Tough questions indeed. Austerity programs are needed. It’s a matter of survival for our children and grandchildren.
But some 40 million Americans get their incomes from the various levels of bloated government now. The only way to get the President elected was to drop hints that he would keep the big spending going. You saw the reaction in so many voters of both political parties to the idea of nominating Scott Walker.
No one’s going to give with spending cuts or higher taxes for wealthier constituents. Needed spending cuts would cause the markets to fall some (unemployment, even less consumer spending, etc.), while investors are nervous. On the other hand, great cuts in spending might save us from a near-future bond collapse. The corporate rate had to be adjusted radically downward to compete with other nations on exports.
So now what? Are defaults and repudiations still going to be the final answer in the very near future? How many of you see that world oil demand will continue to go higher and cause inventories to fall toward a panic?
Do you folks in the West know that regular gasoline is around $2.199 a gallon and lower in some places in the U.S.? Do you know why?
We’re living in an economy that is more managed than ever before. It’s on the verge and has been for a long time. That’s why it’s so weird. That’s why formerly extremely risky commodities and land have been so popular.
Oil production is running on debt and has been largely taken over by bankers (indirectly or directly, whatever). We’re running on debt.
One way or another, it’s probably likely that many very wealthy and influential people will lose some very large fortunes. That’s been known, with their influence suddenly absent (diplomacy to keep markets stable), to release the onset of some mighty scary international conflicts and other problems.
Nations’ leaders have been biting at the bight (the bit) to fight over natural resources. The more controlling, authoritarian communist/fascist governments tend to take extreme measures to keep their populations pleased with hints and movements toward conquest against other nations. So that’s another probability in the mix.
First off: I agree with your thoughts.
Apparently you do not have to pay back anything if you are the government.
You just print more money and away you go.
I would have thought the debt would have been so overwhelming we would crash but no....we print more digital money. We are not borrowing it we just make it. Foreign investors such as China and Japan only hold about 1/3 of our debt. The government and the people hold a whole dang bunch. Thats that printing money thing: just iou’s.
I do not believe you can cut enough spending to make a difference. Not saying we shouldn’t try but where do you do it: military? Domestic spending? Every year? The numbers seem miniscule compared to the massive debt we incur.
We want to strive for a merely balanced budget but you do not do that if you are paying 850b per year in interest.
In the end, you just print more money and everyone winks that its wealth.
Everyone does it. The Germans, the Chinese, the Japanese. So long as you piously make payments on the “debt” everyone goes along. When you miss them, SHTF as in Greece and Venezuela. Now Greece is “restructured” and properly penitent and they still go on.
So I do not know what the answers are. We still think that the govt. is run like our homes: you incur debt, you pay off the debt. You live within your means. But they have not done that for a century now. They pay lip service to the idea but they just make more money out of nothing.
When I hold that twenty in my hand, thats real money. But its not: Its just a piece of paper with some rag threads in it. Its only backed by my belief that its real and your belief that is real when I give it to you as payment. As long as we believe that fairy tale, we go on, none the wiser.