Ron Paul really needs to stop using the term "liquidate the debt"

[hauntedbaby]

I don't mean this as an insult to anyone, but the majority of people are stupid. And this includes the educated people. Most people don't think for themselves. If you want to reach the average person, you have to give them simple answers.

tttppp I can totally appreciate this point of view. HOWEVER - if someone wants to posture themselves on the side of enlightenment, I think they should at the very least research the terms that they do not understand before assuming the role of an "advice giver" to somebody like Ron Paul. Does that make sense?

 

[realtonygoodwin]

I honestly respect and take your response into consideration. However, what we are looking for is a shift in culture, wouldn't you agree? I think that perhaps we have to meet in the middle on this. The population has to become better at thinking critically, which leads to coming to independent conclusions (read: not being so susceptible to being a sheep).

A sheep cannot reach conclusions independently. That's a pretty simple definition, right?

I appreciate your civility!

I disagree that what we are looking for is a shift in culture. Ultimately, perhaps, but not right now. What I am looking for is to get Ron Paul elected President of the United States. And that starts with winning the Republican nomination, which means he has to win primaries and caucuses. Which means he needs to connect with voters and not confuse them or talk over their heads.

Only then can the culture shift occur. It can occur otherwise, but it will take much longer and involved our country doing much worse than we currently are.

 

[Af-Pak]

I don't think RP talks about "liquidating" the federal debt since that would imply paying it off, and that is something that cannot be done since the Federal debt is more than the GDP of the US. RP has hinted at this point many times.
The "liquidating debt" that he talks about is the debt of the corporations in the form of CDO (Collaterlized Debt Obligations) and CDS (Credit Default Swaps) that the government buys out from the Big Banks and the Financial Corporations paying trillions when actually they are worth nothing as per MARKET VALUE. In essence, he is saying, let them go bankrupt, let them loose their money since their toxic assets were worth nothing in the first place. Please refer to my earlier definition:

"Naah ! It (liquidating debt) can have multiple meanings depending on the context its used. Well, in the context of the financial crisis, liquidating debt means valuing and subsequently recovering the actual MARKET value of the debt instrument [derivative or mortgage backed security] which would be much lower following a burst in the bubble, as opposed to government buying the debt at the phony inflated value through a bailout."

 

[The Free Hornet]

To clarify - the problem is not Ron Paul's vocabulary. It is yours, and America's.

Do you feel better having posted that? Someone asked about the 5-minute explaination for which, this Mises article was posted:

The bad loans should be liquidated, that is, sold at a discount to entrepreneurs who will specialize in their collection.

Allow the failures to occur. Fine and simple enough. But here is where it gets confusing the context of national policy. Of which debt do we speak? The Mises article is talking about bailing out private banks holding bad real estate assets (which have plummeted in value). Maybe Ron Paul needs to say "liquidate private debt, don't provide bailouts".

My first thought when debt is mentioned in this context (debate, national economy) is the national debt. I do not think Ron Paul means to liquidate that debt (!). More so, I don't think the government can. Largely, the government doesn't hold debt - except what it owes to itself after borrowing from the SS trust fund. Our debt is held by private and foreign entitites. They can sell that debt for pennies on the dollar but the amount of the debt owed would remain the same unless Uncle Sam were to renegotiate or default on debt instruments.

Again, I think it would be easier if "private" was referenced. Also, there may be too much focus on the business cycle as that is separate from the regulatory and tax burdens caused by the government. Even without Tarp, we could be in a "business cycle" recession because regulation inhibits business and it too cycles with the power changes in Washington.

What is the easiest way to manufacture something without the demands of Washington? Import it. Importation is the ultimate dodge: taxes, wage and benefit laws, regulations, unwelcome hazards (discrimination, harrassment, and unreasonable product liability lawsuits).

I like Ron Paul's "liquidate the debt" and "business cycle" talk but it could be integrated with "national debt", "regulatory burden", and "over spending". Hey, I am not an economist either. Also, wouldn't talk of cutting spending/regulations be more welcome on the national stage than ending FDIC (Federal Deposit Insurance Corporation - it prevents debt liquidation and is a moral hazard)? At least until the national banks and Federal Reserve system is dismantled...

 

[anaconda]

I made a thread on this months ago. What exactly, is, Ron's plan for "liquidating the debt?" Federal Reserve public auction? What?...

There are supposedly something like $60 trillion book value in worthless derivatives swirling around the planet.

 

[tttppp]

tttppp I can totally appreciate this point of view. HOWEVER - if someone wants to posture themselves on the side of enlightenment, I think they should at the very least research the terms that they do not understand before assuming the role of an "advice giver" to somebody like Ron Paul. Does that make sense?

