US Debt

[blahdy 21]

we can start by ending all earmarks.

[crazyyaya 4]

I would like to clarify something on that graph of presidency and debt. You can see in the top left corner that the debt was 90% of the GDP. And befoire that the debt as aGDP hit 120% of GDP. This would be a riduculous amount today. But they did have a justified reason. WW2, the largest war in the history of mankind.

[patriots_1228 51]

maybe getting out of iraq would help keep the costs down.........

[vershner 11]

Not much chance of that, they need to keep the pressure on Iran.

The current threats towards Iran are only partly to do with nuclear weapons. A bigger threat to the US is that Iran has been planning to start selling its oil in Euros. If that happened the value of the dollar would collapse and the US would be plunged into recession.

Currently oil is always sold in Dollars, so almost every country keeps a reserve of Dollars, and regular oil trading keep the value up. If the Iranians started selling in Euros, many nations would dump their Dollars stocks and buy Euros, causing the Dollar to crash.

[blahdy 21]

Originally posted by: patriots_1228 maybe getting out of iraq would help keep the costs down.........

quote>

sorry, that mathematically won't solve the problem.

Originally posted by: vershner Not much chance of that, they need to keep the pressure on Iran.

The current threats towards Iran are only partly to do with nuclear weapons. A bigger threat to the US is that Iran has been planning to start selling its oil in Euros. If that happened the value of the dollar would collapse and the US would be plunged into recession.

Currently oil is always sold in Dollars, so almost every country keeps a reserve of Dollars, and regular oil trading keep the value up. If the Iranians started selling in Euros, many nations would dump their Dollars stocks and buy Euros, causing the Dollar to crash.quote>

very good point there   I still think we invaded Iraq after Saddam started selling oil w/o requiring dollars as automatically assumed as 'the international standard' by OPEC framework in the past.

[Micah 16]

Actually, we only get a very small precentage of oil from Iran. Anything they did with their oil truly wouldn't hurt us. We have reserves...

[vershner 11]

The problem wouldn't be the US running short of oil, the problem would be the serious devaluation of the Dollar as other countries start trading in Euros.

[coolotter88 2]

maybe we should ask the European Union if we could join....nicely

[vershner 11]

I can just imagine the French response to that!

[paperboy15 4]

Hey, the US Gov't Debt may rank #1 in size in the world, but as a percentage of GDP it ranks #32.

I hope this isn't what encourages the politicians to spend more...

http://en.wikipedia.org/wiki/List_of_countries_by_public_debt

[JanYpe 17]

I can just imagine the French response to that!quote>

Probably something like: Hooray, more people to pay for our farming subsidies!

[blahdy 21]

Originally posted by: vershner I can just imagine the French response to that!quote>

ugh no, lol... let's just default

[Explodingsims 3]

So, this whole situation reminds me of a Simpsons episode, where they see 30-40 years in to the future, and Lisa is Pres, and the country is bankrupt.

Anyways, I think that what Canada did should be an example, but I'd don't think the Goverment would do anything inspired by another country....

[ben_1986 0]

@Cogeo: when you are saying that countries as Belgium, Greece and Italy have debts that are over 100% of their GDP you're not correct.

If you look at Belgium, then you see that the debt% has dropt from around 140% to around 87% (2007). This was only made possible because budget deficits were decreased until their was an actual surplus and because of the GDP growth. And since then, no government would even think of making a negative budget. Off course Belgium is an extreme of public debt (283 billion euros for only 10 million belgians - www.debtagency.be). Also, every year about 30% of the annual budget has to be spend on debt-related expenses, giving very little space for an active financial policy.

I guess if that's the direction the US wants to go to, they have to realize that it's a gigantic burden for future generations (as i tried to explain with the belgium-story).

[LarksTonguesInAspic 28]

One responsible party I don't see blamed is the Federal Reserve, the true source of this problem. Congress allowed the system to be created, and we're being torn down brick by brick ever since. Bush 1&2 didn't create it, neither did Reagan, Clinton, or Carter. It's the reason the Founding Fathers wrote so many warnings concerning both central banking, and fractional reserve banking. They were aware of the danger 200+ years ago. The fall of our republic is inevitable; partially because of this debt. It was designed such so that it can NEVER be repaid, much like a credit card. The Federal Reserve is a for-profit, foreign owned corporation that is in effect operating as a receivorship for the bankrupt US government. Under the Constitution, gold and silver are the only lawful money. That is why it's "tender" on the bills; this word wasn't used as a verb until it appeared on paper money. It's also the reason Henry Ford said, "If the American people knew what was going on, there would be revolution before tomorrow morning." Americans should be demanding change, but are too distracted by Paris Hilton and the iPhone to care. This issue cuts across political and cultural lines, but so does the apathy about it. 

