Posted on 03/23/2016 2:45:59 AM PDT by Citizen Zed
America isn't broke. Nor is it on the verge of a government debt crisis (whatever "crisis" even means for a nation whose debt is printed in a currency that is both its own and the world's reserve). America is not in decay, and the last thing the U.S. should do is rashly withdraw from a dangerous world because of those mistaken beliefs.
This should be especially clear after the Belgium terror attacks.
Yet retreat is just what Donald Trump seems to be proposing. In an interview with The Washington Post editorial board Monday, Trump questioned the U.S. role in NATO and presence in Asia due to the financial burden they require:
[I mean, we pay billions — hundreds of billions of dollars to supporting other countries that are in theory wealthier than we are. … When you look at the kind of money that our country is losing, we can't afford to do this. Certainly we can't afford to do it anymore…. I think we were a very powerful, very wealthy country. And we're a poor country now. -- Trump]
Looks like we finally found something Trump is in favor of off-shoring: America's security.
Now, it's certainly legitimate to evaluate the mission and cost of America's overseas military commitments and posture. But that's different thing than scrapping our military alliances — or threatening to do so as some ham-handed budget negotiating tactic. Leading the free world, reassuring allies, and deterring aggression have little overlap with the skills needed to drive a hard bargain with a potential tenant in Trump Tower.
And yet, Republicans might give Trump's defense policy ideas more of a hearing than they deserve because of their persistent debt fears. After all, it's mainstream GOP economic thought that U.S. finances are precarious. How could they not be given the $19 trillion federal debt — $22 trillion if you include state and local government? These are figures Trump always mentions, as do many Republican politicians. They provide handy justification for arguing we can't afford to invest in science, repair and upgrade our infrastructure, or bolster wages for low-income workers.
But here's the thing: The U.S. is far from a poor nation. American households entered 2016 with a net worth of nearly $87 trillion, according to the Federal Reserve. To put that ginormous number in some context, China's private wealth has been estimated at $23 trillion. Even if you factor in America's debt-laden public sector and China's large state-owned companies, the U.S. still has a $45 trillion wealth edge.
There are other ways of looking at national wealth that also show America's riches. The value of U.S. intellectual capital has been estimated at around $9 trillion, with the value of the intangible assets — such as patents, copyrights, and general business methods — at nearly $15 trillion. And given Trump's appreciation of brands — he generously values his own at $3 billion — you would think the businessman would appreciate America's, which has been valued at close to $20 trillion.
Maybe all this wealth is one reason global financial markets don't seem so worried about the U.S. debt. Well, that and the U.S. tax burden being one of the lowest in the developed world. The dollar is strong, and interest rates are low, as are inflation expectations. None of this is to say the U.S. should be a spendthrift in either defense or social spending. Without entitlement reform, Medicare and Social Security will require massive tax increases to keep their promises. Yet Trump would leave them untouched, vowing implausibly to fix their fiscal problems through higher economic growth alone.
The U.S. isn't bankrupt. Our pockets aren't empty. We aren't a pauper nation.
But, of course, you can't promise to make America great again without arguing that it currently isn't.
But here’s the thing: The U.S. is far from a poor nation. American households entered 2016 with a net worth of nearly $87 trillion, according to the Federal Reserve.
...
So all the politicians have to do is tax that wealth away.
The author isn’t to be trusted.
After 16 years of misgovernance by Obama and Clinton, this country is in horrifying condition. Don’t believe it? Just listen to Mrs Clinton and Bernie, they’ll tell you.
Pethokoukis has a good point.
...
The author is campaigning against Trump.
Make America Great Again.
Say what?
To cite how the debt problem isn't a debt problem, he invoked PRIVATE "wealth" ($87 trillion).
Meaning, to "solve" the non-existent debt crisis and pay off the debt, the government would have to seize nearly one-quarter of the private wealth in the hands of citizens.
Nice point.....
This guy left out mentioning unfunded liabilities above and beyond the current $20tril that takes the overall debt to over $100 trillion, more than the nation’s households are worth. We’re broke and in the hole.
It isn’t just about wealth
Compared to what we used to be, the author is an idiot. I suppose that almost 20 trillion in debt along with the over 100 trillion in unfunded liabilities is just Monopoly money to him.
