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“No Way Out” of Debt Trap, Gross Says: U.S. Living Standards Doomed to Fall
Yahoo finance ^ | March 8 2011 | Stacy Curtin

Posted on 03/08/2011 8:18:37 AM PST by Michel12

Debt, debt and more mounting debt is plaguing countries around the globe. In this U.S., states across the country face a collective $125 billion shortfall for fiscal 2012, while Congress is facing a budget gap nearly 10 times that size. PIMCO founder and co-CIO Bill Gross has previously said that if the United States were a corporation, no one in their right mind would lend us money. For the last decade, we’ve been “relying on the kindness of strangers” to help cover our debts, he tells Aaron in the accompanying clip. By “strangers” he is referring to our foreign counterparts, like China for example. Basically, for years Americans have spent their hard-earned dollars on less-expensive Chinese made goods. With great gratitude, China turned around and used all those dollars to buy up U.S. Treasuries and other dollar-denominated assets. But now after years of reckless spending, America’s debt level is nearing a breaking point and can no longer rely on foreign capital as a last resort. “When a country reaches a certain debt level, confidence in that country’s ability to repay that debt becomes jeopardized,” says Gross, citing the work of Ken Rogoff and Carmen Reinhart in This Time Is Different.

(Excerpt) Read more at finance.yahoo.com ...


TOPICS: Government; News/Current Events
KEYWORDS: bankrupt; billgross; debt; democrats; doomed; gross; livingstandards; obama; pimco; socialistdemocrats; spending; us
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1 posted on 03/08/2011 8:18:39 AM PST by Michel12
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To: Michel12

more great news today.....not


2 posted on 03/08/2011 8:19:52 AM PST by dennisw ( The early bird catches the worm)
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To: Michel12

The best and the brightest (democrat and republican) up in Washington have mismanaged the financial health of this nation for decades.

This is a national security issue and those responsible should be held to account.


3 posted on 03/08/2011 8:21:17 AM PST by servantboy777
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To: Michel12

Oh Obama’s new spending plan will get us out of debt,just ask him. /s


4 posted on 03/08/2011 8:22:36 AM PST by Vaduz
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To: servantboy777

We the people have been royally screwed over.....


5 posted on 03/08/2011 8:23:01 AM PST by AngelesCrestHighway
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To: servantboy777

But I thought Michael Moore said we’re NOT in debt. I’m SOOOOOO confused!


6 posted on 03/08/2011 8:25:19 AM PST by LibsRJerks
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To: Michel12

Be prepared...


7 posted on 03/08/2011 8:25:39 AM PST by goodnesswins (Unlike the West, the Islamic world is serious.)
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To: Michel12

We can’t rely on foreign capital to finance our annual deficit for the simple reason that it’s just not there. At $400 billion, there was enough surplus capital abroad to buy the treasuries and “externalize” our debt. At $1.6 Trillion, it exceeds the world’s capitalization capacity (the money ain’t there). So we have to internalize and monetize the debt. In three to five years we will see Weimar-style turbo inflation in the U.S. economy. The signs are already there. Unless the government MASSIVELY slashes spending and we endure a bad, but recoverable, depression, the outcome will be an unrecoverable tailspin.


8 posted on 03/08/2011 8:25:53 AM PST by henkster (Before we make any more "investments" we ought to be shown the prospectus.)
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To: Michel12

When the collapse does occur, I expect, and will demand:

1) trial and incarceration of ALL congress and senate critters who have voted throughout the years for increasing the dept.

2) adding these idiot people names to our list of “don’t let fly out of the country - so we can get our hands on them

3) they must forget ALL monies gained in their net worth - from the time they opted to become a felon (e.g., senator or congresscritter) and the present.


9 posted on 03/08/2011 8:25:55 AM PST by Da Coyote
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To: servantboy777

The public is just as stupid as they are easily manipulated by TV and the media. Some people here think it is a big joke that I point it out. They respond “oh Fox is our friend or I just watch TCM or ball games.” BS - you are still supporting the beast.

