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"No Way Out" of Debt Trap, Gross Says: U.S. Living Standards Doomed to Fall
Yahoo/Finance ^ | 3/9/11 | Stacy Curtin

Posted on 03/09/2011 7:41:22 AM PST by EBH

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. Foreign goods would become more expensive, says Gross, while our standard of living would drop.

Under the second option, if entitlement programs are cut, many Americans would naturally have to learn to live on less and take a hit to their standard of living.

“There is really no way out of this trap and this conundrum at this point,” says Gross. From an investment perspective his advice is to stay clear of “bonds in dollar denominated terms” and to be “wary of higher interest rates going forward.”

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


TOPICS: Business/Economy; Government; Unclassified
KEYWORDS: bankrupt; bill; broke; debt; deficit; economy; gross; pimco
Main Stream starting to wake-up and send out signals?

The only thing I would add/change is the second option would force people to at first cut back and then if government figures out how to get out of the way....

Producers and productive people will innovate. That has always been the American way...to make money and make something of one's lot in life.

With option two all the programs removed and eliminated would put value back into the system. While it wouldn't lower your taxes, your tax dollars would be working to support the core needs of our nation and pay down our debt.

Necessity is the mother of invention.

1 posted on 03/09/2011 7:41:23 AM PST by EBH
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To: EBH
the world will "loose" [sic] faith in the U.S. dollar

I stopped reading right there...

2 posted on 03/09/2011 7:42:45 AM PST by Lou L (The Senate without a fillibuster is just a 100-member version of the House.)
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To: EBH
Main Stream starting to wake-up and send out signals?

No way - they want it to happen.

Being elitists they don't expect to share the pain.

3 posted on 03/09/2011 7:43:01 AM PST by skeeter
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To: Lou L

Thank you.


4 posted on 03/09/2011 7:45:27 AM PST by OKSooner (Obama confessed "his muslim faith" on the George Stephanopolous show on September 7th, 2008.)
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To: EBH
Unsustainable...
5 posted on 03/09/2011 7:51:25 AM PST by Diana in Wisconsin (I don't have 'Hobbies.' I'm developing a robust post-Apocalyptic skill set...)
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To: EBH
"There is really no way out of this trap and this conundrum at this point..."

My buddies have been saying the same but in a different way for about two years now.

They say, "There's no peaceful/bloodless way back from here."
(Some elements of our society will not accept a lower standard, they'll want yours)

Prepare now.

6 posted on 03/09/2011 8:02:36 AM PST by blam
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To: EBH
We know the country ran a 230 billion dollar deficit for the month of February alone. The Republican budget plan to eliminate around $60 billion of spending would account for about ONE WEEK of deficit spending. But even that is being called extreme by Dems and probably won't pass. If we can't come together in this country to eliminate ONE WEEK'S worth of deficit spending then there is no hope. It will be impossible to accomplish what needs to be done to avoid disaster. There's a hard rain gonna fall.
7 posted on 03/09/2011 8:03:50 AM PST by circlecity
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To: EBH

$225 billion debt in february alone.

$2.7 trillion debt just in one year

since the govt typically pulls in $2 trillion in tax revenue... this means we are spending at a rate of almost $5 trillion/yr

WTF

they are doing everything they can to push us deeper into the hole... to insure the country craters


8 posted on 03/09/2011 8:06:39 AM PST by sten (fighting tyranny never goes out of style)
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To: circlecity
Its clear that the GOP's House leadership isn't up to the task.

I sincerely hope there's a shakeup in the works for 2012.

9 posted on 03/09/2011 8:07:39 AM PST by skeeter
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To: Lou L; EBH
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.

The correct word is lose.

I'm curious to know who made this basic error. I'm hoping it was not the author.

10 posted on 03/09/2011 8:09:41 AM PST by Dr. Scarpetta
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To: EBH
and cut back on entitlement programs

I'm amazed that somebody actually has to post this "revelation." Thirty percent of "wages" in America are in the form of welfare payouts. And DC continues to fiddle.

11 posted on 03/09/2011 8:11:33 AM PST by LouAvul
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To: Dr. Scarpetta
This article was posted yesterday and I asked the same question.

BTW, it's still amazing to me that the government spends more money than any other entity in the history of the world but it's STILL NOT ENOUGH!

12 posted on 03/09/2011 8:12:25 AM PST by Richard Kimball
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To: Richard Kimball

You’re right.