No that does not make sense. Its Ron Paul's job to appeal to the average person. This is his biggest weakness. He does a great job appealing to people who think for themselves or take the time to research all the candidates, but this is a minority.

The average person is attracted to simple, definitive answers. This is one advantage Mitt Romney has in these debates over Ron Paul. Sure if you think through Romney's responses, you'd know his answers are worthless, but most people don't. Mitt gives simple answers, is short and to the point, and is definitive. He sounds like he knows what he is talking about (even though he doesn't), and thats what is most important to most people.

And by the way, I do have experience in business in sales so I do feel comfortable as an "advise giver" to Ron Paul.

 

[hauntedbaby]

No that does not make sense. Its Ron Paul's job to appeal to the average person. This is his biggest weakness. He does a great job appealing to people who think for themselves or take the time to research all the candidates, but this is a minority.

The average person is attracted to simple, definitive answers. This is one advantage Mitt Romney has in these debates over Ron Paul. Sure if you think through Romney's responses, you'd know his answers are worthless, but most people don't. Mitt gives simple answers, is short and to the point, and is definitive. He sounds like he knows what he is talking about (even though he doesn't), and thats what is most important to most people.

And by the way, I do have experience in business in sales so I do feel comfortable as an "advise giver" to Ron Paul.

I'm afraid you might have misunderstood me. I wasn't trying to indicate anything regarding your credentials to offer an opinion on Dr. Paul. I was trying to demonstrate that our comrades in this movement have an intellectual responsibility to understand the issues. And if they do NOT understand the issues, they should be more concerned with changing that than they should with offering advice.

Honestly I do not object to the idea that perhaps the vocabulary could be optimized for the general voter. I am simply objecting to the acceptability of somebody being CONSCIOUSLY confused or ignorant about a concept, and not recognizing their responsibility to be aware of the issues independently before getting three steps ahead of themselves.

As Ron Paul said "If you have the knowledge, you are responsible". If the poster knows they are ignorant of the term, which is fine, perhaps they should look it up for themselves. And then, if they decide that Ron Paul isn't using the most effective language, they have at least some sort of foundation to base this assessment on.

 

[Feeding the Abscess]

Here's why he says liquidate the debt:

If he's asked in the debate about what that would entail, he'd be able to bring up bailouts and government intervention. If he were to skip straight to the bailouts and government intervention, the follow up question may well be:

wut about the jorrbz, people will be homeless and starving on the street

 

[tttppp]

I'm afraid you might have misunderstood me. I wasn't trying to indicate anything regarding your credentials to offer an opinion on Dr. Paul. I was trying to demonstrate that our comrades in this movement have an intellectual responsibility to understand the issues. And if they do NOT understand the issues, they should be more concerned with changing that than they should with offering advice.

Honestly I do not object to the idea that perhaps the vocabulary could be optimized for the general voter. I am simply objecting to the acceptability of somebody being CONSCIOUSLY confused or ignorant about a concept, and not recognizing their responsibility to be aware of the issues independently before getting three steps ahead of themselves.

As Ron Paul said "If you have the knowledge, you are responsible". If the poster knows they are ignorant of the term, which is fine, perhaps they should look it up for themselves. And then, if they decide that Ron Paul isn't using the most effective language, they have at least some sort of foundation to base this assessment on.

It doesn't matter what you are selling or who you are selling to, it is the sellers job to make it simple enough for their audience to grasp what you are talking about and its importance. This thread is a very good example. This site is filled with Ron Paul experts who are usually smarter than the average person. In this thread we have about 20 different interpretations of what Ron Paul was saying.

 

[LibertyEagle]

It's not that difficult.

The government should not have bailed out failed corporations/banks.

The entity should be allowed to go through bankruptcy. The assets of that company would end up being bought by another company at whatever price the market bore. This is allowing the debt to be liquidated, or washed out of the system.

Example: Think about the real estate derivatives that were all over the news. JP Morgan came up with this stupid idea and sold tons of these things. These were based off of bad loans that should never have been made to people who couldn't really afford a house. When the jig was up with these, if the government would have stayed out of it, the price on these instruments would have fallen to pennies on the dollar. At some point in their fall, they would have been deemed a desirable investment by another company and they would have been purchased. So, here, the debt would have been allowed to liquidate out of the system.

 

[GoRon2008]

OP has a point and it has been brought up many times before (not this particular word).

I don't think a lot of you guys understand just how dumb most of the country is. Depending on where you live, and how much money you make, or what ethnic background, it can vary significantly.

