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Except that there is no such law. Quoting from the treasury's website.

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise.

In other words, it is always legal to offer cash, but no requirement that any private entity accepts your cash.

How about some actual numbers?

TARP as a whole still has $41 billion in outstanding loans. If every current loan defaulted today, TARP would only lose about $31 billion (accounting for current profits). Projections from October (which don't count AIG's sale) were that TARP would lose $24 billion overall, having disbursed over $418 billion through its lifetime. Reality is that loss was always expected, as housing assistance was not intended to be recovered. Current estimates are for a slight profit on everything intended for recovery.

The billions that will be lost went to individuals, not the banks, auto industry, or any other big company.

How about some actual numbers?

TARP as a whole still has $41 billion in outstanding loans. If every current loan defaulted today, TARP would only lose about $31 billion (accounting for current profits). Projections from October (which don't count AIG's sale) were that TARP would lose $24 billion overall, having disbursed over $418 billion through its lifetime. Reality is that loss was always expected, as housing assistance was not intended to be recovered. Current estimates are for a slight profit on everything intended for recovery.

The billions that will be lost went to individuals, not the banks, auto industry, or any other big company.

...make a deal to take them over rather than them becoming worthless, and have ownership, rather than simply give money away...

How about getting into an agreement to buy 92% of outstanding stock, then selling it off later for a $22.5 billion profit?

Oh right, people complain about that, too.

The right thing is to stop monetising debt, slash gov't spending by minimum 50%, which is what the US gov't borrows every year to "pay" for its expenses ("pay" in quotes, because the gov't always borrows, it moves its debts from credit card to credit card, it can't pay, it won't pay, it's a deadbeat debtor who is not good for its debts).

You want to get rid of the deficit and start paying down the debt?

End the recession. Then roll back then Bush tax cuts. End the wars in Iraq and Afghanistan.

Boom. No more deficits.

http://www.treasury.gov/resource-center/data-chart-center/US-Economy/PublishingImages/20120229_EssentialEcon9.jpg

There is no need to cut government services - a great many of which are invaluable for keeping the economy going - when we have a long-term debt problem that will take care of itself if we act wisely.

Do you know what the interest rates on US bonds are right now?

http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield

-1%. That's right. People are literally paying the US government to hold their money.

There is no short-term debt problem.

The right thing is to stop monetising debt, slash gov't spending by minimum 50%, which is what the US gov't borrows every year to "pay" for its expenses ("pay" in quotes, because the gov't always borrows, it moves its debts from credit card to credit card, it can't pay, it won't pay, it's a deadbeat debtor who is not good for its debts).

You want to get rid of the deficit and start paying down the debt?

End the recession. Then roll back then Bush tax cuts. End the wars in Iraq and Afghanistan.

Boom. No more deficits.

http://www.treasury.gov/resource-center/data-chart-center/US-Economy/PublishingImages/20120229_EssentialEcon9.jpg

There is no need to cut government services - a great many of which are invaluable for keeping the economy going - when we have a long-term debt problem that will take care of itself if we act wisely.

Do you know what the interest rates on US bonds are right now?

http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield

-1%. That's right. People are literally paying the US government to hold their money.

There is no short-term debt problem.

Going pretty much worst case, we assume it's all income counted in one year - rather than being classed as capital gains or spread over more than a year and that he resides somewhere with a state income tax so that 50% goes in taxes. So 2.5 million is left.

It's just about the worst possible time for trying to live off of fixed income (the fed is trying to keep interest rates at 0%) but even so...

Now I don't think interest rates are going to stay at their low levels for the next 30 years I wouldn't actually do this if I had $2.5 million, but if things stay as they are now forever more:

30 year treasuries pay 2.9% http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield. They pay every 6 months and it's taxable income federally but not taxable at the state and local level. So you buy $2500000 worth of 30 year bonds and you will be getting paid $72,500 per year in interest. Sure that's taxable, but an income of $72,500 puts you in the top 12% of income earners in the US. And of course that's just your interest you have $2.5 million in those treasuries so you don't need to be saving for retirement making that income a little higher relative to those who do.

So just how rich are you that you consider people earning over $70,000 per year (individual not family) to be poor enough that they have to live a "very prudent" life?

> Why would China want to teach the USA a lesson? The Chinese already own most US debt.

No, they do not. China and Hong Kong combined don't crack 10%.

