Is the U.S. Insolvent

[BitWhys]

Good stuff BW.

I have my moments, thanks.

not that its the same as the federal-only post-war tally, but here's the numbers I kind of keep track of...

$1,951,660,559,000 State and Local (2004)
$8,674,251,191,808 Federal (current)
$1,859,440,665,000 OASI non-marketables (2005)
$540,000,000 UN peacekeeping (not in scale, just had to toss it in)
$12,485,892,415,808 Total

13,322,600,000,000 GDP (estimated)
93.72%

Interesting times. Is there even a number for the debt-service ratio when there's a trade deficit?

 

[Albertabound]

In Table 25-12, cell A745 has line item "900: Net interest"

$181,000,000,000 paid on interest of debt.
Total interest owed on treasury securities $352,000,000,000 ....bonds and such

Where does it show any interest coming in? That's my question. I know they pay the interest, but you say they receive interest payments on money they have borrowed. The only interest payments I see, is all negative numbers. The only place I see a positive # is on the interest on refunds of tax collections. Yes they collect interest on bonds......How does that go again...Oh yeah! ....that's
not relevant.

You were saying there was some conspiratorial financial sleight-of-hand regarding the reporting of "net interest

"

Once again you're not paying attention: I said "why don't they show the gross interest number"

That's where your famous lines came ......again "that's not relevant"

Held primarily by custodial banks and collected for the owners.

Don't you know that if you hold a bond, you get paid interest?

I most certainly do, and the federal reserve holds American bonds and gets paid interest on them because the government deposited them as collateral on their loan from the reserve. It is the reserve that collects this interest not the American gov't. You have not shown anyone that the American gov't receives interest from the federal reserve.
Cell 768 shows $-552,000,000....that's a negative by the way.....interest on loans to federal financial bank.

I've already shown you a balance sheet.

You have shown a balance sheet for the Federal Government ....not for the Federal Reserve. You will never find a balance sheet from the Federal Reserve. Never. For god sake, the federal government does not even have access to it. In my posts if I refer to "the fed" I am referring to the federal reserve. Now when you say "fed" what are you referring to ?

You mean like I previously shown you that the Bank of Canada and the Bank of England are not privately held, and that most of the debt is not held the Fed as you were proclaiming, two items that pretty much demolish your argument?

yes! that is exactly what I mean.

unlinked information dripping with insult and challenge

posts with links....97,93,91,75,86,52,17,3,
but let me guess ....that's not relevant!


No where has anyone shown me that the interest on any national debt goes back to the government.
and the links that toro has provided definitely shows that the U.S. is .......insolvent ....thanks buddy!


Sorry, the numbers I gave are supposed to be in the billions....not millions. Hard to keep up with all the money the U.S. has........right!

 

[Albertabound]

Appears you are defending against statements made defiantly to build points on a personal issue.... kinda like the MSM do these days.... I guess it's the new "style" of communication....attacking another's credibility built on bias.

the first insult of this post came from toro, I let a couple of them slide, but then he continued to take my words out of context and used them to benefit his apparent knowledge and the lack of on my part. I simply play by the rules that are present not that are given.

Appears you are defending against statements made defiantly to build points on a personal issue....

Once again .....more assumption on the part of readers of this post. Let me correct myself ....the participants of this forum.

If I prove a point.......it's not relevant or just ignored.
I provide links but am told that I do not.
I provide a question that can not be answered...........it just does not get answered or is not relevant.

Boy, it sure is fun here!
keep it coming

 

[Curiosity]

Well AB Bound

It appears you've enjoyed your 15 minutes -

 

[Albertabound]

Thanks! I have immensely. As long as I have opened a few eyes, that's all that counts.

If congress has the right under the Constitution to issue paper money, it was given them to use themselves, not to be delegated to individuals or corporations. -Andrew Jackson

 

[BitWhys]

absolutely

I'm always surprised when someone new comes along spouting the Social Credit credo like its a novelty.

 

[Toro]

absolutely

I'm always surprised when someone new comes along spouting the Social Credit credo like its a novelty.

Bingo!

You also see this in the Canadian Action Party.