to coolotter88: The EU isn't that much better, I understand the city of Munich is $55 billion in debt, with Berlin not far behind ( I hope someone will correct me on this if I am wrong). With the comparatively high unemployment in Europe, one would think they would be better with money. Plus, there are those of us who would revolt outright at the attempt. Not that we dislike Europe, but we're significantly more independent in spirit on this side of the pond :-) 

[simplaya1234 0]

guys you know what, I say the US needs to save more money. The money on Iraq right now is being burned because of all the corruption in the country. However, there are money other ways to save and also to gain money. The US right now has quite a favourable income and corporate tax rate, especially when you compare it to CAnada and Europe. If the US raises the tax maybe just a teenie bit, like around 5 to 7 percent, it does help, because the US has a huge cashflow and cmon, look at the economy, it's still recovering. Why? Canadians are sick of shopping in Canada and they would go to the outlet malls in the states because it's so much cheaper to shop down in the states. That's one reason but there's so much more. It's just that people are being scared of the small things and it's not like we're going into the great depression like our grandmas and grandpas did decades ago. At least we're not facing as much of the fear that people feared before WWII and around that time.

We have potential! We just need to save more. Even if we go into a recession, there's still advantages to it. Think about it.

Oh yeah, to help our economy, we really need to invest a lot more money into enviro-friendly fuel and energy. BEcause if we do that, we can just leave out oil and [Content] . WE can make a lot mroe money and be more self-sufficient if we invest more in alternative energy.

Seriously, those crazy [Content] people down there are getting too much attention. If it wasn't of their wars, they would be rich and corrupt and they use the money on their luxury and it needs to stop.

Marc

[blahdy 21]

If the US raises the tax maybe just a teenie bit, like around 5 to 7 percent, it does help, because the US has a huge cashflow and cmon, look at the economy, it's still recovering.

quote>

Practically all of revenues from US federal income tax is used to pay off the debt on government issued bonds and treasury securities, which are sold at the Federal Reserve market place anytime the govt prints more money as they can't seem to control their spending.  So... if you have excess cash on your hands, you should go ahead and open up a money market funds account that specializes in govt issued bonds/securities while the return is good

Raising tax would help in terms of cashflow for paying off the debt, but with the tendency to spend in Washington, it is realistically not going to do anything to solve the issue.

We have potential! We just need to save more. Even if we go into a recession, there's still advantages to it. Think about it.quote>

Yep, indeed..

[

[Voar Tok 4]

Originally posted by: manticorefan One responsible party I don't see blamed is the Federal Reserve, the true source of this problem. Congress allowed the system to be created, and we're being torn down brick by brick ever since. Bush 1&2 didn't create it, neither did Reagan, Clinton, or Carter. It's the reason the Founding Fathers wrote so many warnings concerning both central banking, and fractional reserve banking. They were aware of the danger 200+ years ago.quote>

Actually, only certain ones of the Founding Fathers were opposed to central banking.  Alexander Hamilton was very much in favor of the idea, and had he had enough time, there wouldn't have been a US debt by the time he finished.  The main person who didn't want it, if I remember correctly, was Thomas Jefferson - the man who's vision for the US was one of a country filled with quiet farmers peacefully working the land.

The fall of our republic is inevitable; partially because of this debt. It was designed such so that it can NEVER be repaid, much like a credit card.quote>

Again, it could be repaid.  It'd be a giant pain in the butt, but it could be done.  Granted, the debt is at a sublime total now, but then again, so is the amount of money that the government spends every year on pork barrel politics.  Alaska didn't need several dozen miles of park trails running through the frozen tundra any more than Texas needed a river segment de-weeded.  It's estimated that up to a third of the government's budget gets wasted on crap like this.

The Federal Reserve is a for-profit, foreign owned corporation that is in effect operating as a receivorship for the bankrupt US government.quote>

So is the Post Office.  It's a federal corporation.  They aren't going away.  Frankly though, it'd be better that the Federal Reserve be doing it than a conglomeration of private banks hell-bent on making a few more dollars.  I'm not sure why you say that it's foreign owned though.

Under the Constitution, gold and silver are the only lawful money.quote>

Incorrect.  The Constitution says that the government has the right to coin money.  This presumably means that paper money is technically illegal, but in working practice, that is nothing more than adiaphora.  No mention is made as to what the coins must be made out of.  The Constitution never mentions a gold-standard.  That while, IMHO, being one of the smarter economic moves of the government, is no where legally required anymore that I know of, and most certainly not in the Constitution.

