Could America Go Broke?

[eagleseven]

WaPo: Could America Go Broke?

The idea that the government of a major advanced country would default on its debt -- that is, tell lenders that it won't repay them all they're owed -- was, until recently, a preposterous proposition. Argentina and Russia have stiffed their creditors, but surely the likes of the United States, Japan or Britain wouldn't. Well, it's still a very, very long shot, but it's no longer entirely unimaginable. Governments of rich countries are borrowing so much that it's conceivable that one day the twin assumptions underlying their burgeoning debt (that lenders will continue to lend and that governments will continue to pay) might collapse. What happens then?

The question is so unfamiliar that the past provides few clues to the future. Psychology is crucial. To take a parallel example: the dollar. The fear is that foreigners (and Americans, too) will lose confidence in its value and dump it for yen, euros, gold or oil. If too many investors do that, a self-fulfilling stampede could trigger sell-offs in U.S. stocks and bonds. People have predicted such a crisis for decades. It hasn't happened yet. The currency's decline has been orderly, because the dollar retains a bedrock confidence based on America's political stability, openness, wealth and low inflation. But something could shatter that confidence -- tomorrow or 10 years from tomorrow.

The same logic applies to exploding government debt. We have moved into uncharted territory and are prisoners of psychology. Consider Japan. In 2009, its budget deficit -- the gap between spending and taxes -- amounts to 10 percent or more of gross domestic product (GDP). The total government debt -- the borrowing to cover all its deficits -- is approaching 200 percent of GDP. That's twice the size of its economy. The mountainous debt reflects years of slow economic growth, many "stimulus" plans, an aging society and the impact of the global recession. By 2019, the debt-to-GDP ratio could hit 300 percent, says a report from JPMorgan Chase.

The Washington Post gets it...why won't Obama?

 

[Si modo]

washingtonpost.com

The idea that the government of a major advanced country would default on its debt -- that is, tell lenders that it won't repay them all they're owed -- was, until recently, a preposterous proposition. Argentina and Russia have stiffed their creditors, but surely the likes of the United States, Japan or Britain wouldn't. Well, it's still a very, very long shot, but it's no longer entirely unimaginable. Governments of rich countries are borrowing so much that it's conceivable that one day the twin assumptions underlying their burgeoning debt (that lenders will continue to lend and that governments will continue to pay) might collapse. What happens then?

The question is so unfamiliar that the past provides few clues to the future. Psychology is crucial. To take a parallel example: the dollar. The fear is that foreigners (and Americans, too) will lose confidence in its value and dump it for yen, euros, gold or oil. If too many investors do that, a self-fulfilling stampede could trigger sell-offs in U.S. stocks and bonds. People have predicted such a crisis for decades. It hasn't happened yet. The currency's decline has been orderly, because the dollar retains a bedrock confidence based on America's political stability, openness, wealth and low inflation. But something could shatter that confidence -- tomorrow or 10 years from tomorrow.

The same logic applies to exploding government debt. We have moved into uncharted territory and are prisoners of psychology. Consider Japan. In 2009, its budget deficit -- the gap between spending and taxes -- amounts to 10 percent or more of gross domestic product (GDP). The total government debt -- the borrowing to cover all its deficits -- is approaching 200 percent of GDP. That's twice the size of its economy. The mountainous debt reflects years of slow economic growth, many "stimulus" plans, an aging society and the impact of the global recession. By 2019, the debt-to-GDP ratio could hit 300 percent, says a report from JPMorgan Chase.

The Washington Post gets it...why won't Obama?

Obama's own staff members get it, too. Unsustainable.

Obama's negligence appears to know no bounds.

 

[JW Frogen]

It can and it will!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

The Chinese will never take our debts!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

[Mike458877]

Could America Go Broke?

Of course it could.

Mike

 

[froggy]

With three other countries financing us, i say were already broke.

