Posted on 02/26/2010 12:22:23 PM PST by GeronL
Our debt will soon equal the GDP. How could we possibly pay it off without huge spending cuts? Increasing taxes significantly will not work, I think we all know the harm that will do. Something is going to have to give.
This country is endangered by its very own lifestyle of pawning everything off to the future. Well, the future is arriving. I don't think it will hold off for a lot longer.
China and other countries are already getting very nervous about buying our debt at the same time we are producing more debt than ever before. Has the government pressured US banks into buying debt that foreign countries won't buy? Is that one of the reasons why lending has fallen off?
Will those banks have anything but worthless bonds if the US "defaults"?
I have huge doubts that even a GOP Congress will make big spending cuts. Will they defund Planned Parenthood? NPR? ACORN? etc etc. Will they trim entitlement programs? Will they lower the income level to get those entitlements?
I really doubt they would and no way Obama signs it.
They might think they can get away with the sham for a "little while longer" by padding GDP numbers with government debt spending but how long will that work?
What if Japan, China and other creditor nations just announce they will buy no more debt unless the terms are changed to protect them from a default or from the US trying to inflate its way out.
Obviously the US could never agree to such terms. The refusal will be seen as a sign that the US really will inflate its way out or default.
That would start a global panic, wouldn't it?
When the last 2 or 3 economic cheerleaders here on FR finally throw in the towel.
I'm thinking that if abortion was not as legal is it is, there are probably millions of people more in the US able to keep Social Security going. Plus, there would be less illegal aliens working in the US who send their earnings to Mexico. Instead, there would be US citizens working those jobs, spending or saving in the US.
Medicare D should be repealed, then Medicare A/B, then Social Security, in that order. Every other budget item don't do much for the debt/deficit.
You’re right about China, but realize this is a two-way street. By pegging their currency to the dollar, they’ve kept prices for China-made goods artificially low, but in doing so they’ve also created millions of jobs for Chinese peasants, something decades of Communism failed to do. They need someone to continue consuming at the rate we have been, or those factories start to slow down, and they have angry, starving people to deal with. The resolution of the trade imbalance will be a delicate tightrope act, with serious consequences for both sides if they screw it up.
Historically, the US Dollar has been the safe haven investment. Why? Because up til now the world has had great faith in our ability to fulfill our promises. More than any other nation, China has bet it’s future on the US, by accumulating huge reserves ($1-2 trillion, most agree) in exchange for all the stuff we’ve bought from them. But what is a dollar? It’s not gold or “real money”, it’s just a promise to pay. China has some difficult times ahead, as the economic lifeblood they need can no longer come from US at the rate it has in the past, and as they are forced to revalue the RMB.
Here’s my doomsday scenario - probably triggered by some random event we can’t even begin to predict:
The financial markets will suddenly realize there is much more risk to US Treasuries than has been priced in thus far. This will either force the Treasury to pay higher interest to attract buyers, or the Fed will be told to print up more money to buy the T bills that otherwise would not be sold. This will bring the specter of inflation - say at 10% or higher, with no growth until the debt is inflated away. Because it requires no overt political action, I think this is likely the default choice (especially considering the gutless wonders we have in DC).
All the easy options are behind us. The 30+ year orgy is over, the days of over-spending and over-consuming will end, one way or the other, ushering in a new economic reality. The only thing that is certain is that the economy of the future is going to be a lot different than the economy of the past. And it will be painful.
A war between Israel and Iran that would close the Persian Gulf. The price of oil would skyrocket, gasoline would go way up in price, igniting inflation and layoffs. Stock market would collapse. Hussein would not know how to react.
I second that.
Too bad the voters did not listen to Ross Perot 20 years ago when he warned us of the giant sucking sound that is all your jobs leaving the country. Politicians, bankers and big business have been screwing the people for many years in many ways.
Too bad we dont have a free press. I trust Russia Today (Pravda) more then I trust the mainstream media.
Rant off
It’s likely that at some point a lot of people who work and have worked hard will simply leave the country and emigrate to countries like Panama, Costa Rica, small countries with little bureaucracy. After taking their money, manpower, and skills out of the country, the government will likely end up supporting an entire welfare nation that will go bankrupt and there won’t be anyone to start/run/build businesses since no one will want their businesses in the US because of taxation, forced AA, and other similar things.If that was true, Sweden would have collapsed a long time ago. Taxation doesn't destroy countries, it just weakens them, they get slow and a bit lazy. It *does not* cause mass emigration. Countries collapse when they default on their debts. Taxation is odious, debt is fatal.THen the US will completely collapse and be left out of future business/diplomatic/military alliances and treaties, business or otherwise.
Yeah...coming for sure...and watch for taxes etc. on foreign companies here to esculate.
He would enact emergency powers, dissolve congress and become Presidente for life. Ala Hugo Chavez, they are buds you know.
Well, Sweden is a small country that doesn’t have the amount of people we have on the rolls, plus our country is bigger and much more people literally flooding in.
You should try signing out and then resigning in. It’s happened to me too.
I did. It didn’t help.
I had the same problem for a while today. I thought maybe my check had bounced.
what about matching shoes?
Or erase your website history. I think that’s what fixed it. I don’t know why, but it did.
lol!
It could have. The bank maybe insolvent!
#9
Thats probably close to the truth
I couldn’t see my post 4 minutes after I posted it. The server seems a bit slow
lol
It all seems to be fine now. For now...
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