 

[Toro]

Where does it show any interest coming in? That's my question. I know they pay the interest, but you say they receive interest payments on money they have borrowed. The only interest payments I see, is all negative numbers. The only place I see a positive # is on the interest on refunds of tax collections. Yes they collect interest on bonds......How does that go again...Oh yeah! ....that's
not relevant.

The government puts aside funds for future obligations and invests in government bonds. This is where the interest income comes from.

These are all the funds
Civil service retirement and disability fund
Military retirement Foreign service retirement and disability trust fund
SMI interest
HI interest
Unemployment trust fund
Railroad retirement
Airport and airway trust fund
Other on-budget trust funds Interest not offset in 901

Once again you're not paying attention: I said "why don't they show the gross interest number"

That's where your famous lines came ......again "that's not relevant"

How the government chooses to display its interest costs on a web site for public consumption is completely and totally irrelevant to any discussion about monetary policy.

Unless you don't understand monetary policy and/or accounting.

I most certainly do, and the federal reserve holds American bonds and gets paid interest on them because the government deposited them as collateral on their loan from the reserve. It is the reserve that collects this interest not the American gov't. You have not shown anyone that the American gov't receives interest from the federal reserve.

This is wrong. The Fed acts as a depository for the US government. That is why the government deposits debt with the Fed. That is one of the functions of the Fed. It is the bank of the government

The Fed owns treasury securities because it purchases them in the open market to effect the interest rate, not because the Fed is funding the US government. Government funding of its debt comes almost entirely from investors.

Serendipitously, I found this at work today while flipping through some research

Half of US government funding comes from foreigners.

Cell 768 shows $-552,000,000....that's a negative by the way.....interest on loans to federal financial bank.

That is wrong. A negative sign indicates income from the source, not an interest expense. That's why the entry Interest received by on-budget trust funds: all have negative numbers.

And that is interest income from the Federal Financing Bank, not the Federal Reserve. They are different.

The Federal Financing Bank (FFB) is a government corporation, created by Congress in 1973 under the general supervision of the Secretary of the Treasury. The FFB was established to centralize and reduce the cost of federal borrowing, as well as federally-assisted borrowing from the public. The FFB was also established to deal with federal budget management issues which occurred when off-budget financing flooded the government securities market with offers of a variety of government-backed securities that were competing with Treasury securities. Today the FFB has statutory authority to purchase any obligation issued, sold, or guaranteed by a federal agency to ensure that fully guaranteed obligations are financed efficiently.

http://www.treasury.gov/ffb/


Interest received by on-budget trust funds:

You have shown a balance sheet for the Federal Government ....not for the Federal Reserve. You will never find a balance sheet from the Federal Reserve. Never. For god sake, the federal government does not even have access to it. In my posts if I refer to "the fed" I am referring to the federal reserve. Now when you say "fed" what are you referring to ?

The Federal Reserve.

I'll post it again for you.

http://www.federalreserve.gov/releases/h41/Current/

See that the URL says "federalreserve.gov"?

See where it says "FEDERAL RESERVE Statistical Release"

See where it says

H.4.1
Factors Affecting Reserve Balances of Depository Institutions and
Condition Statement of Federal Reserve Banks

Etc., etc., etc.

Its the Federal Reserve balance sheet. I read it every two weeks.

posts with links....97,93,91,75,86,52,17,3,
but let me guess ....that's not relevant!

Not to someone who denies a link right to the Federal Reserve balance sheet is the Federal Reserve balance sheet!

No where has anyone shown me that the interest on any national debt goes back to the government.

You said you'd never find an income statement for the Fed.

Here you go. The audited financial statements of all 12 regional fed banks.

Boston Fed
http://www.bos.frb.org/about/ar/ar2005/finstate.pdf

New York Fed
http://www.newyorkfed.org/aboutthefed/annual/annual05/finance.pdf

Philadelphia Fed
http://www.phil.frb.org/publicaffairs/annualreport/2005/ar05_financial-reports.pdf

Cleveland Fed
http://www.clevelandfed.org/Annual05/PDF/CompFinancials_2005.pdf

Richmond Fed
http://www.richmondfed.org/publications/economic_research/annual_report/2005/pdf/financial.pdf

