USA Debt

[manuelsonn]

the bills would get 3 additional zeros every couple days

everyone was a multi millionaire

the people arranged themselves in a very simple and overlooked way, one which often isnt brought up when internet smartasses talk on this.

ppl simply used a foreign currency.its that simple.

hell, montenegro does even have an official currency,as we speak right now, they simply use the euro, without the european central banks ok or consent.

this is the problem with some americans, they arent able to think outside their borders.theres other currencys.

hell, usa had tobacco as official currency not to long ago.

btw, the yugoslav currency, as soon they opened the market for personal loans, was a gamble and scheme to rip off other currencys, and everyone knew full well.

but things are bit different, the jugos wouldnt mind living a farmers life and eating shit food, they didnt know any better.

not so sure if that would apply to the usa.

itd have some positive sides for wiggs, the guy is fat, he lose some weight.

but overall, the pl who had nothing before, were left with nothing afterwards,no big change.

and the middle class,haha, the soooo pround middle class-the only difference to the have nothings is they can live for 1,2 months without income-,well they got slightly degraded to poor with nothing.

i find it mindboggling that the ppl who are against a welfare state somehow think that the vast majority can be middle class safely and forever, in the very same system they critizise.

either way, thinking too much about money and basing their life on just that is retarded and will make one enjoy life less and always be worried.

to each their own.

u sick fuck old guido junkie.. you re a fucking mess

[El Diablo Blanco]

http://money.cnn.com/2013/05/14/news/economy/deficits-falling/index.html?hpt=hp_t2





"Budget shortfalls are projected to increase later in the coming decade ... because of the pressures of an aging population, rising health care costs and growing interest payments on the federal debt," the CBO said in its report.

Such bullshit.  The whole debt thing is the biggest lie in history.  How can you be in debt to yourself when you make the actual money you claim to be in debt with?

It's like the ocean complaining that it's thirsty

[arce1988]

  I love Serbia.

[manuelsonn]

mmurica will just print some more money and blow everthyng up -

[Emmortal]

"In its updated budget outlook released Tuesday, the CBO now estimates the annual deficit for this fiscal year will be $642 billion or 4% of GDP. That's $203 billion less than the agency estimated a few months ago. The CBO attributes the improved estimate to higher-than-expected tax revenues and an increase in payments to the Treasury by mortgage giants Fannie Mae and Freddie Mac.

By 2015, the deficit will fall to its lowest point of the next decade - 2.1% of GDP. And it will remain below 3% until 2019, at which point it will start to increase again. Deficits below 3% are considered sustainable because it means budget shortfalls are not growing faster than the economy.

Similarly, the CBO now estimates the country's total debt - the sum of annual deficits accrued over decades - will fall to roughly 71% of GDP in 2018 and 2019. That's four percentage points below where it is today."

What's this about Obama's debt-laden policies destroying the United States?  The fear over Obama's deficits was always silly insofar as it implied these deficits were causally responsible for economic problems here and now: there is zero substantive research indicating that debt-to-GDP ratios in the range the USG currently maintains are harmful to the economy and countercyclical fiscal/monetary policy (government spending/tweaking interest rates/purchasing assets) is a widely accepted precept of macroeconomics with plenty of empirical support.

Yes, long-term structural problems remain unaddressed, yes the situation in the job market is very disconcerting and Obamacare may exacerbate it, and yes, no one is precisely sure what will happen when the Fed takes its foot off of the quantitative petal. But these issues are independent of my point about the short-term deficits of the Obama Administration.

You've been reading too much Krugman.  The only reason we haven't seen any major problems with debt at this point is solely because of the bond markets have kept rates very low.  When bonds start falling rates will rise and either taxes will have to go up to compensate or the government will have to cut spending somewhere.  Right now, just a 1% rise for the US in rates would add another $100 billion in interest payments. 

Guys like Bill Gross, who manages the worlds largest bond fund, have stated the super-bull bond cycle is over and to take note.  If we go into a bear market with bonds, it could mean implosion for Italy, Spain, Japan, etc and will put a definite strain on the US.

[arce1988]

If we go into a bear market with bonds, it could mean implosion for Italy, Spain, Japan, etc and will put a definite strain on the US.

^

please tell us more

[Emmortal]

If we go into a bear market with bonds, it could mean implosion for Italy, Spain, Japan, etc and will put a definite strain on the US.

^

please tell us more

Italy's debt to gdp = 127%  http://www.tradingeconomics.com/italy/government-debt-to-gdp

When interest rates hit 7% they almost buckled, they can't take another increase, even 2% could cause them to default.  Germany isn't going to go another round in that rodeo and the ECB would have to cover major losses causing a chain reaction with the other countries who are teetering.

The US is still a way out from having that happen, but the so called "lets not worry about short term debt accumulation" ideologue avoids the reality that interest rates will go up, the only question is what measure will be taken to counter it and how harsh they will be.

Low interest rates have also allowed corporations to massive sums of capital that have very little impact (currently) on repayment.

[syntaxmachine]

You've been reading too much Krugman.  The only reason we haven't seen any major problems with debt at this point is solely because of the bond markets have kept rates very low.  When bonds start falling rates will rise and either taxes will have to go up to compensate or the government will have to cut spending somewhere.  Right now, just a 1% rise for the US in rates would add another $100 billion in interest payments. 