 

[Navy1960]

By our definition, 106 countries have defaulted a total of 250 times since the
end of the NapoleonicWars. The most common defaulters—Costa Rica, Ecuador,
Mexico, Uruguay, and Venezuela—each experienced at least eight distinct spells
of default. Ecuador and Honduras hold the record for the longest periods in default;
beginning with their initial loans as members of the Central American Confederation
in the 1820s,
http://www.stanford.edu/~tomz/pubs/TW2007.pdf

It's pretty clear that if this nation does not get it's financial house in order and continues to spend borrowed money on an ever increasing number of social and economic engineering projects then we will of course go broke. Simply printing money does not mean you have money to spend and that idea seems to have been lost on those in Washington hell bent on spending regardless of the demise of this nation.

 

[Avatar4321]

What makes you think he doesn't get it?

If he doesn't he is just clueless. If he does, he's criminal.

 

[Mr. Peepers]

And what do we spend most of our money on? The military industrial complex. The completely UNNECESSARY debacle that is Iraq has been a gigantic money suck and still is, even though we're winding down that disaster (finally). Sure did make a lot of private multinationals rich, though, so mission accomplished. I think we should bring all of our soldiers home, shore up our borders and mind our own damn business for a friggin' change. Let the intelligence community take care of the chatter and rounding up the terrorists. That's their job. That's just my opinion.

 

[adeel_sami]

Anything is possible ..... !! Many of the countries are broke but hence they exist (with the collaboration of other countries) ..

 

[Claudette]

What do you mean could we go broke?? Jeeze where have you guys been. We are broke. We owe the Chinese 9 Billion dollars and our dollar is tanking. Our deficite will be 13 trillion and that idiot in the white house is punshing his idiotic agenda. The Reserve is just printing more money. Does Germany in the 30's ring any bells???

Catch a clue folks, we are broke.

 

[The T]

washingtonpost.com

The idea that the government of a major advanced country would default on its debt -- that is, tell lenders that it won't repay them all they're owed -- was, until recently, a preposterous proposition. Argentina and Russia have stiffed their creditors, but surely the likes of the United States, Japan or Britain wouldn't. Well, it's still a very, very long shot, but it's no longer entirely unimaginable. Governments of rich countries are borrowing so much that it's conceivable that one day the twin assumptions underlying their burgeoning debt (that lenders will continue to lend and that governments will continue to pay) might collapse. What happens then?

The question is so unfamiliar that the past provides few clues to the future. Psychology is crucial. To take a parallel example: the dollar. The fear is that foreigners (and Americans, too) will lose confidence in its value and dump it for yen, euros, gold or oil. If too many investors do that, a self-fulfilling stampede could trigger sell-offs in U.S. stocks and bonds. People have predicted such a crisis for decades. It hasn't happened yet. The currency's decline has been orderly, because the dollar retains a bedrock confidence based on America's political stability, openness, wealth and low inflation. But something could shatter that confidence -- tomorrow or 10 years from tomorrow.

The same logic applies to exploding government debt. We have moved into uncharted territory and are prisoners of psychology. Consider Japan. In 2009, its budget deficit -- the gap between spending and taxes -- amounts to 10 percent or more of gross domestic product (GDP). The total government debt -- the borrowing to cover all its deficits -- is approaching 200 percent of GDP. That's twice the size of its economy. The mountainous debt reflects years of slow economic growth, many "stimulus" plans, an aging society and the impact of the global recession. By 2019, the debt-to-GDP ratio could hit 300 percent, says a report from JPMorgan Chase.

The Washington Post gets it...why won't Obama?

Obama's own staff members get it, too. Unsustainable.

Obama's negligence appears to know no bounds.

What's key here? Is remembering wht Obama said..."returning the wealth of this country to those who earned it..."

 

[shane]

Both China and Japan have way to much invested in the dollar to up and leave it.
We still have more than 60% of the worlds economy, down only a mere 3% in the past 3 years...
at that rate in the next 10 years, the dollar will still be 50% of the worlds economy..pending we stay on this trend..
The dollar is to big to fail at this point, to many people have invested in it.

 

[Meister]

I know Obama gets it, he's not a stupid person. But, he does have a small window to get his agenda through, before it closes on him.
Having said that, there are a lot of posters on this board that are on the left, that just don't seem to get it, or they ignore it because of political partisan.

