Dear K,
Thank you. I confess that lately I developed a feeling that the Gulch has changed. I admit that perhaps I have changed, but, honestly, I do not think so. The change I perceive is that many comments and replies are less thoughtful, frequently colored by emotion-caused blindness to facts and existence. Some of the tirades about politics I find unpalatable. With all that, I found myself frequently tempted to add my two cents. If I did, I would spend most of my days trying to point out logical fallacies and distortions of fact (or omissions). I decided that I enjoy other things in my life more than to spend all my time trying to ... "straighten meandering rivers" (this a translation of a Yugoslav expression that does not sound as good in English). I like its image of an impossible task.
As you probably noticed, I have participated much more intensely in some discussions and praised the initiators for bringing the subjects up.
I like careful thinking and learning from those who are better at it than I am. What turns me off is people that show unmistakable signs of closed minds. I grew up under the communists and had enough of that mindset for the rest of mu life. It is almost like an allergy.
I wish to thank you personally for the sort of invitation. It means to me more than I can express. But, coming from you, I thought it absolutely necessary to give you a truthful answer.
My main interest here is exploration and deeper knowledge of the Objectivist philosophy. For thoughtful political commentary, there are better sources.
Thank you, dear K. Stay well and keep in touch. So shall I.
EDIT: Spelling correction and missing words

hey martimus! come in more frequently. love, k

Exactly right. +1

And you think that the attacker would be willing to spend billions of their funds to do what? I think that it is nonsense.

Life is tough. As mother used to say, things are never what you used to think they were going to be.

"The US has done it before, and it will probably do it in the future."

When? If you are referring to Nixon and the move to get off a hard currency standard, that was a fundamental change to how we were declaring the value of our currency and it acknowledged the simple fact that other nations were looting the US' own gold holdings by virtue of their own devaluations. I do not in any way equate that situation to what is being proposed here.

"I bet Trump knows more about debt than any of the folks now in power."

I don't want ANY of the parties to know about debt! I want them to know about productivity and fiscal responsibility! I want them to operate on the principle that bankruptcy is the last resort not the first and that one's reputation suffers as a result! I want people to get back to honoring their commitments - not taking out commitments which they had no intention of repaying in the first place!

What we are talking about is a representation of the values of America and whether or not we want to viewed as looters like many other nations. Looters use bankruptcy to avoid their contractual obligations. That anyone here is a proponent of this mentality is profoundly disappointing.

The US has done it before, and it will probably do it in the future. I bet Trump knows more about debt than any of the folks now in power.

And when they change the rules, their credibility and trustworthiness takes a major hit for decades, making it much more difficult and expensive to obtain future financing. Again, see Argentina, Zimbabwe, etc.

Can the US do it? Probably. Does it carry severe consequences? Absolutely. Do I think Trump considered these circumstances before profferring his opinion? I doubt it.

It all depends upon who makes the rules. Rules are always subject to change at the whim of the government, and that was my point.

like you indicated he wants to renegotiate to buy back bonds at a discount to reduce debt, not reduce debt thru a bankruptcy...you might be able to get a replay thru Fox Business News..it was around 7:45 am eastern...

Can you tell me what was said?

I don't mind clarification, but his initial proposals were a lot more of his "speak first, think later" methods. To me, those are the sign of someone who needs to sound authoritative on everything and wants to be seen as having an answer - any answer - rather than the right one. That particular propensity of "The Donald's" concerns me greatly because it is much harder to negotiate when one has already laid out a position...

Trump was on Fox Business News this morning clarifying what he said vs what was reported by the media...kudos for him for broaching the subject...no politician will touch the subject...

i am in my late 60's and i am not concerned for me and my future, but my children (adults now) and my grandchildren face a very different future that i did at their age...

in a democracy, majority rules...including tyranny of the majority...and a majority that has demonstrated a willingness to surrender everyone's freedom and liberty in exchange for a politician's promise of "security"...a slide into totalitarianism...

i remain optimistic that ideas like Trump's can be discussed and accomplished for a future for everyone...we will see...

Legally, that's simply not true. Bankruptcy is a legal mechanism whereby creditors are forced to accept a settlement which devalues their outstanding loan balance, but the parties involved have to be subject to the legal enforcer. While this may hold true for domestic bond holders, it does not for foreign bond holders or foreign nations, where treaties are the appropriate legal instrument.

And printing money devalues the entire currency base. It's the failed policy we've been using for the past eight+ years. If you want to print money to pay off creditors, you are in fact introducing massive inflation and across-the-board currency devaluation. In the situations where we have seen that in the past century it has led to an absolute disaster for those nations. See Argentina, Zimbabwe, and others.

But that is one of the major differences between what Trump proposes and a real bankruptcy. Bankruptcy court renegotiates existing debt loads but also places restraints and conditions on the applicant which are binding. This is simply the renegotiation without any constraint - which is why to me it is fundamentally flawed.