That is why it's "tender" on the bills; this word wasn't used as a verb until it appeared on paper money.quote>

American money reads "This note is legal tender for all debts, public and private."  In that context, the word tender isn't a verb.  It's a noun.  While it was originally used as an adjective to describe soft objects or some emotionally charged moments, in this sense, it means payment.  Translated into really simple concepts, that means that the money has to be accepted as payment for any sort of money owed.  That technically means that the airline industry, with its credit-card only payment system, is in violation of the law, but I digress.

It's also the reason Henry Ford said, "If the American people knew what was going on, there would be revolution before tomorrow morning." Americans should be demanding change, but are too distracted by Paris Hilton and the iPhone to care. This issue cuts across political and cultural lines, but so does the apathy about it. quote>

Unfortunately, most Americans don't know diddly squat about how money works, nor do they care to learn.  We've been electing people like this to places of public office, and now we get to reap what we sowed.

[simplaya1234 0]

that's what I mean, if we raise the tax a bit more, then the cashflow is even higher. so with that advantage, we can quicken the debt payoff and try spending less.

hey remember, we really need to invest more in self-sufficient energy. which all or most mean is enviro-energy. hey, oil is a big problem too. the reason why clinton lowered teh debt was because the oil prices were stable too. now, since it's expensive, private sectors adn the government has spent alot more money on energy in order to get what we want and need. which by all means, middle east gets the attention.

[Voar Tok 4]

Originally posted by: simplaya1234 that's what I mean, if we raise the tax a bit more, then the cashflow is even higher. so with that advantage, we can quicken the debt payoff and try spending less. quote>

The concept of spending less is nice, but it's much harder to do that than to just say we're going to spend less.

hey remember, we really need to invest more in self-sufficient energy. which all or most mean is enviro-energy. hey, oil is a big problem too. the reason why clinton lowered teh debt was because the oil prices were stable too. now, since it's expensive, private sectors adn the government has spent alot more money on energy in order to get what we want and need. which by all means, middle east gets the attention.quote>

That is only a small, almost non-important part of the equation.  The average person will see this as pain at the pump, but to the government, it's better, from an economic standpoint, to not finance home-based renewable energy.  The government gets to charge tariff fees on foreign oil.  They don't get to do that on domestic products.

The problem ultimately needs to be fixed at the bottom before it will come anywhere near being fixed at the top.  The average American is pitifully in debt.  This isn't so much as they can't afford their life necessities, but more that they live outside their means.  If we can get the American public to take economic responsibility, then the rest of the pyramid of power will start to fall in line.  The key is to get the people out of debt first.

[Easy Bakes 253]

Originally posted by: Voar Tok

The problem ultimately needs to be fixed at the bottom before it will come anywhere near being fixed at the top.  The average American is pitifully in debt.  This isn't so much as they can't afford their life necessities, but more that they live outside their means.  If we can get the American public to take economic responsibility, then the rest of the pyramid of power will start to fall in line.  The key is to get the people out of debt first.quote>

 

Thats there is the real solution. Peopel need to stop living beyond thier means( a bit difficult nowadays ill admit with prices they way they are now).
charging everything is a bad way to manage money.
But then the credit card compainies are partly to blame for that.
How easy is it to get  a credit card now? I must get 20-30 applications in the 
mail each month, which also drives the identity theft gme as well.
Giveing cards to anyone who signs up is not a good way to teach finacial responibility.
I remember when they actualy checked if you were employed before they approved your card.

[LarksTonguesInAspic 28]

