8:12 am to dakarx
quote:
When the Lib's sent people a check (from borrowed aka deficit money) it was called stimulating the economy, but when the other side returns unspent money it's called creating inflation........
What is the natural rate of unemployment?
What happens when you stimulate the economy at full employment?
Thanks. And a hint
quote:
when unemployment is lower than the natural rate, inflation tends to rise due to increased demand for goods and services. Conversely, if unemployment is higher than the natural rate, inflationary pressures decrease, potentially leading to deflation.
Posted on 2/24/25 at 8:13 am to GumboPot
quote:
The money was appropriated by congress.
And if we can "save" it, it hasn't been circulated into the economy yet. It's just sitting in a Treasury account somewhere.
quote:
They determine the "supposed" part.
And in this hypothetical, that "supposed" change is to change the purposing of the money and target the deficit-debt.
Or has this policy never really been intended to deal with deficit/debt issues?
Posted on 2/24/25 at 8:15 am to SlowFlowPro
quote:
It's been allocated but frozen, correct?
Yes, allocated but frozen.
quote:
What happens when those dollars go to "pay down the debt" in terms of dollars in circulation?
Puts pressure on the bond market to raise prices thus decreasing bond interest rates. The decreased interests rates could necessarily stimulate the economy and cause inflation.
If inflation is truly the bad guy, the federal government just needs to burn the cash. Lower bond prices with higher interest rates and a lower than planned cash supply in the economy will kill inflation.
Posted on 2/24/25 at 8:15 am to texag7
We’re still running a big budget deficit on top of the $34 trillion debt we already have. That will cause inflation.
Best use of that money is to put it towards closing the deficit or paying off existing debt.
I don’t know how many people would be getting $5000 checks, but if 100 million checks get sent out, thats $500 billion.
Best use of that money is to put it towards closing the deficit or paying off existing debt.
I don’t know how many people would be getting $5000 checks, but if 100 million checks get sent out, thats $500 billion.
Posted on 2/24/25 at 8:16 am to RogerTheShrubber
You do realize that no one is going to see that money?
Posted on 2/24/25 at 8:16 am to dkreller
quote:
I guess paying off treasury bonds is a way to remove money from circulation?
Basically.
Selling bonds = less money supply/deflation. They accept the dollars from circulation and those dollars are out of circulation.
Buying bonds = more money supply/inflation. They pay dollars for the bonds and add dollars to the circulation.
Posted on 2/24/25 at 8:16 am to dkreller
quote:
Spending on a deficit creates new money right?
You mean using the money already in the treasury on the debt?
You can use the DOGE savings on the debt, sure.
Posted on 2/24/25 at 8:17 am to texag7
Returning the peoples money or thinking it will make a difference in the national debt has now become a distraction.
Fun fact that DC and everyone against the $5,000 payment knows, the national debt will never be paid back, it's impossibly too big.
Fun fact that DC and everyone against the $5,000 payment knows, the national debt will never be paid back, it's impossibly too big.
Posted on 2/24/25 at 8:17 am to BeepBopBoop
quote:
You can use the DOGE savings on the debt, sure.
Isn't this the sole purpose of DOGE?
Posted on 2/24/25 at 8:18 am to BeepBopBoop
quote:
You mean using the money already in the treasury on the debt?
But not in circulation.
If you want to make it less inflationary, pay it over a year. Not as a lump sum.
Posted on 2/24/25 at 8:18 am to texag7
The payment only needs to go to those who paid more than 5k in taxes in lets say the last 3 years(to be very generous). If you only paid 2k...thats what you get
Posted on 2/24/25 at 8:19 am to KiwiHead
quote:
You do realize that no one is going to see that money?
Absolutely because there will be no trillions in cuts.
But I am just pointing out to these new progressives that their freebies come with a price.
Posted on 2/24/25 at 8:19 am to Tandemjay
quote:
Returning the peoples money or thinking it will make a difference in the national debt has now become a distraction.
The irony of this statement.
Posted on 2/24/25 at 8:20 am to dkreller
quote:
I guess paying off treasury bonds is a way to remove money from circulation?
Depending who owns the treasury bonds that are being paid down.
If the treasury bonds are in a private account, like the teachers' union pension account, and it is being paid down the answer is no. Money is still being added to the economy.
If the treasury bonds in the Federal Reserve balance sheet are being paid down the answer is yes. The Federal Reserve will burn the cash.
Posted on 2/24/25 at 8:26 am to SlowFlowPro
quote:
Basically.
Selling bonds = less money supply/deflation. They accept the dollars from circulation and those dollars are out of circulation.
Not true. When your treasuries are due and you redeem them you have more cash on hand.
What is really happening tho if U.S. Treasury used DOGE savings to service existing debt that would mean the Federal Reserve would not need to print as much money as they anticipated for this year. The U.S. Treasury has to refinance redeemed bills, notes and bonds totaling approximately 8.25 trillion this year. That is, the FR has to print more money and go into further debt to service old debt because we are short on tax revenue by a lot.
This post was edited on 2/24/25 at 8:29 am
Posted on 2/24/25 at 8:27 am to SlowFlowPro
quote:
Isn't this the sole purpose of DOGE?
OK so you want the DOGE savings to be used to directly pay down debt?
If Congress isn't going to get the budget down from $7 trillion to around $4.5 trillion then it won't matter where that $5k goes.
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