From a technical point of view, yes. But in reality all the govt has to do is say the BK code now applies to the government. Or, just as easily, print enough money to pay the debt or just reneg and let the bondholders sue the govt for the money due --- which the govt cold then just print and give to them.

it is a two-edged sword...but better to take some pain now, then to see everything collapse in the future and end up a 3rd world country...but it encourages politicians to continue what they are doing...damned if you do...damned if you don't

I will have to say that I dont really like the idea of bankruptcy. I can understand that creditors should take a hit when its obvious that their claims just cant be satisfied (unexpected natural disaster loss completely wipes out the property used as the basis for the loan for example). Its best for the creditors to lick their wounds and move on.

In the case of the USA, it HAS declared bankruptcy a number of times already. When Nixon went off the gold standard and refused to pay the debts in gold to other countries- that was essentially what Trump is talking about. My $2 bill that I saved from college in the 60's which is now worth less than 20 cents in any sort of real value- tell me I didnt take a haircut on that, as did everyone else who had the stupidity to trust our government to honor its debts. Isnt that essentially "bankruptcy" without calling it that.

When the repubs complain Trump is abandoning fiscal responsibility, I wonder what they said about the Bush years, and what about Paul Ryan's big sellout on the latest deficit budget? They are hippocrites.

With all the unfunded liabilities out there, the USA is already bankrupt. Our money is worth essentially nothing in terms of real value when the debts are paid. We might as well admit it, basically as Trump is doing.

That said, accepting that you are bankrupt should mean that you analyze what got you there, and you STOP doing those things before you indicate to your creditors that they will get nothing, or at least a reduced amount.

Trump didnt do that- which I think is not a good thing, and I agree with you on that ..

At some point, the chickens will come home to roost on this debt. There isnt the money there to pay off all the entitlement promises, and those people will have to take a haircut, as well as anyone who has dollar denominated assets. What can I say. We have all taken a haircut already with inflation over the last 50 years.

Bringing out whats been done is a GOOD THING, and I hope people can be made to realize whats happened and who did it.

I used to live in Greece and predicted this would happen 20 years ago, though I hoped it wouldn't.

The saddest part is that no one else seems to be willing to learn from their example - least of all the United States.

Is it really all that realistic to destroy our credit rating simply to renegotiate our current debt without first putting in place a spending model which drastically reduces current spending and constrains future borrowing?

An interesting idea, but who is going to buy them? Even the current T-bills face negative payouts when factoring in inflation...

Both Chapter Seven and Chapter Nine are US bankruptcy law relating to corporations. They don't hold power over the US itself and its debt obligations. This is a significantly different situation.

I agree that inflation is evil 100%. I agree that the past eight years (especially) we've been sold a pack of lies financed by funny money. But when one declares bankruptcy, one destroys their credit worthiness - something which has never been done in the history of the US. That Trump mentions it so cavalierly is an indication that he has no idea how it works in regard to nation-states and is thinking about it only in terms of business. And I note two items during Trump's previous bankruptcy hearings: 1) that he laughed at all the creditors who were getting screwed even though he, himself, took no financial hit whatsoever and 2) that in each of the four cases the bankruptcy judge mandated that Trump's participation in a management role be terminated because he was directly linked to the mismanagement in the first place.

I do not hold Trump responsible for the nation's debt. But that he would suggest effective bankruptcy on the part of the United States without first necessitating deep spending cuts is a sign that he is no better than our current politicians in dealing with debt problems. Maybe you missed his announcements, but Trump supports borrowing our way out of our economic malaise in complete ignorance (willful or otherwise) that it's already been done twice in the past 20 years!

Not only the Washington Post, but the NY Times and theBlaze are just reporting what Trump said in an interview with CNBC. Go back and watch the interview if you question the source.

"He would try to renegotiate - not renege on - debt."

Bankruptcy is exactly that: reneging on payments owed. It's legal, but hardly ethical. And we're not talking about an individual business in this case, but the most productive nation on the planet. What happens if we "renegotiate" our outstanding debt? Our debt service rating tanks and our interest rates rise, putting us on a very dangerous path to insolvency.

Has the government been a good steward of our money? Absolutely not - we agree on that. The problem is that we have dug a huge hole for ourselves that now we must fill in. We both agree that QE is a gimmick for devaluing the currency and our corresponding debt so that the politicians can continue to play this game of buying things they can't pay for to stay in power. Is Trump really going to change that? I don't hear any calls for a Balanced Budget Amendment or reduced spending, but I do hear calls for "taking care of people" - code words for more welfare. And just this week he said we need to spend our way out of recession by investing in infrastructure projects! Does that sound like someone who is pushing for smaller government or government constraint?

What would happen if we all stood up to the central bankers that have printed worthless paper and started over with currency backed by gold and silver.

In spite of the the fact that progressives have pissed away that fiat currency...it was the Federal reserve, not the US reserve that created this debt...they are the one's that printed it and made things worse, sold worthless paper to bond holders...have they not?

It is a lot different to declare bankruptcy for a business unit structured that such only affects the assets of that unit as compared to the country going belly up on its obligations. There is also the matter of many orders of magnitude greater debt.