The big joke is when they see their standard of living drop dramatically and more and more freedoms are taken away. Old people will become too expensive for society. People will be robbed and beaten and the perps will claim social justice.

The Repubs suck especially RINOs like MCCain, Bushes, et al but the Dems are 10X more evil.


10 posted on 03/08/2011 8:27:56 AM PST by Frantzie (HD TV - Total Brain-washing now in High Def. 3-D Coming soon)
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To: Michel12
What do you expect when the spending baseline jumps nearly one trillion dollars in a single year.

I'm not worried though. Congress is talking about cutting spending this year anywhere from 4 to 60 billion.

11 posted on 03/08/2011 8:28:25 AM PST by skeeter
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To: servantboy777

The public is just as stupid as they are easily manipulated by TV and the media. Some people here think it is a big joke that I point it out. They respond “oh Fox is our friend or I just watch TCM or ball games.” BS - you are still supporting the beast.

The big joke is when they see their standard of living drop dramatically and more and more freedoms are taken away. Old people will become too expensive for society. People will be robbed and beaten and the perps will claim social justice.

The Repubs suck especially RINOs like MCCain, Bushes, et al but the Dems are 10X more evil.


12 posted on 03/08/2011 8:29:17 AM PST by Frantzie (HD TV - Total Brain-washing now in High Def. 3-D Coming soon)
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To: LibsRJerks

Yea, I hear ya.

Did ya catch the Jesse Jackson Jr. speach on capitol hill in regards to the constitution?

What a freakin idiot! If his comments were not so rediculous, it would be scary.....wait a minute, it is scary.

lol


13 posted on 03/08/2011 8:29:53 AM PST by servantboy777
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To: Frantzie
Old people will become too expensive for society

I'll probably be OK until my ammo runs out.....

14 posted on 03/08/2011 8:30:16 AM PST by nascarnation
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To: servantboy777

I agree... But now somebody will have to pay the piper...


15 posted on 03/08/2011 8:30:44 AM PST by Michel12
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To: Da Coyote

When the collapse occurs all government pensioners WILL see their pensions reduced to subsistence levels, their luxury automobiles and vacation properties confiscated.


16 posted on 03/08/2011 8:32:39 AM PST by skeeter
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To: Michel12

Living standards are naturally transitory. The violation perpetrated by the Leftists involves, of all things, hope:

Your Hope has been redistributed. Here’s your Change.


17 posted on 03/08/2011 8:32:54 AM PST by Gene Eric (Your Hope has been redistributed. Here's your Change.)
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To: skeeter

You’re an optimist. No sarcasm intended.


18 posted on 03/08/2011 8:36:46 AM PST by listenhillary (Social Justice is the epitome of injustice.)
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To: henkster

The spending cuts you mention need to be done and done NOW. No more pussy footing around. It’s beyond me that our government believes that we can continue to spend more than it brings in and all the while, give our borrowed money back to the nations we borrowed if from and pay interest on it. It is said that we give our tax money to 150 countries around the world. We can no longer, nor should we, support the world when the majority of these countries hate us. Nor should we defend them with our military without them paying for that defense.


19 posted on 03/08/2011 8:40:05 AM PST by RC2
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To: Michel12

The citizens create their standard of living and it’s government that destroys it.


20 posted on 03/08/2011 8:43:59 AM PST by ReverendJames (Only A Painter Or A Liberal Can Change Black To White.)
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To: RC2
There will be no meaningful cuts because those who need to make the decisions don't think they'll be held accountable when the wheels come off.

They are likely correct.

21 posted on 03/08/2011 8:46:37 AM PST by skeeter
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To: Michel12

Why do I think it will be the people who pay the freight (ie., working taxpayers) who will suffer falling living standards, and not the parasite class (ie., the Democrat party “base”)?