13 posted on 03/09/2011 8:14:08 AM PST by Dr. Scarpetta
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To: Lou L

They are all sinking into debt even faster than we are (with the exception of the oil states and the ChiComs, who need customers). I think this will end with a backroom deal to support a Big Lie that allows the can to keep getting kicked on down the road.


14 posted on 03/09/2011 8:17:12 AM PST by Buckeye McFrog
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To: Lou L

Thanks for sharing :)


15 posted on 03/09/2011 8:18:06 AM PST by Unassuaged (I have shocking data relevant to the conversation!)
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To: EBH

Many of the top blue states support big federal gov tend to send out more money to Wash DC then receive from Wash DC. Don’t these local liberals understand that one way to obtain more income to cover the shortfalls is to have less sent to Wash DC and more kept within state. It means smaller federal gov. If CA, NY, IL, CT and etc were able to cut the amount of fed taxes sent to Wash DC and never returned to state by 3/4 wonder how that will impact their deficits. Threw that cash flow model at some of my complaining liberal friends, and for the first time (recessions do that to people) they seem to ponder on the concept.


16 posted on 03/09/2011 8:25:52 AM PST by Fee
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To: EBH

Many of the top blue states support big federal gov tend to send out more money to Wash DC then receive from Wash DC. Don’t these local liberals understand that one way to obtain more income to cover the shortfalls is to have less sent to Wash DC and more kept within state. It means smaller federal gov. If CA, NY, IL, CT and etc were able to cut the amount of fed taxes sent to Wash DC and never returned to state by 3/4 wonder how that will impact their deficits. Threw that cash flow model at some of my complaining liberal friends, and for the first time (recessions do that to people) they seem to ponder on the concept.


17 posted on 03/09/2011 8:27:39 AM PST by Fee
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To: EBH
"If the country cannot come to grips and cut back on entitlement programs"

How about cutting back on being the world's policeman before cutting back on American citizens. We spent the first half of the last century fighting in Europe, the 2nd half wars in the Pacific, started this century with wars in the ME, now lurking is Africa with nods to South America. Constant wars did in England. Time to put American citizens before the 'entitlements' wanted by the rest of the world.

18 posted on 03/09/2011 8:41:30 AM PST by ex-snook ("Above all things, truth beareth away the victory")
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To: EBH

While entitlements need to be addressed, how about starting out with some easy cuts?

Abolish Education. This bureaucracy has presided over a DECLINE in education. Dump it.

Energy. While not producing an erg, it has pissed away billions on “green energy” and similar socialist programs. Dump it.

EPA. Cut funding by 2/3. Pare it back to its original mission. Or eliminate it entirely and let the states do the mission.

Ethanol mandate & subsidy. Dump both.

There’s a plethora of overlapping goobermint programs where we’re pissing away $200 million per year. Eliminate the dupes.

There are thousands of “targets of opportunity” in fedgov. These are only a few suggestions. Shoot for sitting ducks like these first. Then tackle “entitlements”.


19 posted on 03/09/2011 8:43:14 AM PST by jimt
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To: EBH

The living standard is largely the result of inexpensive imports. China is only one of many many sources of much of the consumer goods purchased .

If the US$ does not remain relatively cheap the prices of imports will rise and the poor won’t have HD TV, computers, cell phones, new furniture, Chilean fruit, Mexican tomatoes and the list goes on and on and on.

To make the point again. American prosperity and living standard is the result of inexpensive imports.


20 posted on 03/09/2011 9:05:08 AM PST by bert (K.E. N.P. N.C. D.E. +12 ....( History is a process, not an event ))
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To: EBH
That was Bill Gross of Pimco/Allianz, BTW.

"Producers and productive people will innovate..."

...those currently prevented from producing by corporate-government (zoning ordinances, false environmental concerns, etc.).

"With option two all the programs removed and eliminated would put value back into the system. While it wouldn't lower your taxes, your tax dollars would be working to support the core needs of our nation and pay down our debt."

We'll start buying again after the default. It will be a time for new leadership in business, academia and politics.


21 posted on 03/09/2011 9:15:07 AM PST by familyop (cbt. engr. (cbt), NG, '89-' 96, Duncan Hunter or no-vote.)
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To: jimt
Great list...

Not to nit-pick, but you left off Arts and Humanities-type funding! Oh, and Planned [Genocide] Parenthood and NPR.

22 posted on 03/09/2011 9:20:16 AM PST by elk
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To: EBH

Option #2 is the wrong option and will make the economic shutdown much worse later on. As for option #2, it’s too late. The overspending and debt regime has gone too far. That would shut the economy down now. We’ll have to take our poverty pill either way. But then I’m only trying to paraphrase what Bill said.


