A personal (and Libertarian) view on the Bond program
•
by ghinculov
OP/ ED - Today it was announced that our government is introducing a new bond program. The politicians say this is not because they are broke; I'll assume than that it's for the fun and the goodness of it. Moving on from the motivation, let's see to its finish.
A bond program works pretty easily: you give the government money and they'll pay you back, WITH INTEREST. (Let's forget that there'll be no contract signed and thus you'll rely on the goverment's good faith to receive some form of payment.) I'm interested mostly in the paying back and the interest part. We all know that the state doesn't produce anything, all its revenues are coming from taxes. So how will they earn the extra money needed to pay back the bond holders? If a, let's say, factory would issue bonds I'll assume that it will have a profit and, from this profit, my bond will be repayed. But the goverment?
To increase its revenues the goverment has a limited number of ways to increase its revenues:
1. The most civilised is to assume a population grows, which will increase the tax coverage. This, unfortunately, is very hard to envision because we're in a war and currently loosing states on a daily basis. Just think that, in Texas, we lost over 700 citizens (around 4.5% of our population). What if we'll lose New York? Anyway, this method of increasing government revenue is not to be currently counted on.
2. Another method is the increase in taxes. This would hit all Americans, mostly because the money thus gained will be used not to develop the infrastructure or in the war, but to pay out the debt and the interest.
3. The most devious method would be inflation. The goverment will just issue money. Worthless virtual paper. You'll find that, in a few days, your saving and your salary will be worth just a fraction. This, in my opinion, is worse that increased taxes because the capital and savings themselves are attacked, not just your revenues and the low prices of one ore more goods (depending on the methos of tax increase).
4. The last method would be the release of other bonds, which will postpone but multiply the problem.
Please take note that I encourage the citizens to use their savings in the war by purchasing weapons and even to donate money to the government. I just don't think the Bond program is a good idea.
(All that is said above is true in real life too.)
Facebook
Twitter
Discord
Comments
Thank you for your introductory understanding of fiscal mismanagement. This is a poor time to be worried over abstract concepts. The Russians are at our door. The combined weight of PEACE seeks our destruction. The bond program is maybe too late or not vigourous enough. The government needs money and due to losing states they have lost revenue. A vast amount of our population is not taxable.
Your intentions may be good. Your point may be good. The timing is awful.
Well, I agree with the article. In the end, the US could be completly conquered but your account won't be deleted. The government doesn't own you! Be smart and survive. After all, a few weeks ago out king Emerick the first was advising citisend to take refuge in Greece...
Bonds are dumb but in this case it doesn't matter. Once the war is over, the economy will stablize. Taxes are super high right now, 1 month of those taxes with no war would most likely pay the bonds back.
Who gets hurt? Well, the tax payer. But, since it is war, most businesses aren't making money anyway. It's actually a win win for businesses who buy bonds and have companies being hurt by the war.
So... I have to disagree with this article.
If businesses don't have a profit they should close down and invest in bonds. So you're saying: invest when you don't have the money to. That lolish.
Well they should put it in a bank and allow the bank to work the money. They could make a profit on the bond money that way. You are right only if it sits in an account idol. It would take some good money management to make this work, which GOvt has shown it doesnt have.
Avenya has a small point if you read between the lines. This effort is like WWII. You are giving to the government not to make a return but to give a loan to help the war effort. If the the nation falls then everyone loses but if we can give the nation an influx of gold to continue the fight then we all win...in the long run.
I'm saying basically what teocyn is saying I'm saying lol.
I'm a business owner, the war is hurting me. Why? Because of the lack of stability and also some of my companies being in occupied land.
If I invest in Bonds now, I will help the country get out of this war buy giving more money for weapons.
I also get a return on my Bonds eventually, making some profit.
Also, if we begin to win the war, my businesses will start to become more profitable again, so I will start making gold.
So this is why it is a win-win for businesses. Florida is the only stable region, and we'll see after today/tmrw. So if you don't have your business in Florida, you know how it feels in your pocketbook to lose the region.
So again, I think the general idea is true, that bonds aren't a good thing. I just think that in our situation, they are actually better than nothing.
In the end of the article there is a piece of advice: buy your own weapons, fight and if you have to spare, DONATE.
I have 2 companies, one of them is closing down due to high wages, not instability. Personally I won't be buying bonds not because of what the article is debating. The reason is that I don't think the goverment will be able to pay me back.
That is a valid fear, and if it is the case, no one should buy them either. No need to put the government in debt and have all trust lost in them.