Atlanta Fed
http://www.frbatlanta.org/filelegacydocs/ar2005_financial.pdf

Chicago Fed
http://www.chicagofed.org/about_the_fed/2005_annual_report_financials.pdf

St. Louis Fed
http://www.stlouisfed.org/publications/ar/2005/images/pdfs/financials.pdf

Minneapolis Fed
http://www.minneapolisfed.org/pubs/region/06-05/2005financials.pdf

Kansas City Fed
http://www.kansascityfed.org/PUBLICAT/annreprt/2005/2005ARFinancials.pdf

Dallas Fed
http://dallasfed.org/fed/annual/2005/ar05.pdf

San Francisco Fed
http://www.frbsf.org/publications/federalreserve/annual/2005/financialreports.pdf

I even went to the trouble of adding up all where all the profits went for each and every bank.

Reserve Bank , Distribution to the US Treasury , Distribution to Member Banks , Contribution to Surplus
Boston $1,937 $51 -$1,036
New York $10,269 $215 $255
Philadelphia $268 $31 $450
Cleveland $799 $65 $1,014
Richmond $0 $198 $1,160
Atlanta $1,420 $42 $375
Chicago $1,919 $50 $113
St. Louis $768 $16 -$92
Minneapolis $407 $15 -$9
Kansas City $572 $10 $22
Dallas $1,113 $9 $18
San Francisco $1,996 $80 $66
Total $21,468 $782 $2,336
Perc. Of profits 87% 3% 10%


The Federal reserve banks paid $21.5 billion in profits back to the US Treasury, or 87% of all profits. $782 million went to the member banks. You can look each and every one of those numbers up in the links I provided.

and the links that toro has provided definitely shows that the U.S. is .......insolvent ....thanks buddy!

Yeah, if you can't read a financial statement!

 

[Albertabound]

You said you'd never find an income statement for the Fed.

Here you go. The audited financial statements of all 12 regional fed banks.

Fantastic! Now I don't imagine you found any statements on "the federal reserve" bank. I'm not really concerned with the regional banks. Because it is all sent to the fed. reserve and what goes on from that point on is not recorded.......at least not for public viewing.

These are all the funds
Civil service retirement and disability fund
Military retirement Foreign service retirement and disability trust fund
SMI interest
HI interest
Unemployment trust fund
Railroad retirement
Airport and airway trust fund
Other on-budget trust funds Interest not offset in 901

Yes , I agree they collect interest off of these funds, there is no doubt about it. The total interest accumulated from the federal reserve however is never disclosed and so you nor anybody else has no idea how much the federal reserve accumulates from interest....because it is not published.....anywhere. A financial statement from the U.S. of America is not a financial statement from the federal reserve. 12 regional banks submitting their financial statements is not a financial statement from "the federal reserve bank". Once it hits the federal reserve, which is the 12 regional banks place of deposit no books or statements are ever made public.

How the government chooses to display its interest costs on a web site for public consumption is completely and totally irrelevant to any discussion about monetary policy.

So what you are saying is anything posted here in relation to that web site is irrelevant. Thank you very much.

Its the Federal Reserve balance sheet. I read it every two weeks.

1. Factors Affecting Reserve Balances of Depository Institutions

Taken right from your link......see where it says.......Balances of Depository Institutions.........once again......this is from the 12 regional banks.....not "the federal reserve bank"

The Federal reserve banks paid $21.5 billion in profits back to the US Treasury, or 87% of all profits. $782 million went to the member banks. You can look each and every one of those numbers up in the links I provided.

When you make $40,000,000 per hour it's pretty much a piss in the wind
http://mwhodges.home.att.net/debt_b.htm

Despite these warnings, Woodrow Wilson signed the 1913 Federal Reserve Act. A few years later he wrote: I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men. -Woodrow Wilson

 

[Albertabound]

wrong and ignorant........deleted myself

If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks...will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. -Thomas Jefferson

 

[Toro]

Fantastic! Now I don't imagine you found any statements on "the federal reserve" bank. I'm not really concerned with the regional banks. Because it is all sent to the fed. reserve and what goes on from that point on is not recorded.......at least not for public viewing.

No, no, no, no, no, no, no, no!

There is no "federal reserve bank" separate from the regional banks where money is sent! This IS the federal reserve. What you are saying is absolutely, positively wrong! There is no other bank in the system other than the 12 regional banks!