23 posted on 03/09/2011 9:25:52 AM PST by familyop (cbt. engr. (cbt), NG, '89-' 96, Duncan Hunter or no-vote.)
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To: bruinbirdman

Ping.


24 posted on 03/09/2011 9:26:36 AM PST by familyop (cbt. engr. (cbt), NG, '89-' 96, Duncan Hunter or no-vote.)
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To: EBH
The destruction of the American Middle-class, the ONLY bastion of freedom in world, has been planned for decades.

Here are the Globalist Bankster meat-puppets that did everything they could to run American into the ground. Everyone of them piled on the debt, keep the borders wide open, shipped the jobs out, and saddled us with more rules and regulations.

Do you think voting for more Republicans and more Democrats will save us?

25 posted on 03/09/2011 10:30:06 AM PST by Roninf5-1 (If ignorance is bliss why are so many Americans on anti-depressants?)
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To: blam

I formerly started preparing Nov. 5th, 2008.

Really, I did. I had faith if, even McCain, won we might still have had some semblance of reversing things.

When I awoke on Nov. 5th to the 0bama win...I started moving things, storing things, and buying a few things...

People thought I had gone bonkers, not so much now.

Everyday things get a lot more outrageous.


26 posted on 03/09/2011 10:53:01 AM PST by EBH ( Whether you eat your bread or see it vanish into a looter's stomach, is an absolute.)
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To: EBH

The self-loathing Liberals WANT this country to fall. They hope to pick up the remaining pieces and rule like royalty over an impoverished country. Sound crazy? The world is full of countries like that.


27 posted on 03/09/2011 10:55:49 AM PST by TexasRepublic (Socialism is the gospel of envy and the religion of thieves)
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To: Dr. Scarpetta

Go to the link...

I just copy pasted the excerpt, not typed it.


28 posted on 03/09/2011 10:58:36 AM PST by EBH ( Whether you eat your bread or see it vanish into a looter's stomach, is an absolute.)
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To: EBH
I started early too.

Q.E. Money Printing Negative Feed Back Loop to Hyper-Inflation Oblivion

29 posted on 03/09/2011 11:12:55 AM PST by blam
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To: Roninf5-1

Best post on the whole debt issue. thanks


30 posted on 03/09/2011 11:31:49 AM PST by ex-snook ("Above all things, truth beareth away the victory")
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To: Roninf5-1
Do you think voting for more Republicans and more Democrats will save us?

Do you think voting for more Republicans and more Democrats will save us?

Rigging elections is child's play compared to rigging the financial markets.

31 posted on 03/09/2011 12:17:26 PM PST by Mr. Jeeves ( "The right to offend is far more important than any right not to be offended." - Rowan Atkinson)
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To: Lou L

PIMCO (biggest bond fund) Dumping All Treasuries, Bringing “Government Related” Holdings To Zero

http://www.freerepublic.com/focus/news/2686157/posts?page=6

uh?


32 posted on 03/09/2011 1:25:48 PM PST by EBH ( Whether you eat your bread or see it vanish into a looter's stomach, is an absolute.)
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To: familyop

I hear ya.


33 posted on 03/09/2011 1:35:22 PM PST by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: EBH
There's nothing but doom in a future.

There is no way our elected officials have the political will to make the necessary cuts...the political system has evolved over a period of a full century to ELIMINATE anyone who does not say "more".

And, there's absolutely NO WAY Americans are going to pay back the first trillion dollars, much less the innumerable trillions of debt that will pile up before nobody will loan us another dime.

The only solution is default, new regime and new currency. That's it.

It's the only option left.

34 posted on 03/09/2011 1:39:01 PM PST by Mariner (USS Tarawa, VQ3, USS Benjamin Stoddert, NAVCAMS WestPac, 7th Fleet, Navcommsta Puget Sound)
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To: blam
They say, "There's no peaceful/bloodless way back from here."

I put it a bit more succinctly. We ain't voting our way out of this sh**.

35 posted on 03/09/2011 1:40:02 PM PST by Lurker (The avalanche has begun. The pebbles no longer have a vote.)
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To: jimt

I agree with the cuts you mention but that would mean cutting thousands, if not millions of jobs. How can we deal with even greater unemployment?


36 posted on 03/09/2011 2:48:41 PM PST by jch10 (Cry havoc, and let slip the dogs of war...)
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To: jch10
I agree with the cuts you mention but that would mean cutting thousands, if not millions of jobs.