> The only reason the US could be justifiably paranoid about what China can/can't do to them, is if the US intends to default on China, stop paying interest, and pre-emptively attack China to get out of the situation.

Treasuries do not work that way. China can take advantage of the Federal Reserve's Quantitative Easing program in which a branch of the government effectively buys back said treasuries, but in treasuries are nothing more than pieces of paper that can be redeemed at a future date for a certain value, and these are bought and sold on a market just like any other commodity.

If the currency is headed for collapse, then why are the treasury rates so low?

http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/Historic-LongTerm-Rate-Data-Visualization.aspx

As for the "accounting fiction" the trust fund is invested solely in Treasury Bonds, those are the AAA rated investments backed by the full faith and credit of the U.S. Goverment. You can be an anarchist if you want, but the U.S. Government has never failed to pay back a dollar of treasury bond debt. They get shitty interest rates though (currently 10 year notes are returning a negative interest rate -- you get less back in 10 years than you invest up front, but they still sell easily).

Hmm, where do you get the negative interest rate for 10 year T-bonds? http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield has them at 1.6% today. Or are you factoring in inflation?

Dang Slashdot without an edit button. I meant to include this link:
http://www.treasury.gov/resource-center/data-chart-center/US-Economy/PublishingImages/20120229_EssentialEcon9.jpg

It shows the sources of the current budget deficits. Keep in mind Paul Ryan, famed serious "fiscal conservative," voted for every single thing in green.

Haven't they been threatening to build their own internet and cut it off from the world anyway? Then they wouldn't be able to connect, so it's just giving them a taste of that ahead of time.

See [treasury.gov] for sanctions on Iran. I believe that Swift (the international wire system) recently removed all Iranian banks from their service making international wires into Iran all but impossible. linky [huffingtonpost]

So while it may not be illegal to take money from Iran the US government doesn't look kindly on sending money to Iran.

Oh, wait a minute. He left office almost 4 years ago....

It's funny you should mention that.

Four years ago, when the President was pushing more Executive power, many were against it. Those people who were against it, were called "UnAmerican" or were accused of wanting to "help the terrorists" or "didn't realize the threats" against our country. Others pointed out the any extra powers that the executive branch will eventually be in the hands of the "other guys" - in this case the Democrats.

No one listened.

People were afraid and there was revenge in the air. John Q. Public was/is more than happy to give the Government more powers because they'll only use it for "good" and NEVER use it against anyone who isn't doing anything "wrong".

As we have seen, power is NEVER given up. The Obama Administration can at anytime give up those extra powers that the previous administration acquired.

They haven't. Nor will they.

And neither will the next Presidential Administration regardless of who gets into office - even if it's Ron Paul.

We as citizens have failed. We are at fault. We let emotion and the desire for revenge cloud our thoughts and we gave away our Freedoms. Sure, we were thrown some bones - like being able to own an assault rifle with big honking magazines increases my freedom - Plah-ease. The government keeps a real close eye on gun purchases. As well as large financial transactions - see OFAC - buy a car - even YOU citizen and it's reported to the government (I know it SAYS foreign but it is also used for domestic purchases on EVERYONE. And then there's the government getting information from: ISPs, Cell Phone providers, Medical Information Bureau, VISA, Mastercard, Credit Bureaus, ChoicePoint, Google, etc ... all with just a scary letter. Who needs a Government Database of files on everyone when corporate America does it anyway (scattered bits and pieces but anyone of us here could create our own Stasi SQL script to put it all together) for the sake of Marketing Data?

They're keeping us SAFE after all and if you do nothing wrong, you have nothing to worry about!

Right???

from Krugman's blog, 5- 7- and 10-year bonds have negative yields. Investors are paying the government to buy these things instead of going into stocks.

Thankfully we are not quite there.

You'd think that, but you'd be wrong: http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield

...we need to borrow and repay at insignificant interest rates...

FTFY. Long term bond interest rates are near record lows. It would be foolish not to borrow. If we borrow now and invest wisely so that the economy grows by at least 2%, we break even.

Or we can keep cutting. That worked really well for Spain & Ireland.

http://www.treasury.gov/resource-center/sanctions/Programs/Pages/iran.aspx

There you go, the laws themselves, and interpretive guidance papers from the US Treasury Department. US law does indeed prohibit export to Iran (what the girl was planning to do) and knowingly selling embargoed equipment to persons who intent to export it (what the clerk refused to do).

I'm not American, and I think that law is kind of stupid as it is, but it is the law in the USA.