Here is Wikipedia!

The Federal Reserve System is a quasi-governmental banking system composed of (1) a presidentially-appointed Board of Governors of the Federal Reserve System in Washington, D.C.; (2) the Federal Open Market Committee; (3) 12 regional Federal Reserve Banks located in major cities throughout the nation; and (4) numerous private member banks, which own varying amounts of stock in the regional Federal Reserve Banks. Ben Bernanke serves as the current Chairman of the Board of Governors of the Federal Reserve System.

http://en.wikipedia.org/wiki/Federal_Reserve

Notice

1. The Board of Governors
2. The Federal Open Market Committee
3. The 12 regional Federal Reserve Banks - these are the only banks in the federal reserve system!
4. The member banks, i.e. the banks you deposit your money and get your home loan at.

In picture form

From the Richmond Fed

The Federal Reserve System was created by the Federal Reserve Act in 1913 and began operating in 1914. The Fed is an unusual mixture of public and private elements. The Board of Governors, located in Washington, D.C., provides the leadership for the System. Twelve regional Federal Reserve Banks and their branch offices carry out many of the System’s day-to-day activities. The banks are legally private but functionally public corporations. This means that they are owned by member commercial banks in their region (that is, member banks hold stock in their Federal Reserve Bank) but they serve public goals.

The Federal Open Market Committee (FOMC) is another important part of the Federal Reserve System. The FOMC is the System’s most important policymaking body. In addition, the Board of Governors and the Reserve Banks have a number of advisory councils and committees that provide regional and private sector participation in the System’s activities.

The Member Banks. Approximately 38 percent of the 8,039 commercial banks in the United States are members of the Federal Reserve System. National banks must be members; state chartered banks may join if they meet certain requirements.The member banks are stockholders of the Reserve Bank in their District and as such are required to hold 3 percent of their capital as stock in their Reserve Bank.

Other Depository Institutions. In addition to the approximately 3,000 member banks, about 17,000 other depository institutions provide the American people checkable deposits and other banking services. These depository institutions include nonmember commercial banks, savings banks, savings and loan associations, and credit unions. Although not formally part of the Federal Reserve System, these institutions are subject to System regulations, including reserve requirements, and have access to System payments services.

http://www.richmondfed.org/publications/educator_resources/federal_reserve_today/structure.cfm

Where do you see "the federal reserve bank" on this chart where money can be sent?

The Board of Governors is a group of people. The FOMC is a group of people. The Advisory Council is a group of people. The banks do not send money to "the federal reserve" because they are the federal reserve! The regional banks send ~90% to the US Treasury, about 3% to its member banks in the form of dividends, retain the rest, and send 0% to some phantom central "federal reserve bank" somewhere.

Structure of the Federal Reserve System

http://www.federalreserve.gov/pubs/frseries/frseri.htm

Whatever you need to know about the Fed is here.

http://www.federalreserve.gov/general.htm

Yes , I agree they collect interest off of these funds, there is no doubt about it. The total interest accumulated from the federal reserve however is never disclosed and so you nor anybody else has no idea how much the federal reserve accumulates from interest....because it is not published.....anywhere.

That is because there is no other institution within the Federal Reserve system that collects interest! The only ones who do are the 12 regional banks! Nothing else to take interest exists!

A financial statement from the U.S. of America is not a financial statement from the federal reserve. 12 regional banks submitting their financial statements is not a financial statement from "the federal reserve bank". Once it hits the federal reserve, which is the 12 regional banks place of deposit no books or statements are ever made public.

There is no one singular federal reserve bank! It doesn't exist!

Again, you are also incorrect in that the Federal Reserve Board does provide a consolidated balance sheet.

Here it is. Again.

http://www.federalreserve.gov/releases/h41/Current/

And the reason why they provide a consolidated balance sheet is to provide a snapshot of the money supply in the United States.

 

[BitWhys]

Bingo!

You also see this in the Canadian Action Party.

No tendency to natural monopoly. Capacity to be regulated. No tendency to fail to develop in response to the market (except for the branch office thing - but the dippers are working on that). The essence of being influenced by market forces (with the occassional kick-start from the central). Good profits but certainly not enough to replace taxes any time soon.