22 posted on 03/08/2011 8:47:05 AM PST by Lancey Howard
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To: Michel12

bfl


23 posted on 03/08/2011 8:49:14 AM PST by fightinJAG (TAXPAYERS OF THE WORLD UNITE)
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To: Michel12

Congress is in denial. The Democrats think we don’t have a problem and the Republicans think our problem can be fixed with a few modest spending cuts.

There ain’t no animal to save the politicians this time around.


24 posted on 03/08/2011 8:49:44 AM PST by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: skeeter
There will be no meaningful cuts because those who need to make the decisions don't think they'll be held accountable when the wheels come off.

They will once again kick the can down the road until somebody with guts - somebody like Scott Walker - finally puts his foot on the can and says, "It stops here and now."

25 posted on 03/08/2011 8:50:20 AM PST by Lancey Howard
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To: Michel12

Congress is in denial. The Democrats think we don’t have a problem and the Republicans think our problem can be fixed with a few modest spending cuts.

There ain’t no animal to save the politicians this time around.


26 posted on 03/08/2011 8:51:05 AM PST by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: Michel12

Congress is in denial. The Democrats think we don’t have a problem and the Republicans think our problem can be fixed with a few modest spending cuts.

There ain’t no animal to save the politicians this time around.


27 posted on 03/08/2011 8:51:05 AM PST by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: Lancey Howard

They will kick the can down the road until there are so many other countries in the same boat that they can all get together and secretly agree on a Big Lie that will keep that can kicking on down the road for another generation.


28 posted on 03/08/2011 8:56:48 AM PST by Buckeye McFrog
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To: Lancey Howard
Why do I think it will be the people who pay the freight (ie., working taxpayers) who will suffer falling living standards, and not the parasite class (ie., the Democrat party “base”)?

The socialist politicians will eventually declare a WWII style emergency 'bond drive' and start collecting private savings and retirement accounts, etc as a downpayment on the nat'l debt, depending upon public pressure and appealing to patriotic sense of duty.

The parasites will never be asked to give.

29 posted on 03/08/2011 8:58:31 AM PST by skeeter
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To: Frantzie
>>The Repubs suck especially RINOs like MCCain, Bushes<<

Scripture tells us, “I know your works, that you are neither cold nor hot. I could wish you were cold or hot. So then, because you are lukewarm, and neither cold nor hot, I will vomit you out of My mouth.”

I submit to you, that moderate republicans (rino’s) are more dangerous than the liberal left.

At least with the liberal left, you know your enemy.

RINO’s can do so much more damage before folks realize they are not who they appear to be.

This is the same thing Jesus eluded to in scripture.

Just sayin

30 posted on 03/08/2011 9:00:32 AM PST by servantboy777
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To: servantboy777
The best and the brightest (democrat and republican) up in Washington have mismanaged the financial health of this nation for decades.

I think that's simplistic. If politicians don't give the voters what they demand, they're voted out and replaced by some that will. American voters have demanded welfare state goodies for years: social security, Medicare, Medicaid, Taj Mahal schools with armies of overpaid administrators and teachers, etc. They've elected politicians who delivered them.

I look at my own little town. We're building a lavish new high school thanks to a huge bond issue people voted for expecting "rich property owners" to pay for. We have a redevelopment agency, fed by a state tax dollar "grant" that's driving poor people out of their homes to benefit developers. Our new multi-million dollar library is beautiful. It was mostly financed with federal "grant" money.

There Ain't No Such Thing As A Free Lunch (TANSTAAFL). Several generations of Americans, both voters and their elected politicians, have deluded themselves into believing there can be. But the bill always has to be paid one way or another.

31 posted on 03/08/2011 9:05:55 AM PST by Bernard Marx
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To: skeeter
There will be no meaningful cuts because those who need to make the decisions don't think they'll be held accountable when the wheels come off.

They are likely correct.

The Soviet and Eastern European Communists tyrants figured the same thing.

They were correct.