I can do one better than giving you examples of other large retailers following that law - you can experience it for yourself. Go to dell.com and pick out a computer. Click through until you get to the box that asks you to accept the terms of sale. Now go read them. You'll notice this line:

The Products and Services may not be exported, re-exported, sold, leased or otherwise transferred to restricted end-users (including those on the U.S. Department of Commerce, Bureau of Industry and Security "Entity List," the U. S. Department of the Treasury, Office of Foreign Assets Control "Specially Designated Nationals List," and other U.S. government lists of denied parties) or to countries subject to a U.S. export embargo (currently Cuba, Iran, North Korea, Sudan, and Syria). In addition, the Products and Services may not be exported, re-exported, sold, leased or otherwise transferred to, or utilized by, an end-user engaged in any activities related to weapons of mass destruction, including any activities related to the design, development, production or use of (a) nuclear weapons, materials, or facilities, (b) missiles or the support of missile projects, or (c) chemical or biological weapons. You agree to apply the requirements of Section 13.A to any agreement you enter with any party for the resale or distribution of the Products or Services provided under this Agreement.

Now, since you DO intend to export the computer to Iran, click "I DO NOT AGREE to Dell's Terms and Conditions of Sale." and see if you can buy the computer.

> to purchase the product and violate US law (and apple policy)

According to Forbes, items that can be purchased at retail do not require an export license.

While the guy at Forbes does seem to say that, he links to the US Treasury's site which states:

EXPORTS TO IRAN - In general, unless licensed by OFAC, goods, technology, or services may not be exported, reexported, sold or supplied, directly or indirectly, from the United States or by a U.S. person, wherever located, to Iran or the Government of Iran...
In general, a person may not export from the U.S. any goods, technology or services, if that person knows or has reason to know such items are intended specifically for supply, transshipment or reexportation to Iran.

There doesn't seem to be "any goods, technology or services except those that can be purchased at retail" language there.

No they wouldn't be liable, and the proof of that is that consumer services told her she could indeed buy and apologized to her in the end.

The US Department of Treasury seems to disagree, specifically in this document about exporting to Iran:

In general, a person may not export from the U.S. any goods, technology or services, if that person knows or has reason to know such items are intended specifically for supply, transshipment or reexportation to Iran.

You may or may not like the law but don't hate the Apple or their employees for covering their asses on this.

The government prohibition is against sale into or transfer into those countries. It does not apply to US Citizens of descent from those countries.

It does if it's known that the US citizen is planning on importing it into Iran. As the overview of the US sanctions against Iran says:

EXPORTS TO IRAN - In general, unless licensed by OFAC, goods, technology, or services may not be exported, reexported, sold or supplied, directly or indirectly, from the United States or by a U.S. person, wherever located, to Iran or the Government of Iran. The ban on providing services includes any brokering function from the United States or by U.S. persons, wherever located. For example, a U.S. person, wherever located, or any person acting within the United States, may not broker offshore transactions that benefit Iran or the Government of Iran, including sales of foreign goods or arranging for third-country financing or guarantees.

In general, a person may not export from the U.S. any goods, technology or services, if that person knows or has reason to know such items are intended specifically for supply, transshipment or reexportation to Iran.

Apple -> US buyer -> Iranian would mean that Apple is indirectly exporting from the US to Iran.

Certain organizations and individuals are subject to trade sanctions, embargoes and other restrictions under U.S. law. These restrictions apply to both domestic and foreign transactions.

Was this girl a representative of "certain organizations and individuals"? ie, was she listed in the OFAC Specially Designated Nationals and Blocked Persons List, or representing an organization on the EAR Entity Chart?

The real reason it is a sad day is this discussion. I am appalled that slashdot can harbor this much racism and ignorance simply because Apple is involved. No one has yet provided any proof of this being legally required by anything, just empty claims that that is the case. Yet there has been a lot of censoring of people who say this is wrong and upmodding of ones making false claims in defense of Apple, and it doesn't take long to figure out who has been doing that.

Read it here: http://www.treasury.gov/resource-center/sanctions/programs/pages/iran.aspx

You are completely of your rocker with your crazy accusations. I haven't found anything in this whole discussion that was in any way racist (except one post that I didn't quite understand that seemed to be about Iranians and homosexuality). What this discussion was about was whether a sale of an iPad was refused out of racist motives, or in order to act according to existing laws, and in the second case whether the refusal was correct or in error.