 

[Meister]

Both China and Japan have way to much invested in the dollar to up and leave it.
We still have more than 60% of the worlds economy, down only a mere 3% in the past 3 years...
at that rate in the next 10 years, the dollar will still be 50% of the worlds economy..pending we stay on this trend..
The dollar is to big to fail at this point, to many people have invested in it.

Once inflation begins, no one will be able to hold the dollar up to it's current value. This will happen when we stop injecting the economy with dollars that aren't there.

 

[The T]

I know Obama gets it, he's not a stupid person. But, he does have a small window to get his agenda through, before it closes on him.
Having said that, there are a lot of posters on this board that are on the left, that just don't seem to get it, or they ignore it because of political partisan.

Obama is quoted as having said that if it doesn't happen this year, it isn't going to happen...but then too he boasted it HAD to be done before the recess in August, and to wit it wasn't and the DEMS had their asses handed to them by the people over the Summer...

Same as with last night...New Jersey of all places? And I thought Virginia was theirs as of the 2008 election of Obama?

There are some serious wounds being licked right now by Democrats. (Albiet they 'll never admit it but will Blame, Deny, Minimize of Obfuscate what went down)...
And they will continue to second guess the people.

 

[Zoom-boing]

WaPo: Could America Go Broke?

The idea that the government of a major advanced country would default on its debt -- that is, tell lenders that it won't repay them all they're owed -- was, until recently, a preposterous proposition. Argentina and Russia have stiffed their creditors, but surely the likes of the United States, Japan or Britain wouldn't. Well, it's still a very, very long shot, but it's no longer entirely unimaginable. Governments of rich countries are borrowing so much that it's conceivable that one day the twin assumptions underlying their burgeoning debt (that lenders will continue to lend and that governments will continue to pay) might collapse. What happens then?

The question is so unfamiliar that the past provides few clues to the future. Psychology is crucial. To take a parallel example: the dollar. The fear is that foreigners (and Americans, too) will lose confidence in its value and dump it for yen, euros, gold or oil. If too many investors do that, a self-fulfilling stampede could trigger sell-offs in U.S. stocks and bonds. People have predicted such a crisis for decades. It hasn't happened yet. The currency's decline has been orderly, because the dollar retains a bedrock confidence based on America's political stability, openness, wealth and low inflation. But something could shatter that confidence -- tomorrow or 10 years from tomorrow.

The same logic applies to exploding government debt. We have moved into uncharted territory and are prisoners of psychology. Consider Japan. In 2009, its budget deficit -- the gap between spending and taxes -- amounts to 10 percent or more of gross domestic product (GDP). The total government debt -- the borrowing to cover all its deficits -- is approaching 200 percent of GDP. That's twice the size of its economy. The mountainous debt reflects years of slow economic growth, many "stimulus" plans, an aging society and the impact of the global recession. By 2019, the debt-to-GDP ratio could hit 300 percent, says a report from JPMorgan Chase.

The Washington Post gets it...why won't Obama?

He gets it but doesn't care; he will be long gone by 2019 and this will never personally affect him or his family. Cult of personality is winning.

 

[Zoom-boing]

I know Obama gets it, he's not a stupid person. But, he does have a small window to get his agenda through, before it closes on him.
Having said that, there are a lot of posters on this board that are on the left, that just don't seem to get it, or they ignore it because of political partisan.

Obama is quoted as having said that if it doesn't happen this year, it isn't going to happen...but then too he boasted it HAD to be done before the recess in August, and to wit it wasn't and the DEMS had their asses handed to them by the people over the Summer...

Same as with last night...New Jersey of all places? And I thought Virginia was theirs as of the 2008 election of Obama?

There are some serious wounds being licked right now by Democrats. (Albiet they 'll never admit it but will Blame, Deny, Minimize of Obfuscate what went down)...
And they will continue to second guess the people.

Just heard Puklosi spin that last night was a win for the Dems cause they took NY23 and Gibbs saying 'Obama wasn't watching the results he was watching the ball game'. Condescending elitist liars.