32 posted on 03/08/2011 9:08:54 AM PST by Gritty (Half-measures won't work against Obama's tyranny - David Limbaugh)
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To: RC2

If the government issued debt the way a private company did, it would be OK. Debt issuance is a valid tool to fund capital projects with a life span exceeding the term of the note. As long as the debt has a sustainable dedicated revenue stream to pay it off, then a moderate “deficit” on an annual basis is a legitimate budget philosophy. For example, our town did a road expansion; the cost of the expansion was about 70% of our annual operating budget (excluding capital projects already funded). It’s not economical to pay for it out of current income, as the taxpayers cannot afford the hit, even if on a one-time basis. But spread out over 20 years when we get a road forever, bonding the road makes sense.

The federal government is issuing debt willy-nilly; it has no rational basis to what is being funded and is for all practical purposes, unlimited. I believe financial gurus have a term for that: “just plain nuts.”


33 posted on 03/08/2011 9:09:32 AM PST by henkster (Before we make any more "investments" we ought to be shown the prospectus.)
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To: Bernard Marx
To paraphrase Adams, a republic like our's cannot exist without an informed public.

The media has been purposely misleading the public in favor of their leftist ideology for more than a half century.

The result - a disfunctional electorate unable to discern when their pockets are being picked and their childrens' future stolen.

34 posted on 03/08/2011 9:11:20 AM PST by skeeter
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To: henkster

“We can’t rely on foreign capital to finance our annual deficit for the simple reason that it’s just not there.”

They aren’t financing that much of it anymore. Most of the deficit financing now is the Fed buying treasuries.


35 posted on 03/08/2011 9:15:29 AM PST by ModelBreaker
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To: skeeter
The socialist politicians will eventually declare a WWII style emergency 'bond drive' and start collecting private savings and retirement accounts, etc as a downpayment on the nat'l debt, depending upon public pressure and appealing to patriotic sense of duty.

That is essentially what happened to Weimar Germany and Austria after WWI leading up to the 1923 collapse. Citizens rushed to buy government 'war bonds' as a safe haven against other dwindling investments, only to have the war bonds collapse in value as the mark and kroner rapidly depreciated in value as the governments printed more and more money to cover their debts. The result being that all who invested in the war bonds lost those savings through collapse of purchasing power as well as becoming destitute in the process.

36 posted on 03/08/2011 9:15:35 AM PST by OB1kNOb (You just proved that advertising works by reading this message!)
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To: Bernard Marx
>>If politicians don't give the voters what they demand, they're voted out and replaced by some that will.<<

Well we've certainly seen examples of this in Ted Kennedy, Boxer, Schumer, Thurman, Fenstein, Reid, Pelosi, Waters, Waxman, SJ Lee, Sanders, Kucinich, H.Clinton.....the list goes on.

Simplistic? Maybe. But in so many cases, voters cannot vote them out of office due to the deep entrenchment of the incumbent.

37 posted on 03/08/2011 9:18:30 AM PST by servantboy777
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To: OB1kNOb

Thats as likely a scenario for the present as any.


38 posted on 03/08/2011 9:24:14 AM PST by skeeter
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To: Michel12

Where’s Hillary’s reset button?


39 posted on 03/08/2011 9:26:17 AM PST by crosshairs (Appeasement is surrender in slow motion.)
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To: nascarnation; All

“I’ll probably be OK until my ammo runs out..... “

Same here, I’ve got piles. And I’ll probably go cannibal.
But I’ll talk to my `meals’ first and make sure they aren’t conservatives.
In any event, if life is really toxic, and I’m shot (say) gnawing on Alec Baldwin’s shin bone, then I’ll come back as a zombie. So I’ve got that going on too.
Let’s turn those frowns upside down, whaddya say?


40 posted on 03/08/2011 9:27:37 AM PST by tumblindice (America's founding fathers: armed and dangerous)
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To: tumblindice
"In any event, if life is really toxic, and I’m shot (say) gnawing on Alec Baldwin’s shin bone, then I’ll come back as a zombie. So I’ve got that going on too."