There was with the exception mentioned earlier no post that claimed it was in any way correct to refuse anyone a sale because of their nationality or origin. The opposite is of course true as well; if there is a good reason to refuse a sale then a sale should be refused, again without regard of the nationality or origin of the buyer.

No, I think you're misunderstanding my point.

I call a 60% increase in computing power marginal because of the amount of time it is likely to hold the crown. I apologize for not being clearer about that.

Regarding the China funding, here you go, and also here. Also, this is a year in which about 1/3 of the Federal government's funding came from deficit spending (i.e., bond sales).

I was not claiming the China and only China paid fro Sequoia. I was pointing out that it a valid symbol of neither or technical prowess nor our economic prosperity.

The idea that the UK is some kind of surveillance state is a myth propagated on Slashdot by people who don't know better. If I recall correctly the "highest density of CCTV" meme comes from an article in the Daily Mail (aka Daily Fail). They counted all CCTV cameras, including all private cameras, in one very small and specific part of London. Despite the fact that these cameras are subject to the data protection act and typically not even connected to a communications network, they then extrapolated that small area of London to the entirety of the UK and asserted everyone was "being watched all the time", which is about as accurate as saying your email is always being read (by automatic spam filters).

Internet censorship proposals keep getting floated every few years by "save the children" types in the UK, whereas the idea is taboo in the USA. That's good for America. Unfortunately, that doesn't mean there's no censorship in the states. US residents and citizens are subject to a comprehensive and effective system of financial censorship instead. For example, when politicians there decided that internet poker was bad, they decided to censor online poker sites. Rather than do it via DNS or IP blocking they commanded banks and payment processors to block financial transaction to those sites instead. The effect was the same - Americans cannot use these sites.

The financial censorship system operates the same as you would expect from an online censorship system. There is a large blocklist of questionable accuracy - it includes companies and people who do not exist and performs matching by name only. There is no right to appeal and no evidence is required to be added to the list. It is subject to political manipulation as we saw with the WikiLeaks blockade. It requires pervasive monitoring, implemented via government access to banks financial records. Foreign financial transfers are also available to the US government via the "Terrorist Finance Tracking Program", which basically dumps every wire transfer, credit card transaction etc into a giant database that is queried hundreds of times per day - essentially the equivalent of deep packet inspection.

Of course, like any form of censorship, ways around the system are also censored. Whilst attempting to evade online censorship is typically not treated as a serious crime even in places like China, attempting to evade US financial blocklists is considered to be money laundering and can result in imprisonment for up to 20 years. In fact, being used by third parties as a way to evade this type of censorship is also money laundering even if you're simply an unaware middleman! The original formulation of these laws had a "mens rea" requirement, ie, to be guilty you had to actually intend to break the law and have a guilty mind. Virtually all money laundering cases fell because of this, so Congress simply removed the requirement.

Finally, because censorship systems have to be global to be truly effective, the USA has been persistently "harmonizing" this system onto the rest of the world since its inception. It gets tiresome to read posts from Americans trashing the UK for being some kind of censorship crazy surveillance state when the depressing reality is the reverse.

Your comment is pretty stupid. You don't seem to know the difference between a professional peer reviewed journal and a student project. Not only that but the data used is mainly from '09 and before. Did you actually read the actual or just do a Google search?. Their entire argument rests on the basis that the Euro can be viewed as a pivot to the US dollar. Maybe you should google "Euro Crisis" and "Greece bailout".

Here's a FACT, inflation is more than 4% and the T-bill is at .18%

http://www.forecast-chart.com/forecast-inflation-rate.html

http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield

So the Chinese are PAYING the US to hold money.

No offense but rather than listening to 19 year old college students try looking at peer reviewed/government sources. Also read the source you site since you clearly didn't read that PDF.

Slashdot, where people's knowledge of technology is only surpassed by their knowledge and understanding of of economics.

But here you go: major foreign holders of treasury securities. Holdings at the end of Dec 2011:

China: 1100.7B USD
Japan: 1042.4B USD

And oh, here's the data on the Japanese GDP since 1960.

FYI, it's grown from 4.6674T USD in 2000 to to 5.4588T USD in 2011. Sure, it fell for a while from the high of 5.2644T USD in 1995, but to state that their economy is not performing well only shows your stupidity.

