Lords of Death Forums Lords of Death Forums LoD General Discussion What does our national debt imply for the future?

Im not that smart so I was wondering what a smart person has to say about this.
Article about how we are $53 trillion dollars in debt
To me it seems like America is not ok and we are in for a big collapse of the economy. Im thinking depression.

Well, the statement is simply not true. The US is always going to be solvent. Which means the government can always print/issue/release the money to cover the bills. The problem is how is this going to affect the economy. It would create huge inflation, instability and whatever else but it won't be the end of the world. Many countries have gone through that and recovered in five to ten years. Plus you get to keep everything you got that you didn't pay fair value for. If you want to prepare for those days- invest in real estate and non-perishable commodities on as much borrowed money as you can, keep paying the minimal payments and wait.

KOBE BRYANT AINT WEALTHY THE CRACKA WHO SIGNS HIS PAYCHECK IS
or whatever chris rock said

The US is on the downslide now unfortunately. I wish it was otherwise. If you look at the March suspension of releasing M3, then the following explosion of USD, the only outcome can be inflation. If you add in the slowdown on the economy, it spells stagflation.
2006 saw 300 billion USD worth of adjustable rate mortgages reset, the result is less than pretty. However in 2007 we'll see 1.3 trillion USD+ worth reset. Think shit is slowing down now? Wait till late summer / fall 2007. Then it will be BAD.
Did you know that if you remove the MEW (mortgage equity withdrawl) from the GDP for the last 3 years, the US has had negative growth? The economy for the last 3 years has operated on expanding debt by the consumer. What happens when the "home ATM" shuts down (as it has)? Economic contraction and lots of ruined lives.
The fed can't raise interest rates due to consumers having negative savings and bloated debt issues. The fed must raise interest rates to keep foreigners buying 1.3 billion dollars worth of treasuries each and every day. There is no way out of the mess.
China holds over 1 trillion USD in reserves (they don't have a debt....yet), and they are looking elsewhere now. Who will buy those USD's every day? We sold our souls for cheap shit from China. Try to find things labeled as "Made in the USA" in a store, compare them to "Made in China". We got sucker punched by the Chinese Embassy (also known as Walmart).
More and more oil is now traded in Euros, thus lessening the power of the USD as a reserve currency, making the switch out easier.
Currently the US nickel (5 cent piece) is the single most valuable piece of currency the US has. Each nickel contains 7.8 cents worth of copper, making it the ultimate hedge instrument! If inflation occurs, the metal content will rise. If deflation occurs, then the face value of the coin will rise!
If you are interested in the subject of how we are fucking the future, check out some good sites like www.dailyreckoning.com and buy their book "empire of debt". There are a few chapters you can peruse on the site I think. Also read "Squanderville" (linked there) written by Warren Buffet.
There is a lot more info out there on the subject. If interested, I can pass some links along.
Do NOT trust the official metrics (inflation, CPI etc....), they have all been massaged and bent to provide answers which look rosy (ie: CPI using "substitution" in the calcs etc...).
2006 real inflation is around 10 to 12 percent if you use the "pre clinton" calcs. Clinton perfected the art of making numbers lie, and the tradition has not stopped yet.

couldnt have said it better...
The US had its first "negative spending rate" statistic ever.
For every $1.00, the average US citizen was spending $1.06

This is a wrong statement....hit me up in PMs or lets meet in vent and i can walk you through the reasons....
i am just WAY too lazy to type this early in the morning.
It was a combination of many many factors, many of which are outside of the control of the United States.....