I'm as left-wing as the next average joe up here but even I know that nationalizing the banks is a recipe for disaster. Iffy separation of church and state is annoying enough. Marrying the state to money supply is something most despots can only dream of.

 

[TomG]

Is the US federal government insolvent?

Probably not: The massive US balance of trade deficit continues to be funded by US trading partners who willingly or otherwise hold US debt--mostly as Treasury Notes. US debt is the primary international currency reserve system. The currency reserve system has the incidental effect of requiring developing nations to hold assets of low yield US debt rather than assets of productive capital. In effect, the poorest people on earth loan money that enables the richest people on earth to continue a consumption binge and at the expense of their own economies. The system is under considerable stress at the moment. It survives only to the extent that US debt is viewed as a stable store of wealth (see J. Stiglitz).

Insolvent? Probably not: The US could convert huge stores of private wealth into federal assets. For example, the US could raise taxes. A huge percent of the world’s wealth is exposed to US taxation. If pressed, the US could simply invade other countries (economically, socially or militarily) and seize foreign assets.

Insolvent? Probably not: The US can simply print currency and expand bank money. And, there are other ‘probably not’s. But, will all these ‘probably not’s’ work? Probably not: The price of the fixes is high risks of inflation, instability and economic and social collapse.

Is the US insolvent? The concept is a little difficult to apply to nation states. Nations make legal tender. The tender can be backed a government’s ability to seize assets. The Egyptians, Greeks, Persians, Romans, Norse, English etc. formed empires and simply took what they wanted from their neighbors. The Roman Aureus was valued on the point of a spear. Its gold was a minor contribution. Rome became morally bankrupt before it became financially bankrupt. A US official said on national network TV ‘We are now an empire and have to start thinking like one. Are we moderns so different? Medieval monarchs solved their debt problems by killing their debt holders. For us individuals, bank manager assassinations are frowned on. We become insolvent instead.

Is the US insolvent? No: It seems a little more like a pyramid scheme. Bill Gates, Warren Buffet, the Chinese and other governments have gotten out of their dollar holdings or are hedging them. Pyramid schemes: By the time you hear of one, you’ve already lost. Do I want to trade oil for T-notes, probably not?

 

[BitWhys]

It can't be healthy when consumer credit is growing twice as fast as GDP.

 

[Toro]

It can't be healthy when consumer credit is growing twice as fast as GDP.

Depends on the context.

Consumer credit as a percentage of the economy has been rising since the 1920s. There was a time that social progressives agitated for lending to the middle class, let alone the poor, because banks would only lend to the wealthy. The rise of the credit card is the democratization of credit.

Having said that, I think rising consumer credit at this pace isn't good. But that doesn't mean something bad is going to happen.

 

[EagleSmack]

That was classic Toro. I guess the guy bit off a bit more than he can chew as they have not been able to prove their point and you have completely dominated this thread.

 

[BitWhys]

...But that doesn't mean something bad is going to happen.

I agree. But at the very least it does make for a noteworthy increased exposure to risk.

 

[BitWhys]

That was classic Toro. I guess the guy bit off a bit more than he can chew as they have not been able to prove their point and you have completely dominated this thread.

um

"they"?

 

[darkbeaver]

No tendency to natural monopoly. Capacity to be regulated. No tendency to fail to develop in response to the market (except for the branch office thing - but the dippers are working on that). The essence of being influenced by market forces (with the occassional kick-start from the central). Good profits but certainly not enough to replace taxes any time soon.

I'm as left-wing as the next average joe up here but even I know that nationalizing the banks is a recipe for disaster. Iffy separation of church and state is annoying enough. Marrying the state to money supply is something most despots can only dream of.

I'm a lefty, your a mushy liberal, nationalization is generally thought of as leftist policy, separation of church and state is a benchmark of leftist thinking. Marrying the state to the money supply is in fact what to a great extent has prevailed among the western democracys especially Uncle Sham. And it's precisely the aim and direction of Adolph Harpercon and co; Check out the Fraser Institute and the CCCE. :wave:Is nationalization of the money supply always despotic?

 

[EagleSmack]

um

"they"?

um... typo.