As I said in response above:

As for the pennies (again, emphasis mine):

The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy. Source

As for the "imposing new fees on existing customers" thing, that's easy (emphasis mine):

You agree to pay all access, usage and other charges that you or the user of your wireless device incurred. For Postpay Service, our charges also include Federal Universal Service, Regulatory and Administrative Charges, and we may also include other charges related to our governmental costs. We set these charges; they aren't taxes, they aren't required by law, they are not necessarily related to anything the government does, they are kept by us in whole or in part, and the amounts and what they pay for may change. Source

As for the pennies (again, emphasis mine):

The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

Source

No private entity has to accept any currency they do not wish to, and that is solely at the discretion of said business, unless the law states otherwise. I believe some states have laws dealing with this on the books, but Federally speaking, you can accept or not accept whatever you want.

Learn some fucking facts. Seriously.

The US debt is a little over 15T(Trillion). China holds 1.134T. That's 7.5%

China holds a meager 7.5% SEVEN POINT FIVE PERCENT of the US debt. That's it.

Current annual percentage rate on 10 year Treasury Notes: ~2%

Annual return on 1.134T at 2%: ~22B

Annual operating costs of a conventionally powered aircraft carrier: ~200 M

China's cash left over after running their aircraft carrier: 22B - 200M = 21.8B

Are these the fucking facts I'm supposed to seriously learn?

Learn some fucking facts. Seriously.

The US debt is a little over 15T(Trillion). China holds 1.134T. That's 7.5%

China holds a meager 7.5% SEVEN POINT FIVE PERCENT of the US debt. That's it. Japan, the next highest creditor, holds 6.4%.

The grand total of all foreign debt is 4.6T. That's 30% of all the US debt.

Foreign countries -- all of them -- hold THIRTY PERCENT of the US Debt. The rest is owed to the US, either to the Federal Reserve or the US public.

Here are the stats on foreign ownership of the US debt.

I don't have time to watch a 53-minute YouTube video, but in case you haven't been paying attention, inflation is not a problem in this country right now. Interest rates are at record lows. In fact, rates on some T-bills are negative. This means that people are paying the federal government for the privilege of lending it money.

We could do with a lot more inflation in the near term. It would accelerate economic growth, and it would cause the debt held by many middle-class people to shrink in real terms. This would be good for people with underwater mortgages, massive student loans, or big credit card or medical bills.

Strict anti-inflationism (and the idea that the system is secretly rigged to create inflation) is a viewpoint that tends to be held by gold bugs and other "hard money" obsessives. But inflation is mostly something that hurts people with lots of money. It doesn't hurt ordinary people as much, as long as their incomes keep pace with inflation in the cost of living, and as long as we don't have hyperinflation. And again, inflation actually helps people with debts.

From a macroeconomic perspective, the best thing that both the Fed and the European Central Bank could do right now to jump-start the American and European economies would be to significantly increase inflation.

Because you don't seem to have been watching the news, the vast majority of that money has been returned.
With the added bonus of the economy not completely collapsing. In fact, the taxpayers have 'made' money.

http://www.treasury.gov/press-center/press-releases/Pages/tg1232.aspx

Of course, I think their should have been more strings attached ot that money. Like mandatory refinancing at a lower interest rate regardless of credit or current mortgage status. Yes, even people in foreclosure should have gotten a reset button.
That would have pulled a lot of money into the economy if people with 6.5% loans had been automatically refinanced at 5%.

But, since it was implemented by the same people who made bankruptcy unusable for the people that need it most. I'm not surprised the average worker was left out of any immediate gains.

.

To quote my $20 - "This note is legal tender for all debts, public and private"

In a technical sense, accepting goods places a burden of debt upon the recipient.

http://www.treasury.gov/resource-center/faqs/Currency/Pages/legal-tender.aspx

I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

Relatively recently China allowed the Yuan to float and it has gotten stronger since. 6.38 CNY to 1 USD from 6.82 when it was first allowed to float.. Last year they had a trade surplus with the U.S. of nearly $300 billion. We know this because we know what our deficit was.We know China owns 1.1 trillion in U.S. treasury bonds.

I admit that I may have information bias so I'm interested in the reverse idea.

Remind me again about what little social mobility is left?

http://www.treasury.gov/resource-center/tax-policy/Documents/incomemobilitystudy03-08revise.pdf

There was considerable income mobility of individuals in the U.S. economy during
the 1996 through 2005 period as over half of taxpayers moved to a different income
quintile over this period.
â Roughly half of taxpayers who began in the bottom income quintile in 1996 moved
up to a higher income group by 2005.
â Among those with the very highest incomes in 1996 â" the top 1/100 of 1 percent â"
only 25 percent remained in this group in 2005. Moreover, the median real income of
these taxpayers declined over this period.
â The degree of mobility among income groups is unchanged from the prior decade
(1987 through 1996).