Priceless! I've got a mental picture of Bill Murray with a pitchfork making that very statement.

Thanks for making my day.

41 posted on 03/08/2011 9:45:30 AM PST by liberty_lvr (Ram it down our throats and we're going to shove it up your @ss - Tea Party Sign)
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To: tumblindice
"In any event, if life is really toxic, and I’m shot (say) gnawing on Alec Baldwin’s shin bone, then I’ll come back as a zombie. So I’ve got that going on too."

Priceless! I've got a mental picture of Bill Murray with a pitchfork making that very statement.

Thanks for making my day.

42 posted on 03/08/2011 9:45:48 AM PST by liberty_lvr (Ram it down our throats and we're going to shove it up your @ss - Tea Party Sign)
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To: LibsRJerks

Let’s coin a new term for Micheal Moore. Deficit denier.


43 posted on 03/08/2011 10:26:35 AM PST by reaganbooster (The democrat party symbol should be the grim reaper instead of the donkey.)
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To: Michel12

Remember, outsourcing is good because it gets rid of jobs that we don’t really want or need. Remember, trade deficits aren’t bad, either.


44 posted on 03/08/2011 10:43:05 AM PST by Yet_Again
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To: servantboy777; skeeter
I agree the powers of incumbency and compliant liberal media are huge problems. But in a democratic republic it's the the people's responsibility to inform themselves and demand needed reforms at the ballot box.

Government schools run by self-interested unions have dumbed the electorate down. Yet there has never been a time in the history of mankind that so much information has been available to voters, literally at the touch of a button. But people are mentally lazy and politicians use that fact to their own advantage. Huge numbers of Americans don't even bother to vote. And thus we get the government we deserve.

45 posted on 03/08/2011 10:52:39 AM PST by Bernard Marx
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To: Bernard Marx
We get the government we deserve

Well I can't argue with that.

Its just that, given how the system has been rigged and human nature being what it is, I don't see how it can be any different.

46 posted on 03/08/2011 10:58:29 AM PST by skeeter
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To: henkster

I understand what you are saying but..........how many of those projects can be entered into at one time? One project with a pay out of 20 years is understandable. 5-10-20-30 projects is unsustainable without massive tax increases. They still have to be payed for, sooner or later. I’m not an economist but even I can see where we are going down a very slippery slope with our politicians.


47 posted on 03/08/2011 11:17:39 AM PST by RC2
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To: skeeter
given how the system has been rigged and human nature being what it is, I don't see how it can be any different.

If you read history you'll find that democratic republics have never fared well in the long run. Ben Franklin warned that the Founders had given us a republic "if we could keep it." He knew republics had been easily vulnerable to corruption, selfishness and citizen complacency because they depend on the concept of civic virtue. Look up the Boy Scout oath as an expression of civic virtue and compare its ideals with the current state of American culture. Most in our now-cynical country laugh at them. Sad.

48 posted on 03/08/2011 12:11:25 PM PST by Bernard Marx
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To: Bernard Marx
Not so coincidentally the Boy Scouts are no longer welcome in many public use buildings.

Oh well, 200 plus years was a pretty good run, I guess.

49 posted on 03/08/2011 12:13:50 PM PST by skeeter
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To: Michel12
If the country cannot come to grips and cut back on entitlement programs, U.S. debt will continue to grow and governments around the world will loose faith in the U.S. dollar.

You have to love these professional writers. I don't rag on people for poor usage here, but a professional writer should know the difference between 'loose' and 'lose.' That said, the content of the article is true, and has been for the last four years. It can't all be blamed on Obama, either. The first bailout under Bush sent us over the edge. Obama doubled down, but right now we've gone over the cliff and are just pushing the accelerator when the wheels are spinning in air.

50 posted on 03/08/2011 12:24:16 PM PST by Richard Kimball
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