Guys like Bill Gross, who manages the worlds largest bond fund, have stated the super-bull bond cycle is over and to take note.  If we go into a bear market with bonds, it could mean implosion for Italy, Spain, Japan, etc and will put a definite strain on the US.

1. Krugman recently cited that k_nt Naomi Kline favorably. He is dead to me.

2. No one is saying the debt isn't a problem at all -- all I'm interested in saying is that the current path is preferable to any further austerity in the short term, given the demonstrable effects of significant austerity in Europe and the IMF calling our deficit reduction efforts "overly strong" as is. Deficits matter, but not as much as jobs. Yes, spending will need to be cut somewhere.

3. Also, I think the CBO projection does include rising interest rates as an assumption, since it projects interest payments increasing significantly. But I'm not really sure that that is the case.

4. There still isn't any substantive research indicating our current or soon-to-be debt-to-GDP ratio is actively harmful to the economy; most people seem to simply intuit this conclusion. Maybe they're right, but I'd think the lack of evidence for the conclusion would give some pro-austerity persons pause. It doesn't, of course.

[arce1988]

 Thanks

[arce1988]

http://money.cnn.com/interactive/news/economy/whats-up-with-the-debt-ceiling/?hpt=hp_t1

[Wiggs]

http://money.cnn.com/interactive/news/economy/whats-up-with-the-debt-ceiling/?hpt=hp_t1

tick-tock

[oldtimer1]

China has no ball to take over Taiwan, against mighty U.S. military power no any chances at all.

There is no way we commit to a war with China over Taiwan. It would break our economy and the losses to win that war would be outrageous. The US is not ready for that kind of death toll.

Right now what's going to happen is the value of the dollar is going to go down. China can't run their economy without the US buying their crap. They will feel push to a wall to "loan" us money. The US credit rating will take a major hit. After a couple of years of the Federal government subsidizing health care exchanges policies the government will be done. They will blame Republicans and Hillary Clinton will get 8 years as this government goes to complete hell as more and more people rely on government for checks as the government goes into a complete default on it's payments. The government will move toward a more socialist model to survive. Russians will drink vodka and have a good laugh.

[oldtimer1]

The end.

[oldtimer1]

Here's a graph.

[arce1988]

 Pelosi has jets take her every where     total waste of money

[james87]

It's more about the principle. Not paying China would cause an uproar across the world and set a precedent that would send foreign markets into chaos.

Out of the 16.7 trillion dollar debt the US has, China owns roughly about 1.2 trillion of it. That is pretty substantial.

Remember though, being in debt has been part of American history. The only time America was free of debt was back under the presidency of Andrew Jackson. He wiped out our debt, but, sadly two years later, we had a 6 year long economic depression (it was the second longest depression suffered by this country, second to that of the great depression).

"1"

This...kind of. More then just the principle. There isn't really too much China could do, i.e. force. But they wouldn’t need to, U.S.A would fuck itself by doing that. It would de-value the U.S dollar beyond anything they are doing now which is just raising the debt ceiling.
 I think it would have a similar effect as just printing more money without actually going into debt. The U.S dollar would be worthless. Look at Germany post war, Japan a few decade ago. This kind of thing has been done plenty of times before, nothing new. When Germany were just printing money after the war it was literally declining in value by the minute, people had to be paid three times per day because by the end of the day it would be worth significantly less then what it was in the morning. At its worst 1 US Dollar bought like 4 billion mark (or what ever the currency was then). Insane.
I think something like this would happen...I cant imagine they would just tell China to go jump though lol. 

[Slapper]

This place is like a madhouse.  

Prior to 2007 threads like these would get 50 visits, at most. Nowadays it's 50 pages.

[james87]

Probably should have read all posts before replying..haha my bad.

[Gonuclear]

They've been in the works to make their currency the world reserve currency, in addition, if they just announced they wanted their debts paid and were no longer investing in the U.S., the market would crash causing a world wide domino effect. they don't have to lift a finger to fuck us.

China is making no effort to establish their currency as a reserve currency.   And, as long as its value is controlled by the government (keeping it artificially low), it will never be adopted as a reserve currency.  No country would agree to having assets whose value is controlled by the issuer.

China owns just 13% of our debt, BTW.

[arce1988]

  China's slowdown pushed it to devalue the yuan?

[Gonuclear]

  China's slowdown pushed it to devalue the yuan?

That's right.  They frequently devalue the yuan to stimulate exports.   Labor conditions are such that they can push down wages and still have more than enough candidates for a given job.

[arce1988]

  Damn

[Mitch]

China is making no effort to establish their currency as a reserve currency.   And, as long as its value is controlled by the government (keeping it artificially low), it will never be adopted as a reserve currency.  No country would agree to having assets whose value is controlled by the issuer.

China owns just 13% of our debt, BTW.

Sauce? I thought it was not even 10%.

[Gonuclear]

Sauce? I thought it was not even 10%.

Treasury says that - about $1.2-1.4T.  But it is widely believed to be much more:

http://www.heritage.org/research/reports/2011/02/chinese-investment-in-the-us-$2-trillion-and-counting

[Mitch]

Thanks for the info.