There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise.

It makes no difference whether it is a "debt" or a "sale"; there is no Federal requirement that cash be accepted unless a State law says one way or another. In this case, State law is saying not to accept it. As someone living in Louisiana who rarely uses cash for anything more than a soft drink, I still think this law is yet another massive waste of legislation and I can't wait to see it stricken down.

You folks that spew the China owns half the US don't ever do research do you?

As of January 2011, foreigners owned $4.45 trillion of U.S. debt, or approximately 47% of the debt held by the public of $9.49 trillion and 32% of the total debt of $14.1 trillion. The largest holders were the central banks of China, Japan, the United Kingdom and Brazil.

As of May 2011 the largest single holder of U.S. government debt was China, with 36 percent of all foreign-held U.S. Treasury securities (16% of total US public debt).

http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfhhis01.csv

http://www.treasury.gov/connect/blog/Pages/Just-the-Facts-SPs-2-Trillion-Mistake.aspx

But the Debt Limit Law isn't in the Constitution

Congress has exclusive power to incur debts. Treasury acknowledged this two days ago. At most the US is obligated to service interest on existing debt, such that the 'validity of the public debt ... shall not be questioned.' At no point does the constitution require the Congress to incur new debt (i.e. raise the debt limit) for any reason, and Obama has no power to do so.

Some things that are actually not in the constitution: Social Security. Medicaid. Medicare. Food stamps. WIC. Section 8 housing. Individual Mandate. Agriculture subsidies. Unemployment compensation. Fanny Mae. Freddy Mac. Farmer Mac.

A fee for a service, even if charged after the service is rendered, is not the same as a debt.

Private businesses aren't required to accept US Dollars in exchange for goods or services. Even the Treasury says so:
http://www.treasury.gov/resource-center/faqs/Currency/Pages/legal-tender.aspx

They are audited every year. Ron Paul want's a special audit he knows won't happen so he can rile up his conspiracy wing nut supporters.

http://www.treasury.gov/about/organizational-structure/ig/Documents/oig11004.pdf

The difference is that the full faith and credit of the US government probably carries a bit more weight than the full faith and credit of an anonymous internet startup

http://www.treasury.gov/connect/blog/Documents/20110516Letter%20to%20Congress.pdf

Hope This Helps.

If China did this, then the value of the renmibi would immediately rise relative to the dollar; the only reason they're buying bonds is to hold the exchange rate down. This would have the effect of reducing Chinese exports to the US while making US industry more competitive.

The result may well be a net win for the US. It's a bit hard to predict a priori.

Also, just to put this in perspective, China bought about $250 billion of US bonds between Feb 2010 and Feb 2011. That's about 1/3 of total bond purchases by foreign governments over that time span (see http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt ). It's also about 10% of the total bond sales over the time period as far as I can tell (I haven't found a good authoritative source for this; just graphs). That 10% drop in bond purchases would be annoying, but not fatal.

According to the treasury, China is in fact in the lead, followed by Japan, then U.K. Those 3 together hold 52% of treasury securities (or maybe the total there is total foreign held, I'm not sure).

You know, these guys are so greedy and so shortsighted, a dangerous combination. I swear they'd sell a mugger the gun to rob them with.

No, bad choice of words. The muggers you speak of are, in fact your banker and your retailer selling you goods "on the tab". You may want to think twice before pissing them off.

US of A could not be helped to stop using the rope to hang themselves, even before they started selling the rope to China. With a trade deficit of more than a quarter of a trillion in2010 alone and a public debt to China close to 1 trillion, I don't know how to put it in other words.

Perhaps we might start demanding that every Chinese company wanting access to American markets must locate offices here, staff them with US workers, and share their technology in turn.

Yeap. Le'me guess China's answer: are US workers willing to get only USD200 a month? No? Well, will gladly pay them USD3000. (hmm... not that will help them too much after we'll be dumping on the financial marker all the US treasury bonds we own.... actually, might come even cheaper than the chinese workforce).

We did that with the Japanese...

Well, well... did the Japanase also had almost 1 trillion dollars worth of US public debt and had a trade balance in their favor of a quarter of a trillion/year?