I have been around all types of people. Rich to homeless. Let me tell you, MOST people can only get into a candidate who is "feel good". Meaning they say fancy things that sound good but don't necessarily have any real information or facts.

Somebody close to Paul should just run through a handful of Pauls talking points and policies and maybe give him a few suggestions on how he could change up the wording a little bit. I love Paul for the fact that he stays true to what he says and believes. But I must admit, hearing the exact same thing, with the same wording time after time, I can see how it might not attract new people.

Paul needs to make an attempt to change things up a little without actually changing his views, which we know he wouldn't do anyways.

But Im sure the poor guy is being worked to death, and I don't really expect him to say things that are not natural for him. When your getting hammered with the same stupid questions over and over, its gotta be hard enough.

Paul did good in the Debate tonight. Im glad he is getting down and dirty with those assholes. He just needs to think about the less edumecated folks.

Im in South Carolina and I can tell you right now.... the average vocabulary is equal to that of a chicken.

 

[freeforall]

I'm starting to think none of you can simplify an explanation of liquidating debt. What is the point of arguing over what qualifies a person to offer advice to Ron Paul when people are simply trying to gain a better understanding? Not having a strong grasp of economic concepts does not make a person dumb or uneducated. It can simply mean there is a topic in which they do not have a natural interest.

 

[VIDEODROME]

It seems simply to mean we need to process the debt and work it out of the system.

I mean get rid of it for real not shuffle it around or bailout one group which then dumps the debt on the tax payers.


I take it to mean if I got in financial trouble and someone bailed me out the debt I started would still exist. I think he means we need to stop that from happening and creating an endless moral hazard cycle of further bailouts that just pass on the debt. Then all the debt just accumulates in the economy forming a bubble.

Maybe this is why he also puts emphasis on the problem of the Business Cycle in the same lecture. We ride a boom to the top but then bills come due and the economy falters.

 

[Orwell]

Liquidate the debt sounds fine to me... you already have people going completely apeshit over the loss of value in their real estate--which let's be honest, was COMPLETELY, utterly, and ridiculously overvalued. It's still obscene here in California.

Definition:

Liquidation is the process of converting assets into cash to pay off creditors. This process is used in personal and corporate bankruptcy as a solution to getting out of debt with lenders.

In a free market, without artificial intervention, homes aren't really an appreciating asset that people use in lieu of real investment.

 

[aowen]

You guys want the official answer?... Here it is:

Liquidation is the process of converting assets into cash to pay off creditors.


Further explanation:

When Dr. Paul talks about this he is not talking about the national debt. He is referring to companies being bailed out. Let me use General Motors as an example (transfer the specifics to other examples such as banks in your head).
1. General Motors goes bankrupt and owes people money
2. General Motors sells assets (manufacturing plants, tooling for building cars, brands, etc)

Number two is an important step. Here's why; who is going to buy these assets? Answer = A person, people, or a company that thinks they can use these assets more effectively than GM was. Hypothetically Ford might buy them, or even a start up car company.

3. General Motors uses funds from selling assets to pay off creditors


Results:

Tax payer = not stuck with the bill
GM = relieved of assets that it obviously wasn't using effectively (it was losing money with them)
Entrepreneur = Gets to try their hand at effectively using these assets to produce a product or service that will benefit the economy
Economy = SUCCESS!!
Debt = OFFICIALLY LIQUIDATED

Here is the result of bailout: (sticking with the GM example) GM is rewarded for bad behavior by having the tax payer jump in and pay for its incompetence. All the assets are still in the hands of the person/company who has proven that they are not fit to use these assets effectively. Economy = FAIL!!

 

[freeforall]

Thank you aowen!

 

[tempest]

It means don't bailout, plain and simple

 

[tttppp]

It means don't bailout, plain and simple

Thats funny. I heard that idiot Ben Stein saying the answer to our problems was to bail out more banks.

 

[idiom]

It means letting the 19 biggest banks go boom overnight.

It means people having their interest rates skyrocket and having all the foreclosures hit the market.

It means a lot of very painful things.

But they must all happen or it gets worse.

Even "balancing the budget" actually means cutting GDP by 12%. Yes a whole 12% of GDP is made up, its borrowed government money.

It would be awesome if Ron Paul just said, "Why does it feel like we are in a depression when the economy seems to be flat by the numbers? Because 12% of GDP is a lie. It is pure government borrowing. The wealth doesn't exist, Obama and Congress are just pretending it does so that we all get re-elected."

 

[Working Poor]

umm. i feel stupid for asking this, but can someone explain this as if I'm 5?

Uncle Ron is going to let the big bad business people who have their fingers in every body's pie go down the drain.