keep in mind that it takes on average 4 to 6 years for political decisions to effect an economy....
If anything, the tax-cuts Bush implemented propped up the US economy thus the solid stock market for the past 2-3 years. Valuations are astronomical.
Also, there is economic theory that believes a slash in taxes and the acceptance of fiscal debt will move or pull economies out of the toilet. It is dependent, however, what is done in the future to erase the debt that is pilled on....something Reagan nor Bush have addressed or figured out how to do. Reagan pulled the US out of a NASTY recession and inflationary economy...Bush did the same right when he took office....the democrats come in to power, and preach a different type of economics that is based on taxes and improving productivity...both are counterintuitive on what they are out to accomplish.
The US has the HIGHEST interest rates out of many other developed countries. That has spurred foreign investors (namely China) to invest in the US. For no other reason than that alone. The US just cant decide to one day go to war by issuing debt...if there is zero demand (if our rates were lower than South Africa for example) people would not buy our debt. The US has another reason to issue debt. The Pension situation in the United States (that a republican dominated house and senate passed by the way)....you think it is all blind, this act of government is going to torpedo more corporations than you think.
What did Clinton do during his tenure? Spent a little less than the projected amount...."we have budgeted -100 million, but we only spend -80 million, we deserve a pat on the back"....
Trust me, im not saying that the war chest money could have been spent on better things than a war, but to say that the looming downfall of the economy is Bush's fault is complete crap....you can however "blame" clinton for the 2001-2003 recession if you get right down to it.
The key problem is the US consumer and workforce...productivity hasnt moved and we spend money like drunken sailors.....there is zero saving.....our economy right now is positioned much like Japan in the 80s. A conservative Fed did the right thing by spiking rates and rising them so it gives them wiggle room when a recession and housing bubble is looming...

Unfortuently, the tax cuts took effect right away. The major issue was they were spent on consumer items (thus keeping the sector and market afloat) and not on savings or any other items for the future....the intended effect was to continue to float the economy and create new jobs through high consumer demand....did it work, yes it did....but with every good party, there comes a hangover...(we had the clinton hangover in 2001-2003 and the bush one is coming soon) what will the government do to control spending and deficits....


The 2006 pension act now forces all corporations (and non-profits) to carry pension liabilities and expenses on their balance sheets versus as a carried smoothed expense below the line.....this means that companies now have to face the reality of ENSURING their beneficiaries will be taken care of and making companies put money into the plans and make them fully funded...unions spin it as if the corporations are dumping pensions, there is what is called PBGC insurance so if a company goes bankrupt, it is now managed by the insurance company...explain to me how that hurts the worker...

i never said it wasnt something to pull that off, but what is so good about spending more than you earn even if you incur more debt....sounds like neither the republicans or democrats have it right....either economic plan you look at stinks to high heaven...

you damn right it is the americans fault. I bust my ass, have zero debt, and PAID my way through college by working 40 hours a week and only going to college 1/2 time due to the excessive bills. When there is a NEGATIVE savings rate (spend 1.06 for every 1.00 you make) you do not see that as an issue? There is NOTHING that any government can fix.
When corporations like GM are rolling cars off the assembly line at a LOSS cause $75 of the $100 cost are due to stupid union agreements that hinder corporate development and the chinese can undercut us due to their costs, you dont see that as an issue?

i got government funding for college cuz its too expensive to pay for everything on my own.
u must be bill gates to pay rent, bills, car payments, college, and life <img src="/~stretch/ubbthreads/images/graemlins/smile.gif" alt="" /> cuz i make about 28k a year and suck

Americans work more time. Our European office has more holidays and 20 days of vacation. I can't take a couple of days without feeling guilty. I heard France and other countries have like up to 30 days of vacation and it's illegal to not let employees use them. So we basically work harder and economy is getting worse. But it also makes sense. Not only because Americans would follow a cheap price off a cliff(Walmart) but the obscene amounts of money spent in the legal system or healthcare. Healthcare alone is like 20% of the GDP. Why are we investing so much in the healthcare system? Premiums are ridiculous. It doesn't make sense. We over-work ourselves, eat crap and pay through the nose to be that way. It's basically living a lower quality life than the Europeans and still thngs are getting worse. The average budget of a US hospital is 1 billion dollars. It's not any better than a French hospital but ten times more expensive. Give me a break. Lawyers charging $350/hour. Jesus. How can we have a good economy with so much dead weight?