 

[The T]

WaPo: Could America Go Broke?

The idea that the government of a major advanced country would default on its debt -- that is, tell lenders that it won't repay them all they're owed -- was, until recently, a preposterous proposition. Argentina and Russia have stiffed their creditors, but surely the likes of the United States, Japan or Britain wouldn't. Well, it's still a very, very long shot, but it's no longer entirely unimaginable. Governments of rich countries are borrowing so much that it's conceivable that one day the twin assumptions underlying their burgeoning debt (that lenders will continue to lend and that governments will continue to pay) might collapse. What happens then?

The question is so unfamiliar that the past provides few clues to the future. Psychology is crucial. To take a parallel example: the dollar. The fear is that foreigners (and Americans, too) will lose confidence in its value and dump it for yen, euros, gold or oil. If too many investors do that, a self-fulfilling stampede could trigger sell-offs in U.S. stocks and bonds. People have predicted such a crisis for decades. It hasn't happened yet. The currency's decline has been orderly, because the dollar retains a bedrock confidence based on America's political stability, openness, wealth and low inflation. But something could shatter that confidence -- tomorrow or 10 years from tomorrow.

The same logic applies to exploding government debt. We have moved into uncharted territory and are prisoners of psychology. Consider Japan. In 2009, its budget deficit -- the gap between spending and taxes -- amounts to 10 percent or more of gross domestic product (GDP). The total government debt -- the borrowing to cover all its deficits -- is approaching 200 percent of GDP. That's twice the size of its economy. The mountainous debt reflects years of slow economic growth, many "stimulus" plans, an aging society and the impact of the global recession. By 2019, the debt-to-GDP ratio could hit 300 percent, says a report from JPMorgan Chase.

The Washington Post gets it...why won't Obama?

He gets it but doesn't care; he will be long gone by 2019 and this will never personally affect him or his family. Cult of personality is winning.

Good observation, but the 'Cult' has had a rude awakening...err...umm...I think it was just the alarm clock going off, and they're just going to hit the 'Snooze' button.

 

[Meister]

I know Obama gets it, he's not a stupid person. But, he does have a small window to get his agenda through, before it closes on him.
Having said that, there are a lot of posters on this board that are on the left, that just don't seem to get it, or they ignore it because of political partisan.

Obama is quoted as having said that if it doesn't happen this year, it isn't going to happen...but then too he boasted it HAD to be done before the recess in August, and to wit it wasn't and the DEMS had their asses handed to them by the people over the Summer...

Same as with last night...New Jersey of all places? And I thought Virginia was theirs as of the 2008 election of Obama?

There are some serious wounds being licked right now by Democrats. (Albiet they 'll never admit it but will Blame, Deny, Minimize of Obfuscate what went down)...
And they will continue to second guess the people.

Just heard Puklosi spin that last night was a win for the Dems cause they took NY23 and Gibbs saying 'Obama wasn't watching the results he was watching the ball game'. Condescending elitist liars.

I wonder which ball game he was watching, hmmmm.
No World Series Game..oh yeah must of been basketball. It's getting down to crunch time being 4-5 games into the season and all.

 

[The T]

I know Obama gets it, he's not a stupid person. But, he does have a small window to get his agenda through, before it closes on him.
Having said that, there are a lot of posters on this board that are on the left, that just don't seem to get it, or they ignore it because of political partisan.

Obama is quoted as having said that if it doesn't happen this year, it isn't going to happen...but then too he boasted it HAD to be done before the recess in August, and to wit it wasn't and the DEMS had their asses handed to them by the people over the Summer...

Same as with last night...New Jersey of all places? And I thought Virginia was theirs as of the 2008 election of Obama?

There are some serious wounds being licked right now by Democrats. (Albiet they 'll never admit it but will Blame, Deny, Minimize of Obfuscate what went down)...
And they will continue to second guess the people.

Just heard Puklosi spin that last night was a win for the Dems cause they took NY23 and Gibbs saying 'Obama wasn't watching the results he was watching the ball game'. Condescending elitist liars.

Actually? Obama was watching HBO and a Documentary of Himself that he's already seen.