You’re right. It not a hard limit. It’s an unknown limit. If you don’t like 100%, do your own research and pick your own. At debt increases of 10% per year (Obama) or 8% (Republicans) the difference between the historical 100% and Japan’s 125% is two to three years. When it happens the people across America that other people look to explain this stuff will NOT say, "Well no one saw that coming."
Tell that to Bernanke and his quantitative easing.Bernake has made mistake after mistake. Quantitative Easing Explained. He’s buying government bonds now to keep interest rates down which . . . Lord help us.
The dollar is still the world's reserve currency. I am guessing you are about 15 years old.Still? That is the point. When we default your sentence will read "The dollar was still the world's reserve currency."
Where do you come up with this nonsense about the imaginary point of when the publicly held debt equals 100% of GDP. Yes, bond ratings will decline and the cost of borrowing will go up, but there is no automatic default. The real problem is when debt servicing costs continue to eat up more and more of the federal budget that we can no longer operate our government. Then we are forced into default. Congress has been raising the debt limit for a long, long time.Yes, right, the actual number whether its 125%, 90%, 99%, 113% is dependent on circumstances, bond buyer opinion, domestic interest rates, foreign interest rates, etc. etc. I think though you are starting to admit that there is a point when the debt increases exponentially then geometrically (the exponent of interest starts to increase too all derivatives are increasing, it doesn’t have a finite convergence). That limit is a matter of opinion and your, mine, Obama’s, Republicans’ etc. opinion doesn’t matter. It’s only bond buyer’s opinion that matters. When enough of them think we will default, we are forced into default. Historically bond buyers flee around 100%. Pick your own limit. Just because you refuse to pick one doesn't mean bond buyers wont and it doesn’t change the decision we need to make today. What do you think our limit will be? I'll give you a reference, "This time it's different."
It makes more sense to means test it. SS is not our biggest problem. It can be solved relatively easy thru a combination of ways. I prefer privatizing it with a small defined benefit program. Raising the retirement age every year is simplistic and won't work for those blue collar workers who have been engaged in hard physical labor. Some slight increases in the retirement age, changes to the computation of benefits and COLA, and small increases in payroll taxes can keep the system solvent.Means test it? Commie. ;) Seriously though, even though there are worse problems, it doesn’t mean SS doesn’t need to be cut. To balance the budget we need to cut SS, Medicare and Defense by about 30% and the rest need to be cut 50%. THAT is how high our deficit is.
Medicare and Medicaid are by far our biggest problems and the most difficult to solve. These programs are bankrupting the nation.Hmmm kind of like the interest rate is higher on those two than SS which makes them almost impossible to deal with. Where have I heard that before? Medicaid needs to be block granted to the states. Medicare needs to be turned into a voucher that seniors can use to buy their own senior health care program. Either that or single year benefits need to be capped at, say, $80k per year. We simply can’t afford to pay for all the technology that the folks like Genetech and GE can come up with. I’m waiting for news of the first $1billion dollar pill.
If/when we default, the dollar will no longer be the world's reserve currency. The Chinese, Russians, Arabs, etc. are looking to supplant the dollar, but they don't have any real substitute except for a basket of currencies. The US economy is three times that of China. The Euro is collapsing. Any default by the US would send the global economy into a tailspin. The US consumer has acted as the world's global economic engine. A broken dollar will make it very difficult for Americans to buy imports.
Means test it? Commie. ;) Seriously though, even though there are worse problems, it doesn’t mean SS doesn’t need to be cut. To balance the budget we need to cut SS, Medicare and Defense by about 30% and the rest need to be cut 50%. THAT is how high our deficit is.
You don't cut with a meat ax. Moreover, it much more difficult than that for the entitlement programs, which will face an increase in enrollees as our population ages, i.e., the number of people over 65 will double to twice what it is now in 20 years and by 2030 one in five will be 65 or older. As I have stated previously, we need a long term plan on how to reduce our deficits and institute fiscal responsibility. There are many different ways to do that, but in the end, it all boils down to political will by our political leadership and the people. There is no easy or painless way out of this mess.
Hmmm kind of like the interest rate is higher on those two than SS which makes them almost impossible to deal with. Where have I heard that before? Medicaid needs to be block granted to the states. Medicare needs to be turned into a voucher that seniors can use to buy their own senior health care program. Either that or single year benefits need to be capped at, say, $80k per year. We simply can’t afford to pay for all the technology that the folks like Genetech and GE can come up with. I’m waiting for news of the first $1billion dollar pill.
There is no doubt that health care must be rationed. I would rather have the people do it than the government. Paul Ryan, Tom Coburn, Rep. Price, and others have some good plans to address the problems. Unfortunately, they don't have the support of the Dems or many Reps. I am pessimistic about anything being done until it faces crisis proportions and then the government will be forced to act making things much worse.