The first will send us into a massive depression and the second is the oldest con game in the politicians' handbook.
yeah, at the top of his head.
projected deficits of a trillion a year forever soon and everything’s peachy.
100 percent of gdp.
japan is considered a disaster at 200.
do we need to wait till then to be a disaster.
I thought Jack Krugman, or whatever his name is, wrote this at first.
if you owe everything you’re worth, and then some, and every year you spend 6 percent more than what you make, you you gonna be doing in 10 years?
If this claptrap is believed, then that person will then have to believe that Obama has done a fabulous job running the country.
So step right on up and agree with this article.
The argument is that our nation owes at least $20 Trillion to the banksters and treasury holders, and has unfunded obligations of at least another $120 Trillion.
That makes us broke, no matter what formula or comparison you want to use.
The New World Order is not a conspiracy theory. It is a conspiracy fact. The United Nations, the EU, Obama, the central banks, the Vatican, and many in Congress (TPP anyone?) not only want a one world system, they are working overtime to put it in place.
This follows Biblical prophecy, in that the Anti-christ figure will install and rule over a one world economic, religious, and political system.
The US now has its teats in a vice economically. The US Dollar as the reserve currency is the only thing holding our leaky boat together. Once that is removed, we become Third World economically, almost over night.
“Pethokoukis has a good point.”
That was one of the most clueless articles I’ve ever read on FR. There are so many ways to shred his naive and immature positions.
Can’t wait for the article on peaceful jihad.
After 8 years of Clinton, this guy was a breath of fresh air, and I’m glad it was him rather than Gore in the White House on 911.
But he stubbornly, stubbornly, refused to secure the border.
I remember the radio interview with his Homeland Security chief. If you’ll remember, Duncan Hunter had got passed a law that required the building of the border fence, and also authorized the money to pay for it.
They asked, why hasn’t the fence been built? And the answer, there is no money. But the money was authorized as part of the law... Yes, the money was authorized, but the bill didn’t require that the money be spent ON THE FENCE.
That’s when my eyes opened and I realized GW would never close the border, pass a thousand laws, he would never do it.
Go back a few years. It was my belief when he came into office that his dream was to remove the border with Mexico. So glad were we to see Clinton gone, that conservatives were powerless to stop him. Then came 911 and Mexico refused to offer us any kind of support, not even condolences. They took the side of Canada and France attacking us in the UN. And while some 30 countries sent troops (Honduras sent a couple hundred) Mexico sent nothing.
I always said, for 200 soldiers Bush would have taken down the border in his administration. But their behavior gave conservatives the opening and the nerve to stop Bush’s plan to open the border completely. Though its hard to argue that it isn’t open now already.
We just look über wealthy as a whole right now compared to the rest of the world because we have the best printing presses in the world and an infrastructure in place that was built up by our forefathers and prior generations making for a great illusion. We are probably the most in-debt in the world. We've been robbing Peter to pay Paul and then stealing from Paul for a long time now abp Obama is ensuring that we will never catch up and eventually fall. Those who put him in power knew what they were doing. His job is to set the stones in place that will ensure our destruction. Its too bad that he has al ost half fooled.
I would love to know how he arrives at that figure.
No doubt he calculates part of that net worth using IRAs and 401Ks. If the bloated, rigged Stock Market collapses (and I think it eventually will), then you can wipe out a very large percentage of that.
Whatever is left over after the crisis, the government plans to seize in a "emergency measure."
What else is he using? Bank savings? With laws passed by Congress, our bank savings can be confiscated to cover the Banksters and Wall Street Gamblers derivative exposure.
New law means taxpayers must back banks' 'incredibly risky' derivatives deals
What else? Well, our homes are not really ours, even if we own them outright with no mortgage. Property taxes mean more than an irritant. In a crisis, they mean that governments can charge us whatever "rent" they deem necessary in order for us to live in "our" homes. Try not paying your property taxes and watch what happens to "your" property in a very short period of time.
The average black family has a net worth (after automobiles and clothing are taken out of the equation) of $1,700. That is almost 70 times less than white families.
If we have a collapse, the government will take all it can in an attempt to quell the riots. You can count on it.
Exactly.
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