What's another 2 trillion[1]?

The USA has already created many trillions since 2008, without hyperinflation of a "few thousand percent in one month". Seems like as long as they don't call it "printing money" nobody appears to notice or care that much.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=armOzfkwtCA4
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a7484bxHz7Bk

While it's still "printing money" if you lend money that doesn't exist, or borrow from a "financial smoke and mirrors scheme" to pay off a real debt, it seems as long as the smoke and mirrors are good enough, nobody asks too many questions about it. I doubt China would either - they'd take the trillions very quietly and try to convert it to stuff that's more tangible, before everyone else notices...

[1] Approximately:
http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt
http://www.washingtontimes.com/news/2010/mar/02/chinas-debt-to-us-treasury-more-than-indicated/
http://blogs.telegraph.co.uk/news/timcollard/100011049/america-owes-china-two-trillion-dollars-but-what-does-that-mean/

If the US would take such drastic measures, China would probably answer by selling their $2.5 trillions in foreign exchange reserves, most of them US Dollars. That would devalue the USD and EUR to virtually zero, bringing about economic turmoil of unprecedented magnitude.

I don't know why people keep saying this. China holds about $900 billion in U.S. Treasury securities (so they're not even "most" of the $2.5 trillion foreign exchange reserves China holds). That's out of $4.3 trillion U.S. Treasury securities held by foreigners, and $9.1 trillion overall. While China holds the largest share (barely beating out Japan), it's small potatoes compared to the total. And the whole reason China has been buying them is to prop up the US Dollar, to help maintain the favorable (for them) Yuan/USD exchange ratio. The U.S. has actually been trying to devalue the USD relative to the Yuan to try to correct the trade imbalance with China (why do you think our interest rates have been so low for so long?). So devaluing the USD actually works against China and for the U.S.

Furthermore, U.S.-China trade from Oct '09 to '10 was $253 billion in imports and $88 billion in exports, or about $340 billion overall. China's GDP is a bit over $5 trillion, while U.S. GDP is around $14 trillion. A trade war between China and the U.S. hurts China more than it does the U.S. In fact, due to the trade imbalance, the U.S. is in the role of customer. In a trade war, it's easy for the U.S. to change its shopping venue to another low-cost manufacturing nation like Malaysia or Thailand. It's hard for China to find another customer to buy the products it's currently selling to the U.S. So again, it's the U.S. which is in the driver's seat, not China.

What I found interesting was that they don't take cash anymore - just credit/debit cards - I guess that "...all debts, public and private..." printed on the money doesn't mean anything if you're an airline.

It means exactly the same thing it does on an airline as everywhere else... it just doesn't mean what you think it means. To quote from the FAQ on the Treasury Department's website:

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

The economic problem is not the central problem of mankind. Knowledge, innovation, technology is. In times like these when biz is sitting on trillions of cash, govt needs to step up to prevent suffering and encourage the continuing advance of innovation. Our creativity is what keeps our currency strong, by producing things others want.

When have predictions about the deficit causing doom and gloom ever come true in the US? Lincoln printed over $400 million greenbacks, and it worked. Under FDR the govt took over some 40% of GDP, and it worked. Reagan tripled the debt, and it worked.

Why should money creation automatically be tied to debt? Because bankers profit that way? Why can't our elected representatives create debt-free money to fund a robust safety net (or basic income) and encourage innovation through challenges (nothing prevents private companies like Google and Netflix from holding challenges too of course)?

If you look at the figures for US foreign-owned debt, you will see that we could pay off China with the recently-passed tax cut for the richest 2%. Note that the second largest holder of US foreign debt is Japan, with its 200% debt-to-gdp ratio. Also note that foreign debt totals some $4.2 trillion; most of the rest is government owing money to itself - which can be forgiven or written down. So the debt crisis is not nearly as scary as politicians focused on elections want you to believe!

Fears about the debt are a pure political ploy, an appeal to emotion and bad analogies with personal finances, designed to scare the voters with predictions about their grandchildren that have been made ever since this country was founded and Alexander Hamilton assumed the states' war debts. But govt can do things that individuals can't, like print money, and declare war. And this visualization of the last 200 years shows that none of the predictions about grandchildren being worse off have come true.

Recognize the fears about the debt for what it is: simply a means to get attention. Everyone knows the debt doesn't matter, especially Republican presidents, who are strongly correlated with increases in the debt.