Is government allowed to spend money it doesn't have?

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Strictly speaking, no, it’s totally illegal.

Loosely speaking, we as a nation have basically been a giant social experiment and game for certain elements and entities since at least 1913, none of which operate within the spirit of the Founding Fathers of this Nation.

The reason for this is 1) the misuse and misapplication of Constitutional powers and case law determined by the Supreme Court. 2) the arguable semantics involved in the fruition and reaction to #1 are so complex, and Americans are increasingly so stupid due to bad idea clubs like the Department of Education, that one must almost be a historian and lawyer to even begin approaching the arguments as presented through semantics.

Basically, look at what the Israelites did with the simplicity of the original commandments and how they devolved. Now apply that to America from its inception as an officially declared nation. Hear those hoof beats?
 
Every day of the year, the government spends about $4 billion more than it takes in. So I guess it’s a moot question. The only question, is when does the system collapse?
 
It is legal for the government to borrow money. Its actually a very necessary power to have in times of War for instance. The government needs to be fiscally responsible though just like an individual does. You don’t take out a loan to buy a plasma tv or that really cool sports car without a solid plan as to how your going to pay it back and without seriously asking yourself whether its worth going into debt to get it.
 
I agree it is legal for the government to borrow money. In the case of the United States, the government spends about $10 billion a day but only takes in about $6 billion a day, leaving $4 billion to be borrowed every single day. It’s not illegal. It’s just not sustainable. Eventually lenders will demand higher rates or be unwilling to lend. Can the government cut back it’s spending by 40% without causing riots? On the other hand can it keep borrowing 40% of its spending without collapse?

Taxing the rich won’t solve it. They don’t have $4 billion a day to give.
 
Apparently it is. And it seems to be doing so without the consent of its country’s constituents, and without fear of consequence, at least anywhere near in proportion to the magnitude of the transgression.
 
A character in Heinlein’s The Moon Is a Harsh Mistress asks “when is it moral for a government to do that which it is immoral for an individual to do?”

By that standard most gov’t actions are immoral. Legal? Meh. Most people’s reaction is Baaaaa.
 
Technically no. It pays its bills from the funds it has. If it has insufficient funds it borrows from (sells bonds to) foreigners and other entities. If this is still not enough it sells bonds to the Federal Reserve, which prints the money to buy them.
 
ProVobis said:
Technically no. It pays its bills from the funds it has. If it has insufficient funds it borrows from (sells bonds to) foreigners and other entities. If this is still not enough it sells bonds to the Federal Reserve, which prints the money to buy them.
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In other words, it is incorrectly managing the people’s money and not acting in good will, with respect of human dignity and justice because it places the national population at the possible pointy end of another nation’s blade.
 
When the United States entered World War II right after the Great Depression, where did all the money to build warships, tanks and aircraft come from? After Hitler came to power, where did all the money come from to build warships, tanks and aircraft?

During the Vietnam War, from 1964 to 1973, where we dropped more bombs than during all of World War II in Europe, where did the money come from for tanks, aircraft, especially helicopters, artillery and the rest?

Peace,
Ed
 
This is another massive case of intergenerational injustice, about on a par with the lousy environment we’re bequeathing to future generations.
 
edwest2 said:
When the United States entered World War II right after the Great Depression, where did all the money to build warships, tanks and aircraft come from? After Hitler came to power, where did all the money come from to build warships, tanks and aircraft?

During the Vietnam War, from 1964 to 1973, where we dropped more bombs than during all of World War II in Europe, where did the money come from for tanks, aircraft, especially helicopters, artillery and the rest?

Peace,
Ed
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All balanced budget amendments have a clause that allows for borrowing power during war.
 
edwest2 said:
When the United States entered World War II right after the Great Depression, where did all the money to build warships, tanks and aircraft come from? After Hitler came to power, where did all the money come from to build warships, tanks and aircraft?

During the Vietnam War, from 1964 to 1973, where we dropped more bombs than during all of World War II in Europe, where did the money come from for tanks, aircraft, especially helicopters, artillery and the rest?

Peace,
Ed
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Read the book, “End the Fed” … the author discusses exactly the question you raised.

[Ron Paul is the author]
 
edwest2 said:
When the United States entered World War II right after the Great Depression, where did all the money to build warships, tanks and aircraft come from? After Hitler came to power, where did all the money come from to build warships, tanks and aircraft?

During the Vietnam War, from 1964 to 1973, where we dropped more bombs than during all of World War II in Europe, where did the money come from for tanks, aircraft, especially helicopters, artillery and the rest?

Peace,
Ed
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With sale of a lot of war bonds. Also, don’t forget LBJ’s 10% war surtax in 1969 which helped with the cash flow and actually balanced the budget for a short time.

For a time the Pentagon issued 5% bonds to Americans to finance the Iraq War but that idea went out the window in 2007. Bernanke had other ideas.
 
Hi, Edwest2,

if truth be known the US has been borrowing money since BEFORE it was the US… publicdebt.treas.gov/history/history.htm Not mentioned with any great empahsis was the Congress’ efforts to default on these obligations (funny how some things just don’t change!) and where we get the expression, “Not worth a Continental!” historywired.si.edu/object.cfm?ID=437

But, maybe the real issue is that we are now at $15 trillion - which represents 100% of GDP. So, here we are in debt to the top of our heads - and no plan (for addressing entitlements which make up 50% of the budget… and growing) from our Congress on how we will reduce our indebtedness! The debt in nations like Greece and Italy suddenly takes on another perspective. There will come a day when China will say to the US (like the EU is saying to Greece and Italy), “Put your financial house in order or we will no longer buy any more US Bonds!”

God bless
edwest2 said:
When the United States entered World War II right after the Great Depression, where did all the money to build warships, tanks and aircraft come from? After Hitler came to power, where did all the money come from to build warships, tanks and aircraft?

During the Vietnam War, from 1964 to 1973, where we dropped more bombs than during all of World War II in Europe, where did the money come from for tanks, aircraft, especially helicopters, artillery and the rest?

Peace,
Ed
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Without the government, the money wouldn’t exist in the first place.

“Show me the coin that pays the census tax.” Then they handed him the Roman coin. He said to them, “Whose image is this and whose inscription?” They replied, “Caesar’s.” At that he said to them, “Then repay to Caesar what belongs to Caesar and to God what belongs to God.”
 
The United States has had debt, with a few exceptions, since the Revolution. The Washington Administration set in motion the federal government assuming the various States’ war debt. The US government working with credit has been around since the Founders.
 
Rhubarb said:
The United States has had debt, with a few exceptions, since the Revolution. The Washington Administration set in motion the federal government assuming the various States’ war debt. The US government working with credit has been around since the Founders.
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This is true. However, before Nixon, the credit of the United States, at least to some extent, was collateralized by the gold it was holding. Now the Fed is free to “print” as much money as it deems fit. And money is debt. See this.
 
ProVobis said:
This is true. However, before Nixon, the credit of the United States, at least to some extent, was collateralized by the gold it was holding.
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That’s because people were ignorant enough to believe that gold had intrinsic value.
 
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