Voar Tok: Upon re-examination of Article 1, section 10; you are correct. My apologies for my misstatement. The question is, is it legal for a state then to accept non-gold and silver money, even from the government? As for paper money, if I recall Economics 101 correctly(it's been a looong time) bad money(paper) drives out good money (precious metals-based) only as long as the gov't can support it. As in most things, what goes up must come down. If we artificially inflate the value of a 6"x2.5" piece of paper to $100, it will inexorably be drawn back to its infintesimal value. That's one reason for inflation, we are constantly fighting this tendency. Eventually, the system can no longer be supported, and good money will drive out bad. What we have now is currency by fiat; it only works because we agree to accept it as such and it makes no difference at this moment if it's printed on paper plates. The bills used to say they were lawful money, they no longer do. It's not a stretch of logic to assume there is a good reason why! What we accept as currency is actually an IOU that must be paid back at some point with interest, another reason for inflation. On the Fed Reserve: A large number of the member banks have foreign ownership, like Warburg, Rothschild, Lazard Salomon, etc. The Fed flatly refuses to release any numbers regarding this aspect and are outside SEC juridiction. One does not have to be a conspiracy theorist to be suspicious of the reasons why that info is so closely held. The Fed is a for-profit corporation, the extent of foreign involvement doesn't have to be very high to warrant alarm due to the Fed's absolute control over monetary policy and its immunity to gov't regulation or investigation. Fractional reserve banking is always a house of cards seeking a small irregularity to cause its collapse, basically a high-falutin Ponzi scheme with the support of " The full faith and credit of the US gov't". As a side note: as a newbie here, it is a privilege to discuss these things with the legendary Voar Tok. Not buttering you up, I've just noticed your handle around this site quite a bit. I speak no Klingon, care to translate your name for the curious?

[Voar Tok 4]

Originally posted by: manticorefan Voar Tok: Upon re-examination of Article 1, section 10; you are correct. My apologies for my misstatement. The question is, is it legal for a state then to accept non-gold and silver money, even from the government? quote>

That's a moot point.  Every American, corporation, and government entity is legally obligated to accept it as valid payment.  It may not technically be legal for them to accept it, but it is definitely illegal for them not to.

As for paper money, if I recall Economics 101 correctly(it's been a looong time) bad money(paper) drives out good money (precious metals-based) only as long as the gov't can support it.quote>

Yes, bad money does drive out good money.  However, we shouldn't make the assumption that paper money is inherently bad.  Anything that is regarded as currency that has an accepted value that is more than either the value of the material it's made out of or is backed by is bad money.  Paper money is fine so long as there's a proper amount of precious metals in reserve for all of the paper money floating around.

As in most things, what goes up must come down. If we artificially inflate the value of a 6"x2.5" piece of paper to $100, it will inexorably be drawn back to its infintesimal value. That's one reason for inflation, we are constantly fighting this tendency. Eventually, the system can no longer be supported, and good money will drive out bad.quote>

Good money doesn't drive out bad money until the bad money collapses.  Then, there's a vacuum in which the bad money is worthless and people go for the gold.  In reality, you're back at square one.  Good money is solid and secure and is where everything startes.  Bad money drives out everything, including itself if it's not prevented.  The cycle has started anew at this point.

What we have now is currency by fiat; it only works because we agree to accept it as such and it makes no difference at this moment if it's printed on paper plates.quote>

Yep.

The bills used to say they were lawful money, they no longer do. It's not a stretch of logic to assume there is a good reason why! What we accept as currency is actually an IOU that must be paid back at some point with interest, another reason for inflation.quote>

The government still made the stuff legal currency.  Despite the fact that it's only intrinsic value is the paper and ink it's printed on, it's all still supposed to be worth whatever is printed on it.  Economically stupid, but the reality of the situation.

On the Fed Reserve: A large number of the member banks have foreign ownership, like Warburg, Rothschild, Lazard Salomon, etc. The Fed flatly refuses to release any numbers regarding this aspect and are outside SEC juridiction. One does not have to be a conspiracy theorist to be suspicious of the reasons why that info is so closely held. The Fed is a for-profit corporation, the extent of foreign involvement doesn't have to be very high to warrant alarm due to the Fed's absolute control over monetary policy and its immunity to gov't regulation or investigation.quote>

The one thing that doesn't usually get mentioned is that banks that have ties with the Federal Reserve often have them because they "buy" money from the Federal Reserve.  Basically, they borrow money from the federal reserve to loan to their clients.  A lot of the banks you mentioned would be fools to not do something about having access to those funds.

Fractional reserve banking is always a house of cards seeking a small irregularity to cause its collapse, basically a high-falutin Ponzi scheme with the support of " The full faith and credit of the US gov't".quote>

Actually, assuming a buffer amount of approximately 15% of monetary assets, banks can afford to use the fractional reserve system because they rarely ever need all that money at once.  Alexander Hamilton and Adam Smith both knew this would work so long as the private banks didn't go for broke.

As a side note: as a newbie here, it is a privilege to discuss these things with the legendary Voar Tok. Not buttering you up, I've just noticed your handle around this site quite a bit. I speak no Klingon, care to translate your name for the curious?quote>

There's nothing special about it.  It's just something I tried to make tribal sounding.