Are they productive jobs? Because if they are not, then they are nothing but glorified welfare - people pretending to work while being paid with money stolen from people that actually do work.

Think about this for a minute - take the typical EPA job. Here's somebody who gets paid to be an obstacle to other people being productive. In other words, employing people at the EPA and other overbearing regulatory agencies has served to eliminate other jobs in a quantity much larger than the quantity of jobs that they possess themselves.

37 posted on 03/09/2011 3:06:57 PM PST by meyer (We will not sit down and shut up.)
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To: EBH

I realize that. No reflection on you...


38 posted on 03/09/2011 4:00:33 PM PST by Dr. Scarpetta
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To: EBH

Oops. In #23, I meant to write that Option #1 is the wrong option—not #2. But it is also too late for #2, and Congress won’t do it.


39 posted on 03/09/2011 8:30:37 PM PST by familyop (cbt. engr. (cbt), NG, '89-' 96, Duncan Hunter or no-vote.)
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To: Fee

But that just fuels the “we need our Congressmen to push to get more spending HERE!” frenzy, from what I’ve seen.


40 posted on 03/09/2011 9:26:27 PM PST by Gondring (Paul Revere would have been flamed as a naysayer troll and told to go back to Boston.)
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To: ex-snook

How dare you expound such conservative ideas here! Actually focus on the US first? Be responsible in our spending?


41 posted on 03/09/2011 9:28:21 PM PST by Gondring (Paul Revere would have been flamed as a naysayer troll and told to go back to Boston.)
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To: Mariner
The only solution is default, new regime and new currency. That's it.

I've been saying that for a while now. The Weimar did something very similar to attempt to get out of their war debts. I realize Wiki isn't the best source for some things, but reading through their Inflation in the Weimar Republic gives a good idea of where we're actually headed and what the outcome will be.

Under Keynes he thought they didn't do enough to secure loans or raise taxes, interesting there again is no discussion of cutting spending. At one point in their journey the only thing they could do was print more money. Strikes by workers etc. Blaming bankers, Jews, competence of liberal institutions; it all sounds so very familiar.

42 posted on 03/10/2011 4:04:29 AM PST by EBH ( Whether you eat your bread or see it vanish into a looter's stomach, is an absolute.)
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To: EBH

PS. Foreign countries blockaded resources etc. to exact payment from the Weimar...what will China do?

If we do not start to produce and innovate there is more at risk than just civil war. IMHO


43 posted on 03/10/2011 4:07:01 AM PST by EBH ( Whether you eat your bread or see it vanish into a looter's stomach, is an absolute.)
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To: EBH

The standard of living for the average American has been dropping for some time already by my calculations.


44 posted on 03/10/2011 11:14:44 AM PST by RipSawyer (Trying to reason with a liberal is like teaching algebra to a tomcat.)
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To: meyer

I have long maintained that most government employees should not be counted as employed. The EPA is a prime example, there may be something they do that is positive but the vast majority of their actions are counterproductive, we would be better off if we disbanded the agency and paid the employees the same amount to stay home and play air guitar. We would be FAR better off if we fired them all and put those who could not find another job on an old fashioned poor farm where they could work the fields to grow corn and beans with hand tools and live in old fashioned barracks such as I enjoyed at boot camp back in ‘62. They would be so eager to get away they would find something productive to do.


45 posted on 03/10/2011 11:32:34 AM PST by RipSawyer (Trying to reason with a liberal is like teaching algebra to a tomcat.)
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To: EBH

Lotsa ignorant Democrats commenting at the link. The new mantra is eliminate defense spending.


46 posted on 03/10/2011 11:54:45 AM PST by headstamp 2
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To: headstamp 2

The world is one the very brink of full blown war in the Middle East...

and they want to cut military spending...


47 posted on 03/10/2011 12:00:01 PM PST by EBH ( Whether you eat your bread or see it vanish into a looter's stomach, is an absolute.)
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To: meyer
employing people at the EPA and other overbearing regulatory agencies has served to eliminate other jobs in a quantity much larger than the quantity of jobs that they possess themselves.

Absolutely true...and is also true of our over-bearing judiciary and ridiculous plethora of lawyers using it for their own personal benefit.

You simply cannot engage in large-scale projects in America any more - energy, natural resources or infrastructure. The bureaucracy and the legal system have become effective barriers, making the cost and time involved so great that nothing, absolutely nothing, can pencil out. We can't do anything of significant size or scope in this country any longer.

48 posted on 03/10/2011 12:24:17 PM PST by Scott from the Left Coast
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