[Odainsaker 2,133]

Hehe, wait till you start looking at the commodities and futures markets, where contracts and promises circulate for more of a particular commodity than could ever possibly exist in reality. As an example, we are trading on the markets more promises of platinum than has ever been mined in the history of mankind. This seemingly counter-intuitive system works so long as we are never called upon to pony up all at once, and contracts just change hands until they are bought back or settled, never actually being tied to any identifiable quantity of existing platinum. Physically possessing the actual material promised is not the point; it is the value applied to the traded contract itself that matters.

Which may also suggest that hoping for a gold standard or an underlying precious material basis for money is also futile.

[pepsi71ocean 2]

Originally posted by: coolotter88 not one country in the world will force the US to pay its debts.

a) they're too afraid of the US power

b) it wouldn't benefit them anyway if they made the US pay their debts.

there isn't much we can do about lowering the debt. to completely pay off the debt at this very moment, every single person in the united states has to pay over 200,000 dollars. it's a common misconception that the war is causing the debt but it really isn't. there are other programs the government funds that cost way more than the war in Iraq. right now, our government spends several hundred billion dollars a day. raising taxes would do little to slow down the debt. we would need to do as Canada did and cut a lot of benefits.quote>

 

I think that it wouldn't be one country, but a bunch of countries that would attack the US to pay back its debts. Its more or less what i think. Its obovious that even china could attack america and win. I mean our billion dollar army doesn't have the man power to hold a war in 3 countries let alone a direct attack from a nation. IMO it will be a bunch of countries that will attack, because its not always technology, but numbers that win war. 

Debt wise, i think that we are spending our money in the wrong ways, and in ther wrong places. we shoudl charge people that want to drive all these cars like hummers and such that get like 10 miles to the gallon a users fee of like 5,000 a year, and then high for cars that get lower. then take that money and put it towards the national debt. Then get rid of some of the technology that costs so much, and replace that with manpower. a smart bomb is not going to kill terrorist in a  city, soldiers will. soldiers cost less.

As some else stated earlier if china invaded or any other country invades America I will be the first one to walk out of my house with my rifle and shotgun ready to defend my country. Most of my neighbors feel the same way, and where I live everyone one has a gun of some sort, and everyone learns how to shoot by like 12 or 13. so if any nations wants war, well hide in the woods for ya, just waiting .

[LarksTonguesInAspic 28]

pepsi71: That's how so many local yokels can tie us up in Iraq endlessly. Guerilla warfare is every generals nightmare, due to the ease with which a small group can befuddle a very large and powerful one. Think of the Soviets in Afghanistan. China has no need to invade, though. They are approaching a point where they can cripple us financially.

[pepsi71ocean 2]

Originally posted by: manticorefan pepsi71: That's how so many local yokels can tie us up in Iraq endlessly. Guerilla warfare is every generals nightmare, due to the ease with which a small group can befuddle a vary large and powerful one. Think of the Soviets in Afghanistan. China has no need to invade, though. They are approaching a point where they can cripple us financially.quote>

 

you are right, the hardest part is how and what will happen if the chinese did ruin our country finanically. i wonder what would happen to this country. Athoughn personally i think we are headed for a depression my self. withing the next 20 years i think that we will be in a depression and that it will cause some sort of revolution in this country. what kind of revolution im not sure of yet.

[toxicpiano 125]

Originally posted by: Creathir

Originally posted by: Cjah I'm just gonna say this...when the US is forced to pay back its debt....

two things will happen we...probably won't pay it....

Or China will invade....

either way I'll be on the first ship back to Hungary when either one of those happens......quote>

 

HA! I would like to see China invade. They cannot even invade a tiny island just off their coast, let alone cross the Pacific, then invade the most powerful nation in history...

I think you are going to be here for a long time.

 - Creathirquote>

I hope you appreciate that China has the largest army on the planet:

"With 2.25 million active troops, the People's Liberation Army (PLA) is currently the largest military in the world. The PLA consists of an army, navy, air force, and strategic nuclear force."

[LarksTonguesInAspic 28]

Since there's no 2 post rule here, I have a side note: Nice to see a whole room in general agreement about its subject, if not in agreement as to solutions. But everybody (including me) is playing so nice; much better than the firestorm kicked up in the creation/evolution room (my own part in that acknowledged) or the smoking ban room that had so much name-calling. A thanks to all, this discussion is actually pleasant to be a part of. Now, if we could just get the "Powers That Be" in the US to pay attention!

[toxicpiano 125]

Interesting fact:

"U.S. military spending in 2006, over $528 billion, was 46 percent of the entire military spending in the world and greater than the next fourteen largest national military expenditures combined"

That is excessive imo.